Marketers increase Social Media investment as ROI soars
By Kingsley Odii
In a recent survey conducted by Advertiser Perceptions, it has been revealed that marketers are boosting their investments in social media, with 51% of media decision-makers in the brand and agency sector planning to increase their social budgets in this category for the current year. This figure marks a significant rise from April’s data, where only 44% of decision-makers expressed intent to increase their social spending by 2023. The report suggests that social media is now delivering a higher Return on Investment (ROI) compared to the previous year.
While Connected TV (CTV) remains the top category tracked by the firm, with 54% of marketers and agencies aiming to increase their spending in this area, brand marketers have surprisingly shown a preference for social media over CTV and linear TV. On the other hand, agency counterparts favor investing in CTV and linear TV, highlighting different perspectives between brands and agencies.
The recovering state of the digital ad market is further reinforced by the latest findings from Advertiser Perceptions, as July’s tech earnings indicate an upturn in response to challenging economic conditions and changing privacy mandates. This shift in sentiment regarding social media spending recently, reflects the industry recovery mode. However, it is important to note that certain platforms are still grappling with disruption and require more clarity on the winners and losers in the field.
The research, which involved surveying over 300 executives with considerable media budgets exceeding $1 million in ad spending per month, also highlighted the contrasting viewpoints between brands and agencies. While brand marketers exhibit a preference for social media, agencies show a greater inclination towards increasing investments in CTV and linear TV, accounting for 61% and 36% of respondents, respectively. Agencies consistently play a vital role in upfront negotiations that drive the TV business and are becoming increasingly crucial in brokering advertising deals with streaming platforms.
Advertiser Perceptions also revealed that most advertisers who reduced the number of CTV partners due to budget constraints during the past year plan to re-engage with “at least some” of those partners, although no specific details are provided. On the other hand, one in four social media advertisers who cut ties with certain channel partners do not anticipate resuming those relationships, indicating a growing selectiveness among marketers in terms of where and with whom they choose to advertise on social media
The report brought attention to the mass advertiser exodus experienced by X formerly known as Twitter, following its acquisition by Elon Musk. Despite efforts by Musk, such as appointing a new CEO with strong connections to the advertising industry, the platform has struggled to regain favor with the populace. Snap has also faced revenue challenges in a down trending market, while newer apps like BeReal, which initially experienced a surge due to the pandemic, have seen stagnant engagement. In contrast, established heavyweights like Meta Platforms have witnessed a growth resurgence, attributing their advertising performance turnaround to investments in artificial intelligence and overcoming hurdles posed by Apple’s policy changes that complicate mobile campaign targeting and tracking.
Among the surveyed media decision-makers, one notable finding is that one in three individuals prioritized the ability to reach their target audience when selecting a media partner. This consideration holds even greater importance among brand marketers, with a remarkable 65% considering it to be a decisive factor in partnering with media platforms.
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