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Social advertising study

About the Study

Does your company spend
money on social advertising?

The retail companies involved in the study come from a variety of retail sectors. A plurality represents the apparel industry, at 23%. Other sectors represented in the study include home furnishing (13%); hardware, electronics, and appliances (13%); Every respondent surveyed in the study represents a company that is currently spending money on social advertising.

retail (11%);
sporting goods (11%);
department stores (10%);
entertainment, food, and travel (8%);
supermarkets (6%);
and toys & hobbies (5%).

None of the respondents represent any sectors that weren’t listed and there are no respondents representing the telecommunications sector.

Key Findings

A significant portion of marketers’ budget is dedicated to social: 50% of marketing teams spend at least half of their marketing budget on social advertising.

Nearly every company surveyed buys Facebook ads (96%), and 36% of these companies spend more on Facebook advertising than on any other social media channel. Facebook produces the best ‘return on ad spend’ (ROAS) for more of these companies (41%) than any other social media channel.

Most companies plan to increase their advertising spend on Facebook (96%), LinkedIn (61%), and Twitter (56%)in 2020. Nearly one-quarter of these retailers (22%) will increase spending on Instagram as well.

61% of companies claim social advertising creation and delivery involve time-consuming manual processes. Almost half of the companies surveyed (48%) feel their social advertising and creative teams don’t collaborate effectively.

Most retailers will spend more on social advertising in 2020 compared to 2019 (52%) and most will ensure their social advertising and creative teams will work more closely in the coming year (51%).

U.S. retailers continue to allocate large portions of their marketing budgets to social advertising ads — Facebook, Inc. is a clear winner.

Retailers will increase their ad budgets on platforms that have a history of high performance. Manual processes and a lack of collaboration between advertising and creative teams are retailers’ biggest pain points.

Pain Points:

In Their Own Words

Researchers asked retail companies how time-consuming manual processes and a lack of collaboration between their social advertising and creative teams were causing them to struggle with social advertising.

Concerning manual processes, their qualitative responses indicated that forming a strategy, responding to customer inquiries, and choosing digital tools were all time-consuming. However, the most prominent pain point was the time-consuming process of creating and publishing content.

“Content planning is manual and does take up a lot of time.” Brand marketing professional, apparel

“Content creation is the most time- consuming part as it’s a long procedure from planning, web to post.” eCommerce and sales professional, home furnishing

“Although we have multiple tools to work on content, the most time-consuming process is strategy formation.” Creative and design professional, home furnishing

“Creating content the way the audience likes is one manual process that challenges social advertising and delivery.” Creative and design professional, hardware, electronics, and appliances

“Choosing creative content and finalizing the publishing of the content is a time- consuming process.” Brand marketing professional, home furnishing

Concerning collaboration, their qualitative responses indicated that time constraints, agreeing to specific goals and strategies, and, again, finalizing content were their biggest pain points:

“It’s challenging to co-develop strategies for the departments to work together.” Brand marketing professional, home furnishing

“Goal setting, as everyone has a different idea of a goal and how to achieve it.” eCommerce and sales professional, department store

“Having both the teams find sufficient time to discover and create interesting content.” eCommerce and sales professional, home furnishing

“It’s difficult to keep up with the ever- changing content demand of social media for both the teams.” Creative and design professional, department store

Sources:

Only 35% of respondents said their marketing team’s KPIs will change. This would suggest their goals for social advertising are remaining the same, but their processes are apt to change. Clearly, although retailers are interested in increasing their spending on social media ads, there remains some work to do internally. New automation and collaboration tools, as well as more effective processes for creating and delivering content, will be essential in the coming year if retailers intend to improve the effectiveness of their social advertising campaigns and increase their return.

1. “IAB internet advertising revenue report: 2018 full year results”. May 2019. Prepared by PwC.

2. Perrin, Andrew. “Share of U.S. adults using social media, including Facebook, is mostly unchanged since 2018.” April 10, 2019. Pew Research Center.

3. Hutchinson, Andrew. “Instagram Stories is Now Being Used by 500 Million People Daily.” Jan. 31, 2019. Social Media Today.

4. Graham, Megan. “Digital ad revenue in the US surpassed $100 billion for the first time in 2018.” May 7, 2019. CNBC.

5. smartly.io

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