The State of Social Media Advertising: April 2015

by Sandra Rand 5 years ago

Social media advertising spending reached over $15 billion in 2014 and is expected to grow by 29% in 2015. Nearly three-quarters of social media advertising spending went toward Facebook advertising, with Twitter accounting for 8% of social advertising spending.

Social media is more targeted, automated, and optimized than ever, but it doesn’t exist in a vacuum. Consumers use a mixed collection of devices, content, and platforms, so advertisers have to plan and deliver campaigns that work in multiple formats. Your messaging should be customized to each channel and target audience, and (as always) advertising on these channels should amplify and connect with your overall marketing strategy.

Facebook Is the Overwhelming Favorite for Ad Spending

Facebook is the undisputed champion of social media advertising, accounting for over $11 billion of social media advertising spending in 2014. With more than 1.4 billion monthly active users, Facebook alone accounts for 68% of social media activity worldwide. People turn to Facebook for to advertise their businesses and brands because it works (example: one of our large ecommerce customers saw a staggering 274% return on ad spend during the competitive holiday advertising season). The targeting capabilities, the cross-device reach, and the continuous innovation on the ad platform make Facebook a tough one to beat in terms of value.

Advanced Targeting Lets You Maximize Reach of Marketing Dollars

Since social media makes use of users’ shared profile information and click behavior, advertising on social sites helps companies find new potential customers – both new cohorts of populations you hadn’t yet identified but also prospects who are similar to your existing customers. While you aren’t able to target people searching on a specific term, and thus intent is generally low compared to search engines, you are able to target relevant users before they search for specific products just by knowing what they like, the kind of consumer they are (based on data like Facebook’s partner categories) and the kind of content they take action on.

Moreover, social networks gather massive quantities of user information, allowing brands to target audiences with great precision. The result is a level of personalization you can’t get on other advertising channels and smarter spending of each marketing dollar.

Performance Tracking Is Becoming More Sophisticated All the Time

Not only does this kind of advertising allow laser-focus audience targeting, it also tracks performance closely and immediately, so you’re able to turn a real-time feedback loop into data that helps you determine how you should allocate your budget.

Most networks offer website conversion tracking so you can learn how people are not only interacting with your ad but how those people ultimately convert, which helps you determine which platforms are delivering the best ROI.

Social and Mobile Advertising Are Coalescing

Mobile device activity counts for 60% of digital media time in the US, so ads on social media need to reach mobile users, and they do. In fact, social media advertising is considered the “gold standard” in native mobile advertising. Mobile users check Facebook, Twitter, and other sites multiple times per day, so reaching these users while they’re inside those apps can be highly effective. Mobile advertising made up over two-thirds of Facebook’s revenue in 2014, and 84% of Twitter’s. With smartphones starting reaching saturation levels by 2018, mobile social media advertising is expected to be an enormous growth market.

Sophisticated as they have become, social networks remain a goldmine of untapped consumer insights. Brands are naturally flocking to advertising through these channels because they know they can maximize their ROAS. Success requires not only creative ad content, but also outstanding data collection and analysis to learn what works and what doesn’t as efficiently as possible.