Artificial Intelligence (AI) in Social Media Market | 2031

Report Description

The global AI in social media market size was USD 2.6 Billion in 2022 and is likely to reach USD 19.3 Billion by 2031, expanding at a CAGR of 25% during 2023–2031. The market growth is attributed to the ­rising trend of using AI for effective advertising on social media platforms.

Increasing user base on social media platforms including Facebook, Instagram, YouTube, WhatsApp, and TikTok is leading to vast data generation and interactions. The ever-growing trend of short video consumption is also majorly driving engagement on social platforms. This, as a result, fuels the use of Artificial Intelligence (AI) for improved social media campaigns. The rising global monthly users on these platforms are owing to the high penetration of smartphones and internet connectivity. For instance,

• As per 2023’s second quarter report released by Meta on 26^th July 2023, the number of Meta family monthly active people (MAP) as of 30 June 2023 was around 3.88 billion. Whereas, the number of Facebook monthly active users (MAU) was 3.03 billion as of 30 June 2023.

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Numerous advertising & marketing agencies demand advanced social media features for creating innovative written and visual content for their online sites or applications. Thus, to meet their demand, there is a surging trend of AI integration among social media companies. Adopting AI helps them to provide users & online businesses with innovative content creation tools and ideas. Such benefits attract new users and online stores, which further helps in market expansion.

The market report finds that the COVID-19 pandemic fueled the AI in social media market. It created growth opportunities for the market players, owing to the high number of social media users and the rise of quality engagement during the pandemic lockdowns. This led the social media companies to create advanced features in the applications, which boosted the adoption of AI, to compete in the evolving market environment. Moreover, the increased screen time of users during the pandemic gave social media platforms an advantage in launching new features. For instance,

• On 5 August 2020, Instagram launched Instagram Reels, which lets user record & edit videos, using audio, VFX, and creative tools provided by the platform. This short video-creating feature boosted the number of Instagram downloads and active users during the pandemic.

AI in Social Media Market Dynamics

Major Drivers

Rising adoption of AI for social media advertising purposes is one of the key propelling factors in the market. AI supports social media marketing campaigns by promptly creating engaging & creative writing and visual content. Many marketing & advertising businesses are adopting AI for business growth strategy ideation and brand promotion.

Low implementation cost of AI software is expected to raise the demand for AI in social media, and in turn, boost the market. Moreover, a surging number of global social media users and their increasing demand for advanced in-app features & smartphone-friendly experiences are further fueling the market. For instance,

• As per a report published on 18 May 2023 by Forbes, the estimated number of global social media users in 2023 was around 4 billion. Further, this number is expected to rise to over 5.8 billion by 2027. Additionally, the report also states that these users are active users of multiple social media sites, with a monthly active status average of around 6 to 7 platforms.

Existing Restraints

Rising concerns regarding data security and privacy among social media users and the issues such as the threat of hacking personal data on social media are expected to affect the market. Such growing privacy concerns are likely to reduce the number of social media users. In addition, government rules implemented on the regulations of the use of Artificial intelligence are likely to impede the AI in social media market, as obtaining the license for ethical use of AI by government officials can take a long duration of time. Additionally, the lack of AI experts and in-depth knowledge about implementing AI efficiently in business operations for generating profits is expected to restrain the market.

Emerging Opportunities

Increasing efforts by the major players in AI space to have a high market penetration rate are expected to create novel expansion opportunities in the market. Strategies such as using real-time operating systems (RTOS) for instant and real-time responses to customer queries helps to respond to a large degree of queries. This increases the speed of business operations and further provides market growth opportunities.

High availability of customer demographic data including location, voice, and search terms can be used by social media sites to show them ads according to their online behaviors. Additionally, the ongoing rapid developments in machine learning programs used in social media are expected to create lucrative growth opportunities in the market during the forecast period.

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Scope of AI in Social Media Market Report

The report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics have also been included in the report.

AI in Social Media Market Segment Insights

Technology Segment Analysis

Based on technology, the AI in social media market is divided into natural language processing (NLP), machine learning & deep learning, computer vision, and others. The NLP segment is expected to expand at a major growth rate during the projection period, due to its high capability to understand and analyze human language & behavior on social media.

