Although widely discussed, advertising budgets for paid social media ads are finally beginning to gain attention; a finding that is expected to come as good news to Facebook, Twitter, YouTube, LinkedIn, Google, Pinterest, and now Instagram.
According to media software firm, STRATA, survey results it released on August 20, 2013, some 58 percent of the United States agency executives who were surveyed in July 2013, said that they had allocated up to 5 percent of their advertising budgets to paid social media advertising. Another 34 percent of respondents indicated that they had allocated 6-10 percent.
Although the numbers might appear low, some experts believe that as Twitter and Facebook grow their respective ad platforms and as those platforms continue to gain attention, more ad money will likely be spent in both Twitter and Facebook, as well as other social media sites. And, according to MarketingPilgrim.com, the percentages are not really so low when you consider that 42 percent of those who responded to the survey indicated that they were putting some money—between 6-25 percent of their budget—to social media.
The survey also revealed that most—nine out of 10, in fact—U.S. agency executives who responded said they will likely use Facebook for social campaigns they would be conducting for their clients. Facebook was followed by YouTube (55 percent) and Twitter (53 percent), LinkedIn (35 percent) , Google (25 percent), and Pinterest (25 percent).
Marketers do have the option to chose between free social media or paid social media advertising; however, more than twice as many of those who responded—25 percent versus 11 percent—felt that paid social media provided them with a greater return on investment (ROI) than free social media did. Meanwhile, a total of 19 percent of the respondents said that social media offers them no ROI.
As for the types of ads that are being placed on Facebook, brand promotions represented the top type of ads used, according to 62 percent of those responding. These beat out company announcements by 20 points. Another one-third said that they used social media ads to announce services; just about the same number said they used social media ads to announce their products.
While paid social media advertising is not dominating advertising budgets, an uptick is certainly being seen. According to eMarketer estimates, social networking ad spending in the U.S. will reach some $4.18 billion in 2013 and $6.45 billion by 2015.
MarketingPilgrim.com; Social Ad Buys Remain Relatively Small but Growing Percentage of Marketing Spend; Frank Reed; October 4, 2013.
eMarketer.com; Brand Promotions Are Most Popular Facebook Ads; October 4, 2013.