INTEL BRIEF The 4 Most Critical Planning Insights for Social Media Advertisers and Their Agencies AdvertiserPerceptions.com
The 4 Most Critical Planning Insights for Social Media Advertisers and Their Agencies Learn Fast. Stay Connected. Make Smarter Advertising Decisions. Our Social Media Intel Brief is based on a proprietary study conducted in March 2016 (see methodology on page 11), and is designed to help you plan a more effective strategy based on the attitudes and behavior of the people who count most your fellow advertisers. The study covers the market outlook advertisers have regarding Social Media, how they buy it, how they execute it, as well as the criteria that motivates their spending. The New Need-To-Know Advertiser Intelligence Website www.advertiserintelligence.com With our new Center for Advertiser Intelligence, you can see for yourself how our unique data-driven insights will help you and your business thrive. If you're a marketer, you'll gain access to peer group information for making smarter advertising and media decisions. Media company and ad tech readers will gain intel for strengthening their brands and increasing their sales. Agency professionals will get data for improving client retention and generating new business. And investors will see very unique industry intelligence for making better investments for their clients. FREE ACCCESS IS ONLY AVAILABLE FOR A LIMITED TIME! You can get a FREE subscription to the entire Center For Advertiser Intelligence website for the remainder of 2017, but only if you act now. Simply click here to subscribe. AdvertiserPerceptions.com 2
1. Social Media Advertiser Optimism is at its Highest Level Ever Marketers and agencies indicate that of all the digital disciplines be it programmatic, search, video, or native social media advertising is the most likely to see an increase in spend over the next six months. Over two-thirds (68%) of advertisers expect it to increase, 31% believe it will stay the same, just 1% envision a decline. A Majority of Advertisers Are Planning To Increase Social Spending In The Next Year Expected Change in Spend on Paid Social Media Advertising in Next 12 Months Percent of Respondents INCREASE 68% STAYS THE SAME 31% DECREASE 1% 24% Total Advertising Budget Currently Allocated to Paid Social Media Advertising Q: What percent of your total advertising budget is currently allocated towards paid social media advertising? Q: In the next 12 months, how do you expect the amount of [your company s/your clients ] spend on paid social media advertising to change? AdvertiserPerceptions.com 3
The rise in social media spend is estimated to be around 18% over the next 12 months. This funding is most likely to come from an overall expansion of advertising budgets (cited by 54% of respondents) followed by diverting funds from print spend (38%), while 36% report it will come from a rise in the dedicated budget for paid social. Social Spending Increases Are Coming From Overall Budget Expansion, Incremental Dedicated Budgets, and Print Budgets Funding for Increased Spending on Social Media Advertising Percent of Respondents 54% Overall expansion of advertising budgets 36% Incremental budgets just for paid social 38% Print (magazines & newspapers) 22% TV (cable, broadcast, advanced) 16% Digital/mobile video 18% Expected Increase in Social Advertising Over Next 12 Months 30% Digital/mobile display 16% Search Q: By what percentage do you expect social advertising to increase over the next 12 months? Q: Where will funding for your increased spending on social media advertising come from? Base: Respondents Who Expect Spending on Paid Social Media Advertising to Increase in Next 12 Months AdvertiserPerceptions.com 4
2. Programmatic Buying of Social Advertising is Increasing How advertisers are buying these formats is expected to change dramatically over the next 12 months. Eighty-eight percent of buyers say social advertising is currently purchased directly, but this will drop to 67% in about a year s time. Conversely, the proportion buying programmatically will rise from 58% to 79% - a relative rise of over onethird of advertisers. In terms of what this could mean for overall share, emarketer predicts that the 39.7% growth in programmatic spend means it will account for 67% of total US digital display ad spend by year end. It reinforces how increasingly important it is that marketers understand the programmatic space and have the right ad tech partners in place to exploit the technology and minimize any potential downsides. Programmatic Buying of Social Advertising Is Growing Dramatically Method of Buying Social Media Advertising Percent of Respondents CURRENTLY BOUGHT EXPECT TO BE BOUGHT 12 MONTHS FROM NOW 58% 79% 88% 67% Programmatically Direct Q: How is social media advertising currently bought and expected to be bought 12 months from now? Base: Total Respondents AdvertiserPerceptions.com 5
