Meta is projected to generate USD 240 billion in advertising revenue in 2026, reflecting a 22.3% year-on-year increase and outpacing overall global social media advertising growth, according to a new report by WARC Media.
The findings are part of WARC Media’s ‘Platform Insights: Meta’ report, which examines the company’s advertising business, user engagement trends and campaign effectiveness across its platforms, including Facebook and Instagram. The report outlines how AI-driven automation and campaign optimisation tools are reshaping Meta’s monetisation strategy and advertiser proposition.
According to WARC Media forecasts, Meta’s advertising business grew 22% to USD 196 billion in 2025 and is expected to expand further to USD 240 billion in 2026. Growth is forecast to moderate to 12.1% in 2027. The report states that Meta has shifted its focus from increasing ad load to improving monetisation efficiency through AI-powered campaign automation and conversion optimisation.
Facebook is expected to contribute 60% of Meta’s advertising revenue in 2026, while Instagram is forecast to account for 40%. WARC noted that a unified AI infrastructure is supporting double-digit advertising growth across both platforms.
The report also highlights investor concerns linked to Meta’s increasing capital expenditure on AI initiatives. During its latest earnings call, the company announced annual AI-related capital expenditure of between USD 125 billion and USD 145 billion, funded primarily through advertising revenue. The scale of investment, alongside plateauing user growth and limited revenue diversification compared with companies such as Alphabet and Amazon, contributed to a reported 10% decline in Meta’s stock.
Alex Brownsell 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.”
The report found that more than 3.5 billion people globally use at least one Meta app daily. However, restrictions in Russia and Iran contributed to the company’s first decline in total daily active users during the first quarter of the year.
The report highlights continued advertiser confidence in Instagram. WARC’s ‘Voice of the Marketer’ survey found that 55% of global marketers plan to increase investment in Instagram this year, compared with 25% for Facebook. Instagram also ranked as the second most preferred media brand among marketers after YouTube.
Short-form video continues to drive platform engagement, with Reels accounting for 45% of all engagement on Instagram and 29% on Facebook. Time spent watching video content on Facebook increased 8% quarter-on-quarter globally.
The report also points to improvements in campaign performance driven by AI-enabled advertising tools. Meta’s Q4 2025 AI model rollout reportedly generated a 24% increase in incremental conversions through improved attribution. Analysis by Fospha found that cost-per-purchase improved by 4.5% year-on-year, while brands using Advantage+ campaigns recorded 41% higher blended return on ad spend and 17% lower customer acquisition costs compared with manual campaign management.
Partnership Ads also emerged as a significant performance driver, with 71% of consumers making purchases within days of seeing creator-led content across Meta platforms. Meanwhile, research by Kantar found that Instagram and Facebook generated higher-than-average contributions to brand awareness, association and purchase motivation relative to media spend allocation.
The report forms part of WARC Media’s wider ‘Platform Insights’ series examining investment trends, audience behaviour and advertising performance across major digital platforms.
