When it comes to marketing, social media is out to make a big splash. Consumers are hooked on social-sharing platforms, and businesses are growing ever more reliant on social data as a means of making both budgetary and strategic decisions. In fact, according to a new study commissioned by Sprout Social and conducted online by the Harris Poll, 85 percent of business execs will soon rely on social information as their main source of intelligence. This is perhaps unsurprising, given that consumers cited social as their preferred means of learning about brands, ahead of email, print and television ads. What’s happening in the social stratosphere? We take a look.
Ad Costs Rebound
Last year saw a dip in CPMs across social sites as brands halted advertising campaigns at the start of the pandemic and then adjusted as the year went on. Nielsen reports that 61 percent of consumers are now ready for a return to normalcy, a sentiment that parallels the rebounding social media ad costs. Facebook pricing rose by up to 30 percent in mid-March, compared to the same time last year, while marketing campaigns on Facebook, Instagram, Pinterest and Snapchat enjoyed a 47 percent surge in social CPMs. This boost is likely due to consumer optimism about the vaccine rollout, combined with excitement around new platforms like Clubhouse and Discord. “The economy is set to come roaring back, and there’s a lot of competition to get in front of consumers who have been sitting on built-up savings they haven’t been able to spend this past year,” Ross Shelleman, CEO of Aisle Rocket agency, told AdAge.
Though social media was already a preferred pre-Covid method of engagement, lockdown certainly amplified its appeal. Facebook reported over $28 billion in revenue last year, while Twitter upped its base to 192 million daily users and Snapchat increased revenue by 62 percent. According to the Harris Poll, social usage also increased for 54 percent of consumers in 2020, with Gen Z and millennials mainly responsible for that spike. Their engagement grew by 65 percent and 63 percent respectively, and levels for those cohorts are expected to continue rising.
What’s more, the ways we’re using social media have experienced a shift. The Harris Poll report for Sprout Social indicates that 43 percent of consumers now turn to social media when searching for new brands, while 33 percent use those platforms to recommend favorite brands to friends and family, and 36 percent use them to pull the trigger on purchases. The bottom line? Positive social media experiences translate to sales, as evidenced by the 78 percent in the Harris Poll who were more eager to make a purchase following a happy encounter with a brand on a social platform. Indeed, e-commerce has experienced remarkable overall growth, following the shuttering of brick-and-mortars due to the pandemic. Instagram, TikTok, Facebook and Pinterest recently invested in various forms of social-commerce technology. YouTube is testing a new feature that will further simplify in-app shopping, and Snap recently bought a startup, Fit Analytics, that helps brands solve sizing issues for online customers. Meanwhile, a whopping 95 percent of executives believe brands will turn more often to social data for help identifying business opportunities over the next three years.
Expectations on the Rise
Given these stats, social media budgets will likely grow as well. The Harris Poll indicates that 46 percent of executives expect their companies’ marketing budgets to increase as much as 100 percent in the next three years. Social platforms are expected to inform key business decisions, from research and development to product choices to customer service responses. That’s partly due to the fact that consumers crave a more personalized experience, and they expect brands to harness the power of social media to create curated interactions. According to the Harris Poll, 59 percent of customers expect companies to read and analyze the messages they post, while 51 percent believe brands should know them better based on their online activity. “Our research shows that US companies today rely more on social media than any other communications channel for virtually all critical business activities,” said Anna Ginovker, director and senior consultant at the Harris Poll. Consumers have made their social preferences known. Now it’s up to brands to deliver.