3. Advertisers' Attitudes Toward the Benefits of Social Have Changed Significantly The main benefit of social media advertising is the ability to reach consumers in engaging environments (cited by 20%) followed by the ability to easily/effectively reach niche audiences (17%) and the opportunity to interact with consumers (15%). It s interesting to note that the latter benefit only ranks third. In the very early days of social, the majority of thinking was around how social provided the opportunity to have a two-way dialogue with consumers. Indeed, among brand-focused advertisers it still ranks as the #1 benefit (cited by 22%) compared to just 5% among performance-based advertisers. Reaching Targeted Customers Is The Primary Reason For Social Advertising Main Benefits of Paid Social Media Advertising Percent Ranking First Ability to reach consumers in engaging environments 20% Ability to easily/effectively reach niche audiences Opportunity for brand/product to interact with consumers Scalability to reach large audiences 17% 15% 14% Higher importance among brand-focused advertisers Ranked 1st by 22% vs. only 5% among performance-focused advertisers LESS IMPORTANT BENEFITS Behavioral targeting options Location-based targeting options 9% 5% Access to user data/insights 10% Unique creative or placement opportunities Geographic targeting options 5% 4% Q: What are the main benefits to using paid social media advertising? Base: Total Respondents AdvertiserPerceptions.com 6
Social media is much more likely to be seen as a vehicle for brand advertising than performance / direct response particularly among agencies. Agencies say 61% of social media budgets go to brand advertising (vs. 39% to performance) compared to 56% among marketers for brand ads. Advertisers Allocate More of Their Paid Social Advertising Toward Brand Advertising Compared to Performance Allocation of Paid Social Advertising Budget To Brand Versus Performance (Direct Response) Advertising Average Percent of Respondents PERFORMANCE 39% PERFORMANCE 44% BRAND 61% BRAND 56% Agency Marketer Q: What percent of your paid social advertising spend is currently allocated to brand and performance advertising? Base: Total Respondents AdvertiserPerceptions.com 7
Indeed, building brand awareness (cited by 28% of all respondents) is ranked as the number one goal for using social advertising, followed by generating online sales (18%) and increasing audience engagement (16%). Not surprisingly, among brand-focused advertisers, those ranking building brand awareness as the #1 goal rises to 35%, while those who rank generating online sales as the #1 goal of social advertising rises to 46% among performance-focused advertisers. However, it s important to remember this isn t an either/or proposition. The most successful advertisers at harnessing social media will use a mixture of brand and performance campaigns to suit their particular objectives. Advertisers Use a Combination of Brand and Performance Focused Campaigns Main Goals When Using Paid Social Media Advertising Percent of Respondents (Sorted by Rank 1) RANK 1 RANK 2 RANK 3 Build brand awareness 28% 17% 16% 61% Most Important Goal Among Brand-Focused Advertisers (Rank 1) Generate/increase sales online 18% 13% 13% 44% Build Brand Awareness (35%) Increase audience engagement Increase connection between audience and brand 16% 23% 19% 14% 18% 20% 58% 52% Most Important Goals Among Performance-Focused Advertisers (Rank 1) Generate/increase sales offline 14% 12% 12% 38% Generate/Increase Sales Online (46%) Drive users to website 10% 17% 20% 47% Driver Users to Website (30%) Q: What are your main goals when using paid social media advertising as part of a campaign? (Rank the following in order of importance to you.) Base: Total Respondents AdvertiserPerceptions.com 8
4. Advertisers Still Want Hard Data on ROI, Conversions and Branding Success Sales conversions, social post engagements and clicks to websites are the most important metrics used to evaluate the success of social advertising. Over one-fifth (22%) cited sales conversions on the company website and engagement on posts (such as comments, shares and likes) as the primary metric to evaluate success. Clicks to the company website followed closely behind at 21%. It s interesting to note that agencies are much more likely to cite the importance of sales conversions (27%) than are marketers (17%). As expected, however, the most important metrics differ considerably between brand-focused and performance-focused advertisers. Engagement on posts is ranked as the #1 metric among brand advertisers (63%), while sales conversions is ranked #1 among performance advertisers (73%). Brand-focused and Performance-focused Advertisers Differ Greatly On Measuring The Success Of Social How Success of Paid Social Media Advertising Is Evaluated Percent Ranking First Sales conversions on my company s/client s website 22% Higher importance among agencies 27% ranked 1st, vs. 17% among marketers Engagement on posts made by brand/product (comments, shares, likes) 22% Most Important Metrics Among Brand-Focused Advertisers (Rank 1) Most Important Metrics Among Performance-Focused Advertisers (Rank 1) Clicks to my company s/ client s Website 21% Engagement (63%) Clicks to Website (53%) Sales Conversions (73%) Clicks to Website (70%) Video Views 13% LESS IMPORTANT LESS IMPORTANT METRICS METRICS Overall likes/follows/pins etc. of brand or page App Engagement (Desktop/Mobile) Event Attendance Offer Claims for In-Store Purchases App Installs (Desktop/Mobile) 6% 5% 5% 3% 3% Q: When evaluating the success of paid social media advertising, what are the most important metrics that you review? Base: Total Respondents AdvertiserPerceptions.com 9
