Social ad spending heavily skewed toward low-cost consumer products

Brands focusing on low-consideration products are increasingly directing their budgets towards social media platforms, according a recent eMarketer study. This strategic shift is particularly evident in industries that offer products with lower price points, targeting younger, digital-native audiences who spend a significant amount of time on social networks. In response, platforms like Facebook, Instagram, and TikTok have expanded their offerings, incorporating more direct-response shopping ads, game install promotions, and branded video formats to cater to advertisers’ needs.

Per the study, retail and consumer packaged goods (CPG) industries have emerged as dominant players in the social ad spending arena. These sectors, which are traditionally driven by high-volume, low-cost products, now account for nearly 50% of social advertising expenditures in the U.S. Retail, for instance, holds a commanding 29.9% share, fueled by the aggressive advertising strategies of fast-fashion companies like Shein and Temu. Similarly, the CPG industry, making up 18.9% of social ad spend, uses these platforms to compete with direct-to-consumer (D2C) brands and fend off rising competition from white-label products.

While media and entertainment companies have historically relied on higher-cost branding channels such as TV, recent events have shifted their focus toward social platforms. The ongoing writers’ and actors’ strikes, coupled with reduced budgets, have led these industries to lean on cost-effective social media ads, particularly for promoting game installs and generating brand awareness through video content. Despite the slump in overall ad spending for these sectors, social media remains a critical tool for engagement with younger audiences.