Meta to earn $240bn from Advertising in 2026 outpacing global social media ad growth

Serving ads across its mass reach ‘family of apps’ remains the foundation of its monetisation strategy. Its fast-growing ad business funds an aggressive AI innovation programme – which, in turn, fuels the flywheel through further increases in ad revenue.

WARC Media’s latest Platform Insights report explores Meta’s hyper-efficient advertising business, evaluates usage across its apps, and assesses the performance of campaigns on Meta.

Alex Brownsell, Head of Content, WARC Media, and co-author of the report, said: “Meta’s flywheel is spinning faster than ever. The company’s AI-driven automation is transforming how brands connect with audiences, driving rapid growth in advertising spend with Facebook and Instagram. This is enabling further record-breaking levels of investment in AI innovation.

“Yet investors appear concerned that the flywheel is at risk of spinning out of control, in light of plateauing user growth and mounting pressure to better monetise existing audiences. In this report, we explore the latest evidence-based insights to better understand Meta’s ad model and consider what might come next.”

Investment: WARC forecasts Meta’s advertising business to grow 22.3% to $240bn in 2026

In 2025, Meta’s ad business grew 22% to $196bn. It is expected to grow a further 22.3% to reach $240bn this year, according to WARC Media forecasts, with a more modest growth of 12.1% anticipated for 2027.

Prior to 2023, Meta’s annual ad revenue growth had lagged the total global social media market, and its share of total social spend was in decline. Following sizeable AI investments post-pandemic, it is now focused on optimising monetisation efficiency rather than simply increasing overall ad load. By deploying unified AI and automated campaign tools, it aims to enhance advertiser conversions and increase ad revenue without degrading user experience.

Facebook is forecast to account for 60% of Meta’s ad revenue in 2026, compared with 40% for Instagram. A unified AI architecture is helping to maintain double-digital growth across both platforms.

In its latest earnings call, Meta announced a $125bn-$145bn increase in annual capital expenditure on AI, funded almost exclusively through its ad business. This relative lack of revenue diversification compared with Alphabet and Amazon is proving a concern for investors, resulting in a 10% drop in the company’s stock.

The US is Meta’s largest market for ad investment (42.2% share on Facebook and 40.5% on Instagram) followed by the UK (4.0% on each platform) and Australia (1.7% and 2.1% respectively), according to WARC Media and Omdia data. However, more than half (55%) of global marketers plan to boost investment in Instagram this year, versus only 25% for Facebook, according to WARC’s annual Voice of the Marketer survey.

Meta reports that over 3.5 billion people worldwide use at least one of its apps every day, although restrictions in Russia and Iran caused its first ever decline in total daily active users in Q1 this year.

Facebook’s scale means the age profile of its audience tallies with the total internet population, while Instagram skews younger. Millennials and GenX make up more than 70% of wealthy global Facebook and Instagram users, per analysis by Ipsos.

Latin America, followed by Sub-Saharan Africa, leads in high-net-worth individual (HNWI) engagement on Facebook and Instagram—yet generates far less revenue per user than North America and Europe. Meta is now unlocking this monetisation opportunity through strategic expansions, including rolling out Threads ads in Brazil, seen as a key market.

Short-form video is becoming the content default across Meta. Its vertical video format Reels accounts for 45% of all engagement on Instagram, and 29% on Facebook – with time spent watching video content on Facebook globally up 8% quarter-on-quarter.

Meta heavily invests in LLMs to develop a “deeper intuition about user interests” to help with ad targeting.

Meta’s advanced AI capabilities are transforming campaign performance across its platforms. The company’s Q4 2025 model rollout drove a 24% increase in incremental conversions through improved attribution, while analysis by Fospha found that its cost-per-purchase (CPP) has improved by 4.5% year-on-year. Brands using Advantage+ have seen a 41% higher blended ROAS and 17% lower new customer acquisition cost versus those running manual campaigns.

Partnership Ads are emerging as a game-changer, with 71% of consumers making purchases within days of seeing creator content across Meta’s apps.

Kantar analysis found that an average campaign allocates 4% of budget to Instagram and 5% to Facebook – but that both platforms deliver relatively higher shares of brand awareness, association

and motivation to buy.

Instagram ranks as global marketers’ second most preferred media brand after YouTube, and more than 40% of marketers globally believe that Instagram is among the top four platforms that deliver the highest attention. Both Instagram and Facebook feature advertising that consumers perceive to be “fun” and “entertaining”.

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