Brands that shift marketing resources to social media advertising can obtain huge benefits, reveals new research from The CMO Club and SocialCode. Every single chief marketer surveyed plans to either continue or increase their paid social spending in 2017: 45% plan to increase spending and 55% plan to hold spending steady.
The companies surveyed 63 chief marketing executives, primarily B2C brands managing annual ad budgets greater than $25 million. The report, The CMO Solution Guide: Getting More out of Paid Social, What Really Works, also covers paid social lessons learned by brands such as Neiman Marcus, Camuto Group, Famous Footwear and LaQuinta Inns & Suites.
Brands are focusing less on vanity metrics, such as social media “likes,” to measuring real business objectives, such as brand perception, awareness and sales, which makes it easier for marketers to justify spending. “Everyone’s playbook has had to change over the last five years,” said Famous Footwear CMO Will Smith. “CMOs must adapt or they will be left behind.”
Shifting from the Old to the New
More marketers will transfer spending from TV and other conventional advertising strategies to paid social in the coming year, according to the research.
“A small and growing number of marketing leaders have already begun to move significant investment from traditional TV and radio over to paid social,” stated The CMO Club CEO and founder, Pete Krainik, in a press release.
Social media advertising offers better audience targeting capabilities than traditional media. As a result, platforms like Facebook are enjoying an advertising boom. Digital advertising revenue grew 19 percent in the first half of 2016, reaching a landmark $32.7 billion, mostly due to Google and Facebook, according to estimates from the Interactive Advertising Bureau.
Paid Social Recommendations
CMOs surveyed offer several recommendations for investing in paid social, mobile and video. Start with a social data strategy, incorporating customer databases. Be sure to tie each campaign to a learning agenda. Deploy paid social across the entire marketing funnel. Invest in video. Test and repeat.
“Nearly all marketers are seeing value in their paid social, yet many are missing the opportunity to connect with people across different media platforms and throughout the customer journey,” said SocialCode CMO Max Kalehoff.
Although 63% of CMOs surveyed use social ads for direct response and 40% to drive brand awareness, only 15% use paid social to further connect the dots to sales and loyalty. SocialCode expects marketers will pursue more complete paid social strategies in 2017.
Brands increased their paid social budgets on Facebook and Instagram by more than 50% from 2015 to 2016. To put this phenomenal growth into perspective, annual paid social budgets of U.S. brands range from single digit millions to tens of millions of dollars.
Other Experts Agree
Other experts and surveys have pointed out the growing use of social media advertising due to its superior targeting capabilities and relatively low costs. A survey by Orbit Media Studios found that more bloggers are now promoting their posts through paid social. Although only 14% of bloggers surveyed are paying for social advertising to attract visitors, the number more than tripled over the last two years.
Those who use paid services say the tactic yields the strongest results. Virtually all bloggers promote their original content through non-paid social media activities (such as Twitter and Facebook posts), but that common tactic produced the weakest results, according to the survey.
“Bloggers who use the least popular promotion tactics are the most likely to report strong results,” writes Andy Crestodina, head of Orbit Media Studios. “Perhaps they find less competition there. Or maybe it’s just that easier tactics are more popular, but rarely more effective.”
Bottom Line: Recognizing the benefits of social media advertising, more marketing leaders plan to increase spending on paid social this year, often moving money from traditional advertising forums. A key element of that trend is greater emphasis on measurement and metrics that support key business objectives.
William J. Comcowich founded and served as CEO of CyberAlert LLC, the predecessor of Glean.info. He is currently serving as Interim CEO and member of the Board of Directors. Glean.info provides customized media monitoring, measurement and analytics solutions across all types of traditional and social media.
