Taboola, a global leader in performance advertising at scale, has released a new report titled The Pulse of Performance Advertising: Diminishing Returns, conducted in partnership with Qualtrics, the leading experience management platform. The findings shed light on growing concerns among marketers regarding the efficacy of social media ad spend, despite its booming investment forecasts.

The Growing Gap: Rising Spend, Shrinking ROI

Social media ad spending is expected to reach $239 billion by 2025 and $273 billion in 2026, yet nearly 75% of performance marketers say they are seeing diminishing returns.

Contributing factors include:

• Audience saturation

• Escalating costs

• Ad fatigue

These issues are making it increasingly difficult for brands to scale performance through social media alone.

“More spend just isn’t translating into better results,” said Adam Singolda, CEO of Taboola.

The Real Impact on Budgets

More than 30% of ad spend is affected by diminishing returns, according to most marketers surveyed. This inefficiency not only wastes budget but also puts pressure on performance marketers to identify new growth channels.

Strategic Shifts: Marketers Look Beyond Social

To counteract declining ROI, over 80% of performance marketers have diversified their strategies:

• Expanding to new digital channels beyond social media

• Testing new ad formats

• Refining audience targeting and segmentation

More than half of them have already adopted alternative advertising platforms, signaling a shift in where performance marketing dollars will go next.

Why It Matters

This report signals a pivotal moment in digital advertising strategy:

• Social media’s reach is no longer a guarantee of ROI

• Marketers are actively searching for sustainable performance channels

• Platforms like Taboola are positioning themselves as alternatives to offset stagnation

“Marketers have hit a barrier,” said Singolda. “They need partners who can help them overcome diminishing returns with fresh, scalable solutions.”

As digital ad costs rise and audience engagement wanes, performance marketers must adapt. Taboola’s report makes one thing clear — the future of performance advertising lies in channel diversification, smarter data use, and platform innovation.