GLOBAL – Performance marketers are feeling the squeeze as nearly 75% report diminishing returns on their social media ad investments, according to a new report from Taboola in partnership with Qualtrics. As social media ad spend soars with projected spend expected to reach $239 billion in 2025 and $273 billion in 2026, marketers are realizing that more spending doesn’t always equate to better performance.
The report, titled The Pulse of Performance Advertising: Diminishing Returns, reveals that diminishing returns impact more than 30% of the ad spend for most affected marketers. The reasons? Audience saturation, rising costs, and ad fatigue are leaving many campaigns stagnant.
“While social media accounts for a large portion of performance advertising budgets, many marketers have hit a barrier in the form of diminishing returns,” said Adam Singolda, CEO of Taboola. “More spend just isn’t translating into better results. The findings in this report point to difficulty in sustaining performance over time, with marketers seeking solutions that can help them overcome that barrier.”
Additional key insights from The Pulse of Performance Advertising: Diminishing Returns include:
- Most of these performance marketers indicated that diminishing returns impact over 30%
of their spend. - Marketers focused on performance face diminishing returns on social media due to
audience saturation, rising costs, and ad fatigue. - Over 80% of performance marketers use multiple tactics to combat diminishing returns,
with more than half expanding into additional digital channels beyond social media ads.
The Pulse of Performance Advertising: Diminishing Returns is based on a survey of more than 300 advertisers, from brands and agencies in the US.
