What can advertising spend tell us about the future of social networks?

Social media, as an advertising channel, is relatively young compared to mainstays of the online advertising world like display and search marketing.

Social media, as an advertising channel, is relatively young compared to mainstays of the online advertising world like display and search marketing.

Facebook and LinkedIn first began offering ads to businesses in 2005 and 2006 respectively, but other major social networks such as Twitter, Instagram and Pinterest only began selling advertising from 2010 onwards.

Nevertheless, we now take advertising on social networks for granted, and a social platform’s ability to woo brands successfully can be crucial in determining its long-term future. Much has been made of Twitter’s inability to turn a profit in spite of its widespread popularity as a social network and source of real-time news updates, and all eyes are on Snapchat’s interaction with brands in the wake of a massive Initial Public Offering.

Therefore, finding out where advertisers are currently investing their paid social spend, and where they plan to invest it in the future, can provide a revealing insight into the long-term prospects of different social platforms.

The State of Digital Advertising 2017, a new report by ClickZ in partnership with Marin Software, surveyed more than 500 digital marketers to find out where and how they are investing their advertising spend.

So what can we learn from its findings about the future of various social networks?

The kings of social spend: Facebook, Instagram and LinkedIn

Investment in paid social advertising among advertisers as a whole is extremely strong, with 73% of advertisers reporting that they invest in paid social advertising on desktop, and 70% reporting the same for mobile.

This is comparable to 74% who say that they are investing in paid search advertising on desktop (70% on mobile) and 70% who are investing in desktop display advertising (61% on mobile).

Of the various social platforms that advertisers are investing in currently, it comes as little surprise that Facebook is king, with 46% of advertisers globally investing an average of 65% of their social spend into the platform.

Facebook’s own Instagram proved to be the second most popular platform for paid social advertising, with 36% of advertisers investing at least some of their spend into the platform, although the average amount invested was only 12%.

Many advertisers may be taking advantage of Facebook’s integrated functionality to run ads from the same campaign across both platforms, which Facebook encourages its customers to do.

Microsoft-owned LinkedIn is taking home the second-largest share of advertising spend, with 33% of advertisers investing an average of 18% of their social spend into the platform. The figures suggest the bulk of this spend is dominated by B2B advertisers, who are committing an average of 37% of their social spend to LinkedIn (B2C advertisers, by comparison, are investing just 6%).

The longer-term prospects for each platform also look extremely healthy. Despite the fact that Facebook is reportedly running out of space on users’ News Feeds in which to advertise (as reported by recode), 61% of advertisers say they are planning to increase their investment in Facebook over the coming 12 months.

A further two-fifths of advertisers (40%) are planning to increase their spend on Instagram, and the same for LinkedIn. Both platforms have worked hard to expand their offerings to brands over the past year, with Instagram introducing a ‘Shop Now’ feature to encourage ecommerce, and LinkedIn launching Sponsored InMail in March 2016, then opening it up to self-service campaigns the following November.

But while things are looking up for Facebook, Instagram and LinkedIn, the same can’t quite be said for Twitter.

Twitter struggles to capture ad spend

As I mentioned earlier on, much has been made of Twitter’s struggle to deliver consistent revenue over its short lifespan. And while the figures from The State of Digital Advertising 2017 aren’t all bad, they don’t paint a dramatically different picture, either.

Twitter came in as the third most invested-in platform among advertisers, with 35% of advertisers saying that they invest some part of their social spend into Twitter. However, respondents only invest 13% of their spend on average into Twitter, an amount which barely eclipses that of Instagram (12%) and Pinterest (11%).

Twenty-seven percent of advertisers reported that they have plans to increase their spend on Twitter over the coming 12 months. But perhaps more noteworthy is the fact that 11% reported they are planning to decrease their investment in Twitter – a higher percentage than on any other social platform, where the percentage who plan to decrease spend ranged between 5 and 7%.

These figures point towards something of an apathy towards Twitter from advertisers deciding where to allocate their social spend. They aren’t dramatically negative, but they also aren’t hugely encouraging, especially amidst other reports that the micro-blogging platform may be dying out.

Advertisers are testing the waters of visual social networks

Visual social media may be the next big trend in social, if it isn’t already. As it has emerged that images and videos perform significantly better on social media than non-visual content, interest has picked up around visually-focused social networks such as Instagram, Pinterest and social media’s hip new darling, Snapchat.

Are advertisers investing their social spend accordingly? Well, sort of. As we’ve seen, Instagram – undeniably the titan of visual social media – is already popular with advertisers, and set to become more so.

Instagram recently expanded its carousel ads for businesses, at the same time as allowing users to upload multiple photos in one post

Pinterest is currently taking in the lowest percentage of ad spend (11% on average), but is still seeing investment from 29% of advertisers, possibly due to its strong ecommerce offerings and forward-thinking visual search technology. A further 16% of advertisers say they plan to increase investment in Pinterest over the coming 12 months, the second-lowest percentage reported (above Tumblr, at 6%) but not insignificant.

Meanwhile, close to a fifth of advertisers (19%) say they plan to increase spend on Snapchat over the coming 12 months. Initially dismissed as a silly app for teenagers, Snapchat’s ephemeral, there-and-gone content style has made waves in the social media industry, and may have changed the face of social media for good, with Instagram, Facebook and now even WhatsApp adopting their own versions of Snapchat’s disappearing images.

However, this may not be good news for the original, as users show more interest in Snapchat’s imitators than in Snapchat itself.

Snapchat had a strong showing with its Initial Public Offering last week, selling 200 million shares to raise $3.4 billion, and the figures show that advertisers are interested. Time will tell whether Snapchat’s long-term prospects are like those of Facebook and Instagram, or more like Twitter.


For more cutting-edge insights and analysis into social media spend and global advertising trends in 2017, download The State of Digital Advertising 2017.


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