The State Of Social Media

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Presented by Jim Edwards at Business Insiders Social Media ROI conference on Sept. 27, 2012

Presented by Jim Edwards at Business Insiders Social Media ROI conference on Sept. 27, 2012

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  • 1. We know social media isa big deal for marketers.
  • 2. But does it pay off?
  • 3. Facebook has 1 billion users
  • 4. Here’s the total size of the social media universe, in users: 1000 955 800Number of users 600 500(Millions) 400 330 250 200 174 40 20 16.8 0 Facebook Twitter Windows Live Google+ LinkedIn Instagram Foursquare Pinterest Messenger
  • 5. In China, social-media is just as big: 600 536 500 400Social media users 310 300 by company 300 (millions) 200 100 0 Qzone Tencent Weibo Sina Weibo
  • 6. So the audience is there.What about the money?
  • 7. Americans spend 53 billion minutes per month on Facebook (~5 hours per user). Facebook 53,457,258 Blogger 723,793 Tumblr 623,525 Time spent on social media Twitter 565,156 LinkedIn 325,679
  • 8. But Facebook only gets about $5 per user per year
  • 9. That seems like chump change.
  • 10. But is it?
  • 11. U.S. Ad Revenue Per Month Per User: FACEBOOK: $1 GOOGLE: $8 TV: $12
  • 12. Users are more likely to be in spending mode than average : More likely to buy music 75% More likely to be a heavy spender on clothes/shoes 47% More likely to go on a date 45% More likely to attend a sporting event 19% More likely to go to a gym 18%
  • 13. Marketers have showed up as a result. Advertising revenues, by quarter: 1200 $992 1000Millions 800 600 400 200 $65 $63 $0 $0 $0 $0 0 Facebook Twitter LinkedIn Pinterest Google+ Instagram Foursquare
  • 14. That’s~$4.5 billion of social media spending per year.
  • 15. Heres how that compares to total digital ad spending: 35 $32 billion 30 25 20 Ad Revenues (billions) 15 10 $4.4 billion 5 $1.6 billion 0 Total Web Social Media MobileEstimated annual run-rate based on 2011-2012 numbers
  • 16. Social media is14 %of all online ad spending.
  • 17. Growth in social media ad spend has been super fast. Heres Facebooks ad revenue growth: 3,825 3,154 Ad Revenues 1,868 764 130 231 60 2006 2007 2008 2009 2010 2011 2012
  • 18. These are the 10 biggest advertisers in social media, by impressions served, per comScore: AT&T Inc. 12,916,545 Microsoft Corporation 4,092,246 JustFabulous, LLC 3,891,187 Walt Disney Company 3,693,877 IAC - InterActiveCorp 3,623,737 State Farm Group 3,570,067 Amazon.com, Inc. 3,317,759 Weight Watchers 3,244,864Universal Technical Institute, Inc. 2,976,699 Netflix, Inc. 2,956,381
  • 19. Facebook is profitable. LinkedIn is profitable. Twitter is probably profitable.But has any of this been profitable for their advertising clients?
  • 20. The evidence is anecdotal.
  • 21. LinkedIn’s revenues are still growing nicely
  • 22. Accenture says it saves up to $150,000per executive by using LinkedIn instead of a headhunter for recruitment
  • 23. Now Facebook: These are Facebooks 10 biggest advertisers, according to our own research:
  • 24. Facebook Anecdotes (from Facebook):• 70% of Facebook campaigns deliver ROI of 3x or better.• 49% campaigns delivered 5x or better.• Electronic Arts spent $2.75 million promoting Battlefield 3 on Facebook. They attributed $12.1 million of their sales to these ads, a 4.4x return.
  • 25. • P&G’s CEO said he was proportionately reducing his $10 billion ad budget because exposure on Facebook is free. • Then he laid off 2,000 people! • And he cut half a percent off his SG&A expenses.- Bob McDonald, P&G CEO, January 2012
  • 26. Some DSP partners in Facebook’s real-time-bidding ad exchange say advertisers used to getting a 10X ROI elsewhere are making 16X with FBX
  • 27. But why would any company advertise on Facebookwhen it can host a Brand Page for free? Because only 15%of branded posts actually get seen by Facebook fans.
  • 28. So how big is this the FBX market, potentially? About another additional$1 billion per year.
  • 29. Now let’s look at Twitter.Twitter doesn’t make its ROI data public, but here’s an example:
  • 30. Online jewelry site Bottica says customers coming from Pinterest spend an average of $180 per visit.Based on sampleof 50,000 visitors $180 $162 $85 Pinterest Site Average Facebook
  • 31. Zappos built a site toencourage users to share purchases on Pinterest
  • 32. But Zappos users posting on Twitterbrought in much more revenue per post: $33.66 $2.08 75¢ Twitter Facebook Pinterest
  • 33. Compare that to Pinterest.When Pinterest users show up, they spend more
  • 34. But social media still underperforms as a referrer to e- commerce sites. 120 104.24 101.25 100 91.6 91.7 90.4 Average 84.58 79.08 82.72 80order value 64.69 63.37 64.19 60.7 by traffic 60 source: 40 20 0 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Email Social Search
  • 35. Thank you.