Of all the advertising mediums to have changed over the years, social media advertising may have come the furthest in terms of where it stands today. It would be egregious to say that advertising across all medias is not changing every day, but from a timeline standpoint, social media continues to break down statistical barriers that otherwise would still be standing today.
In 2014, social media advertising budgets were approximately valued at $16 billion worldwide. By 2016, the same social media budgets had nearly doubled, to approximately $31 worldwide. Folks, we are not talking about pennies on the dollar compared to the present. This massive influx of allocated marketing spend is a direct result of, well, results.
According to PowerTraffick.com, small businesses earn an average of $3 in revenue for every $1.60 they spend on Google AdWords. If I offered a hedge fund owner a guaranteed nearly 100% profit on investment, they would assume it was some type of scam. Now, this is not to say each company should immediately ditch their current advertising plans, and immediately allocate their assets all towards social media ad spend, unless, you are a brand with a product that doesn’t rely on brand loyalty. In my opinion and three decades of experience a well-balanced media strategy is still the most effective.
However, Global Web Index reported that a massive 40% of digital consumers use social networks to research new brands or products. With that being said, specific brands will find that investing within social media advertising would absolutely increase their return on investment, thus resulting in an increase in revenue.
This brings me to my next point: reviews, reviews, reviews. The concept of executing a Google search to find the optimal product is one of the simplest, yet most effective tools that consumers have at their disposal. From 2018-2019, mobile searches for the word “best” have grown 80% in the past two years. Companies such as Yelp.com, Google reviews, and Cnet.com have gained an exorbitant amount of traction due to their usefulness.
While reviews of products and brands are extremely important to the increase for traffic, perhaps the most influential reason for increased traffic among social media platforms is the decrease in TV viewership. Teens and millennials watch 40% less traditional TV than they did five years ago, according to MarketingCharts. While a Millennial’s parents would be proud of this trend, it doesn’t mean they are consuming less video. It is vital that these marketing dollars are not wasted, but instead captured elsewhere. If you combine the decrease in traditional TV viewership, with the prediction that worldwide digital ad spending is expected to reach over $375 billion by 2021 (eMarketer), then you can follow along the trend.
Not only is managing the advertising spend important when it comes to social media, but so is maintaining and engaging with consumers. Only 8% of customers agree that business with online presence’s deliver great customer service via their social media channels. Simply put, it is not enough to just throw money towards social media advertising and call it a day. Instead, the combination of multiple platform ad spends, engagement, and effort together will make the best social media concerted plan.
Regional companies can combat their national competitors using social. While their spending may not equal that of the “Big Guys”, it’s the expertise of their execution and the personal “feel” to the consumers that could make all the difference. They or their agency must be smarter, more sincere and nimble to make their budget carry the day.
In the end, companies will divvy up their advertising spend however they see fit, but to them I would say “not only is social media advertising on the horizon to remain successful, but its already necessary.”