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Social media advertising has seen astonishing growth over the last two years. In 2015, spending on social ads in the US it set to reach $10 billion, up from just under $5 billion in 2013. This was the opening headline from an excellent eMarketer webinar this week into what amounts to a major change in the advertising landscape from the way budgets are allocated, to how ads are targeted, to even (or especially) the type of creative content that is now needed to reach individuals in a more meaningful way.
So what is driving such enormous growth in social media advertising? One of the key reasons is that social offers much better targeting. Facebook in particular has greatly enhanced its targeting abilities over the last few years as it connects the dots between its commercial aspirations and the vast amount of highly individual data it has acquired from its users. Better targeting means the ad space is more valuable, which of course means higher ad prices. The proliferation of new and emerging platforms is also a contributing factor – for example such apps as Meerkat and Periscope. But growth is also driven by established and previously ad-free platforms such as Snapchat and Twitter who are now using ads to find ways of monetizing their product.
Another factor eMarketer touched on is the growth of video ads which tend to be more expensive as they command higher CPMs (cost per thousand impressions). Again, Facebook’s major strides into video (I wrote at the start of the year about its mission to make video “an essential part of the Facebook experience”) have also helped fuel growth in spend. This is also changing the way that marketers disseminate video: it’s no longer YouTube’s empire. Facebook has made itself very well placed for video with strong growth into mobile, its aforementioned targeting capabilities, and the organic sharing opportunity it provides. However, the lack of search is a major drawback – but not something to put advertisers off. As the webinar noted, and the spending boom shows, advertisers are seizing the many opportunities at hand.
Staying with Facebook, I’m sure (like me) you’ve often heard that Facebook is losing its appeal to millennials and has less teeth in the industry than it used to. All data cited here by eMarketer points strongly in the opposite direction. On spend, for instance, Facebook’s 2014 ad revenue sat at $6.8 billion, compared to Twitter at $1.3 billion and LinkedIn at around the half billion mark. Additionally, teens aren’t running away in droves – data from eMarketer suggests that 83% of US teens are Facebook users, and that will hold through 2019.
So what does this mean for businesses, especially in the B2B realm? Well, social ad growth looks very much like one boom sets to continue. In short, it’s time to take social ads very seriously. Social media advertising should not be treated as an add-on or “nice-to-have” but an essential and integral part of a forward thinking marketing and communications strategy. It’s also time to consider video as it will increasingly be something customers expect and is therefore important for conversion. Compelling video content, coupled with the ability to reach audiences in a highly targeted way, speaks of massive opportunity.
If you’d like to discuss your social media advertising strategy with us, as ever, please get in touch.
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