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Transcript of "Nielsen paid-social-media-adv-report-2013"
1. PaidSocialMediaAdvertising Industry update and best practices 2013
Methodology Executive SummaryA survey commissioned by Vizu, a Nielsen Social media has grown exponentially. One out of every 7 people in the world hascompany, of more than 500 U.S. digital a Facebook page. Nearly 4 in 5 active internet users visit social networks and blogs.marketing and media professionals was Accordingly, marketers are flocking to the medium. Whereas their customers areconducted by Digiday in September adopting the medium with purpose, however, marketers are approaching with-October 2012 on current attitudes and caution. Marketers are increasing budgets and using social media in conjunctionpractices regarding paid social media with other advertising channels, but return on investment (ROI) continues to beadvertising. Participants were contacted a question. For this survey, we focused specifically on what marketers were doingvia email and asked to take an online around paid social media advertising.survey. Participants were first asked to • Paid social media advertising is growing – three quarters of advertisers surveyedidentify themselves as a Brand Marketer, indicated that they use this channel, and 64 percent of advertisers said they wereMedia Agency, or Publisher/ Social increasing their paid social media advertising budgets in 2013, though for thePlatform. Each participant was then most part the increase is modest.presented with questions about theirapproach to paid social media advertising • To fund this increase, advertisers are shifting budget from online and offlinespecific to that classification. Results were budgets into paid social media advertising.summarized and cross-tabbed in order to • Advertisers are increasingly viewing paid social media advertising as anidentify consistencies or inconsistencies integrated, cross-platform tactic, and are running it in conjunction with otherin each constituent’s viewpoints regarding online and offline media.paid social media advertising in 2013 andopportunities to improve the outlook. A • Paid social media advertising is primarily being used to support branding-relatedsynopsis of those results is presented in efforts. As a result of this and the increasingly cross-platform way that advertisersthis whitepaper. are using the medium, advertisers “would prefer to use the exact same metrics used in the offline medium, and additional metrics specific to the online medium” to measure the effectiveness of their campaigns. Very few media sellers, however, can actually provide this. • Metrics such as likes, pins, and click-throughs are often used to measure paid social media advertising ROI, though advertisers and agencies think sales generated and brand lift, which are brand-related and have cross-platform applicability, are the most appropriate metrics to use to determine ROI. Media sellers and agencies would do well to ensure that they are able to provide these specific metrics to attract more social advertising dollars. • Unsurprisingly, many advertisers are doubtful or unconvinced about the effectiveness of paid social media advertising, indicating that the growth of the medium is being somewhat hampered by a lack of relevant, universally employed metrics. • There is a clear opportunity to get everyone on the same page, particularly around metrics. Some of the things that advertisers and agencies said would increase their use of paid social media advertising are: –– A clear link between social media and sales generated and/or brand lift –– Clarity around how to measure social media ROI –– Social media benchmarks Media sellers and agencies who invest in building out the capabilities required to deliver these capabilities are likely to capture dollars related to social media advertising.2 Copyright © 2013 The Nielsen Company.
Introduction Fig. 1: How Advertisers and Agencies Use Social MediaSocial media use among consumers hasexploded in recent years and shows nosign of stopping. Facebook now has 1 89% 0%billion active users, or one out of everyseven people in the world1. Nearly fourin five active U.S. Internet users visitsocial networks and blogs2. Accordingly, 71% 6%marketers have flocked to the medium inorder to stay in front of their customers. USE FREE TOOLS DON’T DO ANYTHINg WITH SOCIAL MEDIAHow Advertisersand Agencies UseSocial Media 75%The term “social marketing” or “socialmedia marketing” typically refers to two Advertiserspractices involving social media – the useof free tools, such as Facebook, Twitter, 81% agenciesor YouTube, and paid media, such aspaid ads on Facebook or sponsoring blog PURCHASE MEDIA AND/OR SPONSORcontent. Unsurprisingly, free tools are CONTENTpopular – 89 percent of the advertisers wesurveyed indicated that they use free socialmedia tools. However, paid social mediaadvertising is close behind at 75 percent.Among agencies, paid social media has Fig. 2: Advertisers: Percentage of 2012 Online Budget Dedicated toovertaken the use of free tools. <Fig. 1> Social Media AdvertisingSocial marketing, whether free or paid, isheavily used by advertisers and agencies.Every advertiser that we surveyed indicatedthat they did something with social media, 70%and only 6 percent of agencies that we 1-10%surveyed said that they did not do anything of budgetwith social media.Though paid social media advertising isincreasing, it is still a relatively new practice 18%among advertisers. Most of the advertisers 11-20%and agencies surveyed indicated that of budgetthey had been using paid social mediaadvertising for less than three years, with 20percent indicating they had only started inthe last year, demonstrating that this is still 13%a maturing field. 21%+ of budgetThis is also supported by the share ofbudget that marketers allocated to paidsocial media advertising in the last year. Themajority of advertisers (70%) indicated thatless than one-tenth of their overall 2012online advertising budget was dedicated topaid social media advertising. <Fig. 2> 1 Facebook, October 2012 2 Nielsen, July 2012 Copyright © 2013 The Nielsen Company. 3
Paid Social Media Advertising Budgets are Growing, at the Expenseof Other ChannelsThe majority (64%) of advertisers surveyed indicated they expect to increase their paid social media advertisingbudget for 2013 <Fig. 3>; however, those increases will be modest – between 1-10 percent. <Fig. 4> Fig. 3: Advertiser Outlook for Paid Social Fig. 4: Paid Social Ad BudgetS will grow by… Advertising Budgets 2% 41% 34% 64% 15% 11% Increase Stay the Same Decrease 1-10% 11-20% 21%+ 64% of advertisers surveyed indicated they expect to increase their paid social media advertising budget for 2013.4 Copyright © 2013 The Nielsen Company.
