Indus­try gurus have been preach­ing a mixed (paid, owned, earned) approach for a num­ber of years now. But social’s “lack” of ROI has made it dif­fi­cult for mar­keters to make the case for paid social adver­tis­ing.  

A recent study by Adobe Dig­i­tal Index shows that mar­keters may have finally moved beyond social ROI. Social net­works are hav­ing their moment in the sun. Mar­keters are shift­ing spend from cost-per-click (CPC) to cost-per-thousand (CPM) media look­ing for more value as the click through rates (CTR) for paid adver­tis­ing have nearly dou­bled this year. CPM rates are up 120% YOY, with the major­ity of that growth occur­ring in just the last quar­ter. Adver­tis­ers buy­ing on a CPC still out­spend those buy­ing on a CPM, but with this shift they’ve seen their mar­ginal CPC rates decline 40% YOY.

Adobe Dig­i­tal Index exam­ined over 131 bil­lion Face­book ad impres­sions, more than 1 bil­lion Face­book posts and 400 Mil­lion unique vis­i­tors to social net­works includ­ing Twit­ter, Pin­ter­est and Tum­blr in the first annual Social Media Intel­li­gence report, which reviews all facets of social media—paid, owned and earned.

The report has found that Face­book Ad ROI and CTR have expe­ri­enced strong growth. And, rev­enue per visit on Twit­ter is up 300%. 

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Twit­ter, which was already a major source of refer­ral traf­fic for media com­pa­nies, has improved its share of traf­fic to retail­ers by 2.5 times, out­grow­ing the other social media dar­ling for retail­ers, Pin­ter­est, who grew 84% this year. Just when we thought Face­book may be unstop­pable, Twit­ter and Pin­ter­est appear to be tak­ing some of the refer­ral traf­fic from the social media jug­ger­naut as Facebook’s refer­rals to retail­ers has dropped 20% YOY.

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Social net­works become more mar­ket­ing friendly, brands see big jump in ROI

In 2013, the major social net­works got seri­ous about mak­ing their plat­forms more mar­ket­ing friendly.  Face­book led with the new Time­line user inter­face, the intro­duc­tion of Graph Search and improved audi­ence tar­get­ing capa­bil­i­ties. Twit­ter also beefed up their tar­get­ing capa­bil­i­ties while acquir­ing Vine and MoPub to increase their video and mobile capa­bil­i­ties, respec­tively. Most recently, Pin­ter­est got in the game with the intro­duc­tion of Pro­moted Pins.

All these changes, along with mar­keters’ increased sophis­ti­ca­tion at lever­ag­ing the plat­forms, are pay­ing div­i­dends. On Face­book, ROI (defined as rev­enue / expense) has increase 58% over the last year.

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On Twit­ter, rev­enue per visit (RPV) jumped 300%. While still not as prof­itable as Facebook’s $0.93 and Pinterest’s $0.55, this notable jump puts Twit­ter more in-line with the other major net­works when it comes to deliv­er­ing ROI.

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Mar­keters fig­ur­ing out how to use social media…sort of

Brands ever increas­ing com­mit­ment to social media is show­ing, but the dis­ci­pline is a long ways from being mature. The amount of con­tent pub­lished via brand pages jumped up 79% year-over-year, and engage­ment with that con­tent is up 115%.

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This shows marked improve­ment. But, mar­keters could be miss­ing an oppor­tu­nity with video. While not as strong as image posts (4.3%), video has the next best aver­age engage­ment rate at 3.5%. That said, only 6% of posts con­tain video while 70% of posts have an image. Con­sid­er­ing the typ­i­cally higher cost of video, it will likely never become as fre­quent as image posts, but with sim­i­lar results, it appears to be an oppor­tu­nity worth explor­ing fur­ther as a means to keep con­sumers engaged con­sis­tently with rich content.

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What’s next for social media?

Head­ing into the crit­i­cal hol­i­day shop­ping sea­son, social media looks poised to take a much big­ger share of mar­ket­ing invest­ments ver­sus last year. Mar­keters are get­ting smarter with the ways they are engag­ing con­sumers on the social net­works, and ramp­ing up invest­ments in paid social to help amplify. With increas­ing CTRs, decreas­ing CPCs, and with engage­ment on posts on Face­book up YoY this is an excel­lent time to ramp up ad offer­ings and with other plat­forms gain­ing share from Face­book, brands will expand social media pro­grams to include a vari­ety of sites.

Mar­keters should be cau­tious, how­ever, not to over-use text posts and the abun­dance of these posts will likely become less impact­ful over time. Although it costs more, video post­ings will be more engag­ing. Mar­keters will want to plan ahead and ded­i­cate more resources to man­ag­ing social media con­tent.  Track­ing social ROI remains dif­fi­cult as the data is still held in silos and attri­bu­tion algo­rithms are nascent in their design and avail­abil­ity.  There is still tremen­dous upside poten­tial for social media and we will bring you the results from the hol­i­day shop­ping sea­son on Black Fri­day and Cyber Monday.

You can down­load the full report here

 

Fol­low me on Twit­ter for more news on social media @joeDmarti.

 

Face­book® is a reg­is­tered trade­mark of Face­book Inc.

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