From the beginning of 2017 to the end of 2017, SocialCode witnessed significant increases in digital advertising spend across the board, but the allocation of spend is changing. Our clients, which span Fortune 500 companies and early-stage disruptors, are exhibiting some notable trends. Let’s dive into some of the ways brands are approaching their digital strategy going into 2018.
Smaller Platforms Get A Bigger Slice of the Pie
While Facebook continues to make up the majority of our clients’ online advertising dollars, Instagram, Pinterest and Snapchat are capturing a larger share of the pie. For example, in the first quarter of 2017, Snapchat made up 1.88% of our clients’ ad spend, but by the fourth quarter of 2017, it comprised 3.17% of spend. Similarly, Pinterest was responsible for 2.02% of our advertisers’ online dollars, but by Q4 2017, clients were allocating 5.50% of ad dollars to Pinterest.
This phenomenon isn’t just true of SocialCode’s clients. Between March 2017 and September 2017, Instagram doubled the number of advertisers on its platform to 2 million.
The explosive growth of these digital platforms also comes across in the various ways our friends and family members are interacting with them on a daily basis. Snapchat, for example, reports that its users are opening the app an average of 25+ times a day, while Pew reports that 45% of all women online use Pinterest. The chart below demonstrates the increase in usership that various platforms saw from Q1 2017 to Q4 2017.
The Rise of the CRM
This year, SocialCode saw a steady quarterly increase in spend on first-party audiences; that means marketers are dedicating more of their ad dollars to reach the customers they already know, using existing customer data such as a loyalty email list. In Q3 and Q4 of 2017, we saw an increase in investment against first-party audiences and a decrease in spend against similar audiences or prospects such as Facebook Lookalike Audiences.
One contributing factor is that our retail customers are increasingly prioritizing their highest-value customers and nurturing them in remarketing campaigns, especially over the holiday shopping season.
New Players Such As Instagram Stories and Facebook Canvas Gain Traction
At the beginning of the year, our team predicted that three ad units would make a splash this year. As it turns out, we were right. Quarter over quarter, SocialCode witnessed a marked increased in our clients’ adoption of immersive, clickable, direct-response ad units. Most notably, we saw a steady quarter-over-quarter increase in spend on Facebook Canvas Ads, Facebook Dynamic Ads (also known as product catalog ads), Facebook Offer Ads.
This year, our clients also increased their investments on ads that appear after Instagram Stories, following the rapid growth in user adoption of the relatively-new feature.
The higher investment in ad units like Canvas and ad placements like Instagram Stories, both characterized by their full-screen, immersive experience, signals the importance of commanding an entire screen to reach people in a distracting, skippable world. The growing traction of ad units like Offer Ads, which typically drive people to redeem a coupon, or Dynamic Ads, which automatically show you specific products you’ve previously browsed or would be likely to browse, supports the notion that marketers have come a long way from the days where digital was viewed as a vehicle for brand awareness. In fact, SocialCode has seen spend on direct response campaigns, or campaigns designed to elicit an immediate response or action from consumers, spike in recent years:
Clients’ DR dollars on Facebook/Instagram increased 26% from Q1 2016 to Q1 2017.
Clients’ DR dollars on Snapchat increased 146% from Q1 2017 to Q2 2017.
Clients’ DR dollars on Pinterest increased 817% from Q1 2016 to Q1 2017.
Want to learn more? Check out some of SocialCode’s top performing content of 2017: