Social ad spend is soaring. But are brands connecting?

Australian advertisers are pouring more money into social media than ever before, with new data from We Are Social and Meltwater confirming the enormous scale of the shift.

Social advertising expenditure is expected to hit a whopping $8.76 billion in 2026, up 16.5% year-on-year, almost exactly three times the 5.5% growth projected for Australia's wider digital advertising market.

The latest Digital 2027 Australia report, developed annually by both companies, shows social now accounts for more than 36% of all digital advertising expenditure.

The money, it seems, is following audience behaviour. Australians are spending almost 17 hours a week watching online video and using social media, compared with just over seven hours watching linear TV. More than half of adult internet users now turn to social platforms to research brands and products.

The numbers paint a fascinating picture of an advertising industry undergoing a significant redistribution of investment, with social platforms capturing an increasingly large share of budgets as consumer behaviour changes.

Australia now ranks third globally for social advertising expenditure per user identity, at approximately $387 annually, more than four times the global average of US$58.

Digital advertising accounts for an estimated 75.8% of total advertising expenditure in Australia, with social representing 36.3% of digital investment and influencer advertising another 5.6%.

The report doesn't establish how much money is being directly transferred from traditional media into social, but the difference in growth rates is striking. For publishers, broadcasters, agencies and marketers, the implications are difficult to ignore.

Australia now has 22.6 million social media user identities, up 7.6% year-on-year and equivalent to almost 83% of the population.

Facebook remains Australia's favourite social platform, with 26% of social users naming it their top choice, double the global average. It also drives more than three-quarters of social referral traffic.

But Instagram and TikTok are commanding extraordinary levels of attention.

Active Instagram users spend an average of one hour and 47 minutes on the app daily, opening it more than 18 times a day. TikTok users clock up one hour and 45 minutes, across an average of 13.5 daily sessions.

YouTube has Australia's largest reported potential social advertising reach, at 22.6 million users, followed by Facebook at 17.8 million and Instagram at 15.7 million.

The picture is one of considerable scale, frequency and increasingly sophisticated opportunities for advertisers to reach consumers throughout the day.

Suzie Shaw, APAC CEO at We Are Social, said the figures confirmed social's central role in the consumer journey.

“The numbers in this year's report make one thing undeniable: social is no longer a supporting channel, it is the primary channel of consumer attention and brand discovery in Australia.

"Brands increasing their social ad spend at three times the rate of the broader digital market are responding to a fundamental shift; Australians are spending more time on social feeds than watching linear television, and over half rely on these platforms to research products."

Big spend, but little attention

But these eye-watering numbers should come with an asterisk. Despite billions being spent on social advertising, only one in 10 Australian internet users feels represented in the advertising they see and hear online. Almost three in 10 use ad blockers.

In other words, marketers are spending considerably more to reach audiences who aren't necessarily feeling better understood.

Shaw said increasing budgets alone would not be enough, arguing that brands need culturally relevant creative developed specifically for the platforms on which it appears.

AI is changing brand discovery again

Just as marketers are coming to terms with social's dominance, artificial intelligence is opening another front in the competition for consumer attention.

The report found 72% of Australian internet users had used generative AI in the past month, while 46% had used AI tools to search for information, 16% to research brands or potential purchases, and 8% to discover new brands or products.

Additional figures show Australians are already using AI for personalised recommendations, while ChatGPT accounts for approximately 70% of AI-generated web traffic referrals in Australia. It's early days for AI-driven brand discovery, but the direction is significant.

Ross Candido, VP ANZ at Meltwater, said the most important development was not simply how much Australians were using AI, but how quickly it was beginning to influence the way consumers encountered brands.

“The real story in this year's data is where brand discovery is heading next, and how quickly it's getting there,” he said.

“Reputation is no longer just how a brand is perceived. It's the data AI uses to decide whether it gets recommended at all.”

Candido said brands needed to understand not only what consumers were saying about them across media and social platforms, but how AI tools were interpreting and presenting that information.

“That makes AI visibility a core part of reputation management,” he said.

The challenge for marketers is becoming more complicated. Social media has established itself as a powerful channel for discovery, influence and commerce, while AI is beginning to create new ways for consumers to search, compare and choose products.

Both developments are competing for attention and, ultimately, marketing investment.

More spending doesn't guarantee better ads

Perhaps the most revealing finding in the report is the contrast between the extraordinary scale of social advertising investment and the relatively poor connection many consumers feel with the advertising they encounter.

The industry has become remarkably effective at finding audiences, measuring engagement and directing spending towards platforms that command attention.

But attention and effectiveness aren't necessarily the same thing.

Social advertising's rapid growth is a powerful indication of where marketers believe their customers are spending time and making decisions. The rise of AI introduces another layer of complexity, potentially changing how brands are discovered before consumers ever reach a website or social feed.

Whether the industry can turn all that spending, data and technology into advertising that consumers actually want to engage with is another question altogether.