More than two-thirds (41%) of advertisers Fig. 5: Where Dollars for Social Media Advertising are Coming Fromsurveyed said that “social media had itsown dedicated budget,” indicating thattheir organization has dollars earmarked 23%specifically for that purpose. <Fig. 5> 41%However, most advertisers indicated that None, social Fromthey would be increasing their 2013 paid media has its online displaysocial media advertising budget at the own dedicatedexpense of other channels. Nearly one- budgetquarter (23%) of advertisers indicated theywould be shifting budget away from onlinedisplay to paid social media advertising,while 10 percent of advertisers indicated 10%they would be shifting budget away fromother online channels – namely rich media 39%and video. From other From OFFLINESurprisingly, 39 percent of advertisers online channels CHANNELSindicated that they would be shifting someof their offline budget into online paidsocial media advertising, pointing to agrowing consideration of paid social mediaas a cross-platform tactic. AdvertisersPaid Social Media Advertising is an Integrated, Mostly Branding-Focused TacticPaid social media advertising is increasingly being viewed as an integrated tactic – 66 percent of advertisers indicated that they usepaid social media advertising in combination with other online advertising, and 51 percent of advertisers indicated that they run it inconjunction with offline advertising. <Fig. 6, Fig. 7> Agencies reported a similar degree of integration. Only 5 percent of advertisersresponded that they “rarely” or “never” run their paid social media advertising efforts in conjunction with other online tactics,indicating a low incidence of social-only campaigns. Fig. 6: How Often Do You Run Social Ads with Fig. 7: How Often Do You Run Social Ads with Online Advertising? Offline Advertising? 71% Advertisers 66% agencies 51% 41% 39% 31% 20% 18% 11% 11% 7% 5% Most or all Half of the Rarely or Most or all Half of the Rarely or of the time time or less never of the time time or less never Copyright © 2013 The Nielsen Company. 5
When asked which online tactics they Fig. 8: PAID SOCIAL MEDIA ADVERTISING OBJECTIVEStypically run their paid social mediaadvertising efforts in conjunction with,advertisers’ top three responses were Primarily branding related, 45%online display (83%), online video (46%), e.g. raising awareness, inﬂuencingand mobile (40%). In the offline world, brand opinions 31%advertisers’ paid social media advertisingcampaigns were mostly combined withprint (52%), followed by TV (37%). Primarily direct-response related, 16% e.g. driving product trialsAdvertisers said that the primary purpose or site visits 15%of their paid social media ads wasbranding-related (45%), such as raisingawareness and influencing brand opinions, A mix of both--more than 25%whereas only 16 percent was primarily half is brandingdirect-response related, such as driving 29%product trials or site visits. <Fig. 8> Inaddition, when the campaign was a mix ofboth, a quarter (25%) of advertisers said A mix of both--more than 14%more than half was branding-related. half is direct-response 25%Brand marketers are viewing paid socialmedia advertising as a branding tool,and more often than not are running it inconjunction with other tactics across both Advertisers agenciesonline and offline platforms. Agencies andsocial media sellers should ensure theycan offer brand-relevant metrics that areapplicable to the online and offline spacesto increase their share of brand advertisingdollars in the paid social medium. Paidsocial media advertising is not beingtreated as a stand-alone tactic, but beingas part of a set of marketing tools toinfluence brand opinions.ROI is still a Tricky Question But Cross-Platform Consistency is PreferredAdvertisers are taking a more cross-platform approach with paid social media advertising, so it’s not surprising that advertisersdesire metrics that can span across both online and offline mediums and allow them to measure the different tactics theyemploy in a consistent manner. When asked what metrics they would like to use to calculate ROI, brand marketers indicatedby a wide margin that they would prefer to use the “exact same metrics used in the offline medium, and additional metricsspecific to the online medium.”<Fig. 9> This is reinforced by the fact that the majority of their campaigns’ primary objective isbrandingrelated, as relevant brand metrics are commonplace in the offline world but scarce in the online medium. This responsealso demonstrates, however, that advertisers recognize there is a unique aspect of the online medium that does not exist offlinethat they can use to their advantage – for example, the opportunity to validate the effectiveness of the campaign directly againstthe campaign audience.Unfortunately, only 11 percent of media sellers surveyed indicated they were able to provide these types of metrics. <Fig. 10>The majority of media sellers surveyed indicated they could provide metrics that were “specific to the online medium.” As only17 percent of advertisers surveyed were interested in online-specific metrics, there is clearly a disconnect between the metricsadvertisers want and what is available to them.6 Copyright © 2013 The Nielsen Company.
