75% of performance marketers experience diminishing returns on social media ad spend

Project Agora, a leader in delivering performance at scale for advertisers, shared a new survey conducted via Qualtrics, a leading company in experience management working with nearly 20,000 organisations worldwide.

Performance advertising on social media is rapidly growing – industry forecasts predict that social media ad spend will reach $239b in 2025 and is projected to reach $273b in 2026. However, new research found that despite social media’s dominance in performance advertising, nearly 75 per cent of performance marketers have noticed diminishing returns from their social media ad investments.

Additional key insights from the study The Pulse of Performance Advertising: Diminishing Returns include:

• Most of these performance marketers indicated that diminishing returns impact over 30 per cent of their spend.
• Marketers focused on performance face diminishing returns on social media due to audience saturation, rising costs, and ad fatigue.
• Over 80 per cent of performance marketers use multiple tactics to combat diminishing returns, with more than half expanding into additional digital channels beyond social media ads.

“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 Nikos Komninos, Managing Director of Project Agora. “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.”

Elie Chammas, Regional Director MENA of Project Agora added: “We’re seeing a clear inflection point where marketers are realising that social alone is no longer enough. Diversification across open web environments is becoming a key strategy for sustained growth and scale. Our mission at Project Agora is to empower brands to unlock high-performance opportunities beyond the walled gardens.”

*[The Pulse of Performance Advertising: Diminishing Returns is based on a survey of more than 300 advertisers, from brands and agencies in the US.]