I think we’re finally at the point where brands have realized that, in order to make social media work for them, they can’t hope to consistently – or rather only – reach their customers organically. Yes? No? I think we’re there.
Advertising on social media is siphoning money away from other media budgets because of its targeting and price tag. These channels let you use the information users themselves provide in order to reach high lifetime value customers before they ever begin their search for your product or service. And it does so increasingly well, as targeting options become more accurate, ad placements become more relevant, and conversion tracking becomes increasingly reliable and valuable.
It’s no wonder spending for social media advertising is soaring.
What the Numbers Say
Social media advertising was expected to reach $8.5 billion in 2014. It actually reached $15.3 billion. That’s a 41% year-over-year increase that accounted for 11% of total digital ad spending worldwide.
The United States has the highest per-network ad spending at $31.37 per capita, and this figure is expected to grow by 27% this year, to reach $39.84 per capita. The increase in social media ad spending is driven by the still-growing reach, particularly to users on mobile devices. Better analytics, targeting, and performance are other drivers of social media ad spending, more so on Facebook than on any other social channel.
Facebook Dominates Social Media Advertising
Facebook accounted for three-quarters of social media ad spending in 2014, followed by Twitter, which accounted for only 8%.
Facebook is dominant for several reasons: One is that it continues to keep innovating its ad products, providing you with a variety of ad units and ways to target based on what your objective is. But the big winner here for Facebook is obviously the size of its userbase and potential reach for advertisers. On mobile alone, Facebook has over half a billion monthly active users; nearly one-third of Facebook users access the site solely through mobile devices. Over 60% of Facebook sharing takes place over mobile devices, meaning your strategy here has to address both Facebook and mobility to really see any success.
Mobile Ads Are Now Indispensable
By the end of 2015, spending on mobile social media advertising is expected to surpass spending on non-mobile social media advertising (!!). By 2018, two-thirds of social media advertising will be mobile, though I suspect it won’t take that long to reach that figure. Already, 60% of digital media time in the US is spent on mobile devices, and social media advertising is the best native option for many brands, since mobile users check their social accounts multiple times per day. Mobile advertising made up more than two-thirds of Facebook’s revenue in 2014, and is expected to increase to comparable levels for other social platforms (Twitter’s already there, but I bet Pinterest will see similar numbers) as well by 2018.
Costs Are Increasing and Options Are Expanding
Costs for social media advertising are going up, but that accompanies improvements in performance and targeting, so this isn’t something that’s alarming nor is it concerning. Ad loads are remaining steady on platforms like Facebook, which means they aren’t increasing the number of ads int he news feed the average user will see, which is what puts a premium on those placements.
Paid ad units available on Instagram are providing new options for social media advertising too. Two brands that have done especially well on Instagram have been Ben and Jerry’s and Levi’s.
As for visually-oriented Pinterest, Promoted Pins, which have been around since 2013, are considered minimally disruptive (a good sign) by users for now, since the site has long been friendly to brands and images. We’re psyched to ramp up on this channel in particular and can’t wait to do amazing things here for our clients. We’re working on some Pinterest integrations behind the scenes; we’ll share more when we can.
Growth in this space as a whole continues at a remarkable pace. Seems we’ve been on to something 😉
It allows precise targeting and accurate measuring of success, so you can learn what works and what doesn’t and adjust accordingly more quickly than with other types of advertising.
Check out some of our case studies and see for yourself how we might be able to put social media advertising to work for your company.