AI is boosting Meta’s ad revenue as more than half of global marketers plan to increase spend across Facebook and Instagram.
Meta projected to earn $240bn from advertising in 2026, outpacing the ad growth of social media globally, according to WARC’s Platform Insights report.
The social media giant’s advertising business grew 22% in 2025 to $196bn and is expected to grow a further 22.3% this year and 12.1% in 2027.
WARC forecasts Facebook to account for 60% and Instagram 40% of Meta’s ad revenue in 2026.
More than 3.5 billion people worldwide use at least one of Meta’s apps each day. However, restrictions in Russia and Iran caused the first ever decline in daily active users in Q1 this year.
The US is the largest market for adspend across Meta’s platforms with 42.2% on Facebook and 40.5% on Instagram. The UK follows with 4% on each and Australia with 1.7% on Facebook and 2.1% on Instagram, according to WARC Media and Omdia data.
More than half (55%) of global marketers plan to increase their investment in Instagram this year, compared to just 25% for Facebook.
The figures chime with Omdia’s recent report showing that social media is one of the fastest growing marketing channels, with ad revenue expected to reach $640bn – a 33% increase – by 2030.
AI boosted campaign efficiency
Meta’s annual ad revenue prior to 2023 was trailing behind the total global social media market, with adspend across its platforms in decline. The Zuckberg-owned firm has invested heavily in AI since then, launching automated campaign tools and other initiatives.
The investment has paid off; in the latest earnings call, Meta reported a 33% rise in revenue to $56.31bn – majority of which came from its advertising arm, which brought in $55.02bn.
The unified AI infrastructure is considered to be helping the tech company main double-digital growth, WARC’s report highlighted. The rollout of a series of AI features and models to its advertising arm in Q4 2025 drove a 24% increase in incremental conversions through improved attribution.
Brands using Meta’s Advantage+ saw a 41% “higher blended ROAS” and a 17% lower new customer acquisition costs.
Instagram is ranked as the second most preferred channel after YouTube among global marketers, with more than 40% believing the platform is one of the top four for delivering highest attention.
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.”
Brownsell’s concerns comes as Meta also reported a $125bn-$145bn increase in annual capital expenditure on AI, almost exclusively through its ad business on its latest earnings call.
The lack of diversification in revenue, particularly when compared to Alphabet’s Google and Amazon, saw Meta’s stock drop 10%.