The ability of NLP to understand language & tone increases the demand for chatbots for effective customer conversations. Whereas, the ability of NLP to understand the customer's online behavior provides an analysis of their purchasing pattern, which helps brands to strategize their sales. Such beneficial factors of NLP are likely to fuel the segment in the coming years.

The machine learning & deep learning segment is anticipated to account for a significant market share during the forecast period, attributed to its increasing applications in social media platforms for sentiment analysis, content suggestions, and personalized advertisement. This helps social media sites to promote relevant ads to potential customers. This further results in high conversion rates, which drives the demand for machine learning & deep learning.

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Organization Size Segment Analysis

On the basis of enterprise size, the global market is bifurcated into small & medium size enterprises (SMEs) and large enterprises. The large enterprises segment is projected to register a considerable CAGR during the forecast period, as these companies have significant financial support to integrate AI into their businesses. In addition, such organizations have a large pool of user data, thus they can leverage this data for their profit with the assistance of AI. This directly boosts the demand for AI in large enterprises.

The SMEs segment accounts for a significant market share, owing to the increase in their numbers around the world. SMEs are likely to adopt AI in their social media applications and software to gain a high customer base and manage customer experience. Furthermore, to retain customers and increase brand awareness, SMEs are adopting AI to create interactive content, plan brand growth strategies, and manage the workforce. This is expected to boost the demand for AI among SMEs, which directly fuels the segment.

Application Segment Analysis

Based on application, the AI in social media market is segmented into risk management & fraud detection, customer service, advertising & marketing, and others. The risk management & fraud detection segment is expected to register a robust growth rate during the projection period, as AI helps to respond better during online crises such as copyright issues. AI is used in social media platform risk management for identifying potential threats and accidental & intentional activities that hamper the site. The rising adoption of AI for this purpose from a growing number of SMEs and large enterprises for data security and risk management is driving the segment of the market.

The advertising & marketing segment is expected to hold a significant share of the market, due to the rising trend of personalized advertisements and focus on effective customer experience. Social media sites implement robust strategies such as paid brand ads and brand collaborations, to put forward the brand’s products to the customer's notice. This increases the sales of the brands and thus further boosts the demand for AI in smart advertising & marketing.

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End-user Segment Analysis

On the basis of end-user, the global market is categorized into media & advertisement, retail & e-commerce, banking, financial services & insurance (BFSI), information technology (IT), education, and others. The media & advertisement segment is projected to register a considerable CAGR during the forecast period, owing to the increasing usage of AI for social media advertisement purposes.

Numerous marketing firms are adopting AI to create innovative product designs, templates, audio, videos, and texts. AI is supporting these brands to create customizable, engaging, and innovative advertising content. As a result, the demand for AI among media & advertisement companies is surging, which further propels the market.

The retail & e-commerce segment accounts for a significant market share, as AI assists e-commerce and retailers to handle customer inquiries on social media through virtual assistants and chatbots. The use of AI in for managing social media handles of retail and e-commerce businesses reduces the cost of customer service and improves customer satisfaction, which further increases the demand for AI-based business operations. The use of AI in e-commerce is likely to surge, owing to the increasing focus on improving cross-channel marketing. Many companies in retail e-commerce are integrating AI into their websites to have a competitive edge over competitors, which is surging the demand for AI in the retail & e-commerce segment.

Regional Analysis

In terms of region, the global AI in social media market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is expected to dominate the market during the forecast period, attributed to the high usage of social media by the people in the countries including the US and Canada. For instance,

• According to a report published on 21 March 2023, the number of social media platform users in the US is more than 300 million in 2023. This number of users is expected to increase and reach around 330 million in 2028.

The presence of major players in the region further drives the market, as many organizations aim to have AI-powered social media sites. Furthermore, the consistent innovations by these key players in order to improve their platforms using AI are further projected to drive the regional market.

The market in Asia Pacific is anticipated to expand at a rapid pace during the forecast period, due to increasing access to the internet and emerging AI trends. Various e-commerce players in the region are adopting AI in their websites and social media handles rapidly, which accelerates the growth of the market. Moreover, the rising demand for improved customer management and establishing a quality online presence among numerous organizations in India, China, and Japan is further anticipated to boost the market in the region.

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