As people spend more and more time on the Internet, they’re exposed to brand messages at all times, coming in from all sides. The excessive marketing make it difficult for brands to stand out, though sponsored social is one proven way to do so.
According to State of Sponsored Social 2015, a recent report by sponsored social agency IZEA and research firm Halverson Group, consumers are noticing sponsored posts more than ever, about three per day. As a result, they’re considered among the most effective marketing tactics.
On a scale of 1-10, sponsored social earned a 7.29, in terms of effectiveness. Only content marketing and experiential marketing ranked higher.
“As a society and as consumers, we’ve become blind to traditional forms of advertising. That, combined with the rampant fraud in the display advertising industry, has left brands seeking new avenues to pursue, and opened the door to social creators who have built-in credibility, creativity, and engagement,” says Ryan Schram, chief operating officer at IZEA. “Being able to involve advertising as part of content is as old of an idea as the dawn of soap operas or the Texaco Star Theater in the early days of TV. Now, that same concept is being applied at-scale through sponsored social.
Fifty-four percent of the 511 marketers surveyed utilized sponsored social in 2015, the same amount that used display ads. However, the use of the latter declined four percent, while sponsored social is on the rise.
The how and the why
That popularity doesn’t look to be waning, as brands like Pier 1, Seamless, Groupon get on board. Fifty-four percent of the study’s respondents feel more positively about sponsored social than they did a year ago; more than half have stand-alone budgets for sponsored social, as well.
Again, only content marketing (59 percent) ranked higher in this area. By contrast, marketers have soured on the old-school channels in the last year. TV, radio, magazine and especially newspaper ads have declined in sentiment.
Tony Longo, co-founder and chief executive (CEO) of Ground Signal, points out that sponsored social’s rise in popularity makes sense because its native properties make the posts less susceptible to ad blindness.
“Sponsored posts are in the concentration stream, not off to the side where we have been trained over the years to ignore,” says Longo. “The targeting is also getting better and better where the advertising is actually trained for the user, giving them something they may actually be interested in.”
Of the various platforms, Facebook was the most popular. Sixty percent of marketers used sponsored posts, up 4 percent from last year, when Facebook likes reigned supreme. They’re down 7 percent, in part because the social media giant put an end to likegating last November, while brand follows declined similarly.
In Longo’s opinion, the ban on likegating forced marketers to think more about quality than quantity, raising the bar for sponsored content. He adds that he’s seen some good examples on Instagram.
“I wish there was a feed of just Instagram ads,” says Longo. “I’ve seen a campaign lately by Lyft, which made me ‘stop and stare’ in my feed. The Sunglass Hut ads have been great, too: humanized.”
Nearly a quarter of the marketers surveyed have sponsored photos. That’s slightly less than videos, despite video being seen as the most valuable form of sponsored social.
Marketers expect to pay $475 for a video. A blog is valued at $411 and in a distant third, a sponsored email is estimated to cost $283. On the less expensive side of the spectrum, check-ins, Likes, Twitter followers and Pins are all expected to be less than $200.
Only 11 percent of marketers opted not do any sponsored social.
The creators’ side
Part of sponsored social’s appeal comes from the creators who are often involved with the posts. IZEA found that more than 85 percent tell their friends about – and purchase from – the brands that sponsor them. In addition, and possibly most valuably, 83 percent of them share additional posts about their sponsors for free, beyond the contractual agreement.
This is the point L’Oreal’s Bianca Bolouri made during a recent ad:tech panel about working with social media influencers. Madilyn Bailey, a musician with 2.4 million YouTube followers, starred in a L’Oreal campaign, promoting the brand’s straight shampoo. When detractors spoke out against the ad, she defended it – not because she was expected or even asked to, but because she wanted to.
Like native ads, sponsored social should be disclosed, per the Federal Trade Commission (FTC). While 67 percent of content creators are aware of the FTC guidelines, only 8 percent of marketers are fully aware of them. Fifty three percent have some level of familiarity, while one-third have none.
Schram thinks this is a disappointing byproduct of the industry lacking standards. He says the lack of disclosure is the same “slippery slope” that made it necessary for platforms to ban likegating and similar practices.
“These are common sense best practices, but they’re often ignored when brand marketers rely on agencies and vendors who may be interested more in deploying a campaign than doing the right thing,” adds Schram.
“We are living in the creator economy and have just begun to witness its impacts on marketing and advertising,” he continues. “It brings a human element back into digital and integrated marketing. How exciting — and powerful — is it to have real humans, the consumers themselves, being compensated to work with brands they love? We haven’t seen anything like that before.”
Sponsored social posts are one of the up-and-comers in digital marketing. The tactic is steadily growing in popularity, especially as the ban on likegating has forced brands to focus more on the quality of their posts.
This strategy is a particularly effective one, as more people tend to notice sponsored posts. Their native properties, being a part of consumers’ feeds, make them less susceptible to ad blocking. As a result, more brands are going this route. And as brands become more savvy and target better, sponsored social is likely to get even bigger in the future.
GroupM predicts that global ad spend will top $547 billion next year, up from $524 billion this year. While television will still capture the biggest share of that 12-figure pie (41%), digital's share will grow from 31% to 33%.
What are some of the major developments that are likely to shape multi-channel marketing in 2017?
So what makes content go viral? And what makes people participate in these phenomena?
Brands have been upping their investments in new ad products from popular social media services, but are they getting their money's worth?