Entering the New Year, and with ongoing Covid-19 uncertainty, how should marketers plan to spend their dollars on social media advertising? Smartly.io, the leading social advertising automation platform for designers and performance marketers, announced new research outlining how retail organizations are spending their marketing dollars on social media advertising. Based on a survey of 300 senior marketing executives from retail organizations around the world, the report examines year-over-year findings while also exploring new topics to determine how the COVID-19 pandemic has impacted social advertising and will inform 2021 marketing plans.
Where’s the Money?
2020 moved much of the world online, with consumers rapidly shifting to digital channels as brick-and-mortar retail locations closed their doors. In response, marketing teams were forced to reconsider advertising budgets, optimize their marketing mix, and adopt omnichannel strategies. Smartly.io found that a majority of companies surveyed (66%) have an annual marketing budget of $20 million or more, and most (74%) already allocate 31% or more of their marketing budget to social media advertising, where 12% allocate 51% or more. These numbers are expected to increase as more and more retail organizations adapt to the pandemic disruption and changing consumer habits.
Spread the Love
Facebook remains the most popular platform among global retailers, with 93% currently buying social media ads on the platform. Instagram is quickly becoming a favorite among retailers too, with 90% of respondents reporting that they buy ads on the platform, compared to just 56% last year. However, while one-third (36%) of companies are currently spending most of their social media advertising dollars on Facebook, almost half of respondents (42%) said they are seeing the best return on ad spend (ROAS) from Instagram — compared to just 21% who reported this in 2019.
The Value of Time
Unfortunately, most respondents (72%) agree their social media advertising creation and delivery involves manual processes that are often time-consuming. The good news? There are solutions available that can automatically create ads and videos from product images, automate targeting and budget allocation, and even select when and on what platform retailers should buy their ads. That said, 81% of retail marketers wish to automate at least part of the creation and delivery of social advertisements in the New Year. This opens up more time for strategic work and creative testing – finding the right creatives and messaging helps in building trust and meaningful customer relationships.
Bridge the Gap
Just as importantly, automation solutions provide the time needed for social media advertising and creative teams to collaborate more effectively. “The past year has proved the prominence of social media within the marketing stack,” said Robert Rothschild, VP and global head of marketing at Smartly.io. “Retail marketers have always understood the value that social media advertising brings to their campaigns, but with a global pandemic accelerating the shift to digital, it has been an essential ingredient to engaging with the right consumers. While our recent research indicates creative remains the primary performance lever, many retail marketers acknowledged that their social media advertising and creative teams still do not collaborate effectively at all stages of the marketing process. In 2021, it’s time to bridge the gap between performance and creative teams, and invest in technology to scale creative and improve ad performance that will empower teams to work more seamlessly — even in a remote environment.”
To be successful, retailers will need to continuously adapt their marketing to align with the ever-evolving COVID-19 economy and their consumers’ preferences. Even as in-person touchpoints return to our daily lives, social media will still play a significant role in how shoppers discover, follow and purchase from their favorite brands.