Despite the high optimism about paid social spend in the future, low ROI and the difficulty in gauging ad effectiveness are regarded as the biggest obstacles in using social advertising both cited by 22% of respondents as the #1 obstacle. Gauging ad effectiveness is the biggest obstacle among marketers, while low ROI is tops among agencies. Notably, twice as many consider risk to brand safety/image to be an issue, which was one of the main concerns leveled at social media in its early days. The ways social media success is evaluated and the concerns about determining ROI are a reminder that while hard metrics for evaluation are always important and, ultimately how marketers are measured on (rightly or wrongly), it s important that social media is seen as an important vehicle for other less measurable benefits such as overall brand perception and brand health. However, this doesn t let the platforms off the hook in terms of proving their worth to clients. Both parties need to work harder together to come up with ways that show how social is working and, thus, provide, proof to continue the investment in the channel. Low ROI and Measurement Are the Main Obstacles of Social Advertising Obstacles/Deterrents of Paid Social Media Advertising Percent Ranking First Low ROI 22% Top Ranked Obstacle by Agencies Difficult to gauge ad effectiveness Difficult to develop/determine appropriate metrics Risk to brand safety/image Issues with fraud and transparency 22% 17% 11% 10% Top Ranked Obstacle by Marketers Higher Concern Among Performance-Focused Advertisers 19% Ranked first vs. only 7% among brand-focused advertisers LESS IMPORTANT METRICS Issues with viewability 9% Too expensive 8% Q: What obstacles or deterrents are there to using paid social media advertising? Base: Total Respondents AdvertiserPerceptions.com 10
Methodology, Profile and Ad Categories Method All interviews conducted online Incentives include cash and information Fieldwork: March 15th to March 30th, 2016 Sample: Agency and Marketer contacts from The Advertiser Perceptions Media Decision Maker Database and third-party databases as needed. Qualification Involved in paid social media advertising (paid presence) decisions Spent at least $1 million in total advertising over last 12 months Has a role in the paid social media advertising decision-making process Directional Data: Some findings in the presentation may reflect data with low bases, as noted. Represents Leading U.S. Advertisers by Ad Category and Media Type Automotive Baby, Child or Parenthood Related Consumer Electronics Consumer Packaged Goods Education Entertainment Financial Products/Services Home & Appliance Liquor, Beer and Wine Men's or Women s Apparel/Fashion Men's or Women s Toiletries & Cosmetics Pharmaceuticals & Remedies Quick Service Restaurants Retail Technology Telecommunications Travel Respondent Profile 300 TOTAL RESPONDENTS Company Type Job Title Total Annual Advertising Spend Agency Marketer VP and Above Director/Supervisor Manager/Planner/Buyer $1 Million to less than $10 Million $10 Million or more OVERALL 50% 50% 44% 41% 15% 52% 48% AdvertiserPerceptions.com 11
The 4 Most Critical Planning Insights for Social Media Advertisers and Their Agencies Social Is Strong, But Advertisers, Agencies and Media Providers Must Align on Transparency and Measurement Clearly the market outlook for paid social advertising looks very strong and the insights contained herein should help you plan a more effective strategy and, ultimately reap a better ROI. However, it is in that last part that social media, and its advocates, face their biggest challenge in terms of maintaining increased investment in the channel. All parties will need to work together on establishing (buyers) and providing (sellers) greater measurement metrics and ways of reporting that show how beneficial social media is in delivering against marketing objectives. GET THE FULL REPORT The Advertiser Perceptions Social Media Advertising Report and an array of additional industry studies may be purchased by contacting us at 212-626- 6683 or info@advertiserperceptions.com. How Do Your Advertising Practices Stack Up? What Could You Do Better? Learn Fast... Stay Connected... Make Smarter Advertising Decisions. Yours Free... Get Early Access to our New Business Intelligence Center. AdvertiserIntelligence.com is the definitive resource for marketing executives, agency professionals, media sellers, and investors for understanding the complexities, challenges, opportunities, and constant change affecting today s (and tomorrow s) advertising marketplace. Benefits to Your Free Subscription: Get up-to-speed in minutes, not hours, regarding everything advertising. Make the most effective use of your time and learn the ESSENTIAL information you need to make smart Identify obstacles and find the data-driven insights that help you solve your most pressing advertising challenges. Please share this offer with your colleagues! CHECK IT OUT: www.advertiserintelligence.com AdvertiserPerceptions.com 12
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