Fig. 9: Metrics Advertisers Would Like to Use Fig. 10: Metrics Publishers Can Provide 49% 42% Advertisers PUBLISHERS 29% 29% 17% 12% 12% 11% Exact same Exact same Some of Metrics Exact same Exact same Some of Metrics metrics metrics the same speciﬁc to metrics metrics the same speciﬁc to as offline as offline, metrics from the online as offline as offline, metrics from the online media, and and the offline medium media, and and the offline medium nothing some medium, nothing some medium, else additional and some else additional and some metrics metrics metrics metrics speciﬁc to speciﬁc to speciﬁc to speciﬁc to the online the online the online the online medium medium medium mediumReflecting the fact that media sellers specific actions that a computer can count Fig. 11: TOP METRICS FOR SOCIAL ROItypically report online-specific metrics, the out. However, what the industry reallytop two metrics advertisers and agencies wants is insight into the campaign’s impactsaid they had used to measure paid social on the audience – brand lift and sales What Media Sellers Indicate They Usemedia advertising ROI in the past were generated. It is not a coincidence that these“likes/pins” and “click-throughs.” <Fig. metrics translate to both offline and online11> Media sellers indicated that they mediums. Media buyers should ensure thatwere using “click-throughs” and “views.” they are using these relevant metrics to get Likes/pinsHowever, when asked what metric is most an accurate assessment of campaign ROI. Click-throughsappropriate to measure paid social mediaadvertising ROI, advertisers and agencies Unsurprisingly, the “metrics morass” has left the industry unsure of paid social Viewsresponded “brand lift” (52% and 35%,respectively) and “sales generated” (49% media advertising’s effectiveness. Two-and 46%). Media sellers also thought that thirds of advertisers surveyed said that“brand lift” was the most appropriate paid social advertising “moves the needlemetric to measure paid social advertising when combined with other efforts, but What Advertisers and AgenciesROI (52%), in addition to “shares/reposts” [they are] not sure how to measure ROI” Indicate are Most Appropriate(38%). There is a clear opportunity for or that “it’s a promising new tactic, butmedia sellers to capture more brand dollars its effectiveness is unknown.” <Fig. 12>by offering relevant brand lift metrics. Six percent of advertisers surveyed flat out said that paid social media advertisingThis “metrics morass,” or data overload, Sales Generated does not work. Media sellers who are ableis preventing marketers from clearly to provide relevant brand metrics, and who Brand Liftunderstanding the effectiveness of their proactively make improvements to ensurepaid social media advertising campaigns. the campaign’s effectiveness, will have the Shares/RepostsThe industry is going after the low hanging upper hand in capturing dollars from thosefruit when it comes to ROI metrics. Likes/ advertisers on the fence about paid socialpins, click-throughs, and views are online- media advertising’s effectiveness. Copyright © 2013 The Nielsen Company. 7
Improvement Fig. 12: Media Buyer Views on Paid Social Media Advertising EffectivenessOpportunityGetting on the Same PageThere is a clear opportunity for increased 29% 33%collaboration between media buyers andsellers. Nearly all advertisers indicatedthat “defining the campaign’s primaryadvertising objective before campaign 27% 43%start” and “establishing the metricthat will be used to measure success It’s eFFective and produces I think it moves the needle whenbefore campaign start” was either “very measurable ROI (with ROI deFIned as combined with other eFForts, butimportant” or “somewhat important” metric achieved per dollar spent) I’m not sure how to measure ROIfor a successful paid social mediaadvertising campaign. However, the mediasellers surveyed indicated that thesecommunications were actually happeningless than one-third of the time. <Fig. 13> 33% 6%Advertisers indicated that it was importantto calculate ROI—it speaks to the metricsmorass that this figure is not 100 percent—though media sellers indicated that this 27% 3%was actually happening less than one-thirdof the time.Media sellers and buyers should invest It’s a promising new tactic, but its I don’t think it works eFFectiveness is unknownin systems that allow everyone involvedin the campaign to directly collaboratearound improving the campaign’s brandperformance. This investment would help Advertisers agenciesmedia buyers increase campaign ROI,and media sellers’ ability to offer suchcollaboration would attract morebrand dollars. Fig. 13: What Advertisers Say is Important for a Successful CampaignImprovement (and vs. What Publishers Say Happens for Every CampaignBusiness) Opportunity Deﬁne campaign’s primary 98%Align Campaign Measurement advertising objective beforearound Sales and Brand Lift campaign start 32%Speaking to the same “metrics morass”that plagues the industry, 58 percent of Establish metric that will 96%advertisers and 65 percent of agencies be used to measure successindicated that “clarity around how 19% before campaign startto measure social media ROI” wouldlead them to increase their use of paid 92%social media advertising. <Fig. 14> The Calculate ROIconfusion is so prevalent that 14 percent 29%of brands said “no one” monitored theROI of their paid social media efforts. Advertisers PUBLISHERS8 Copyright © 2013 The Nielsen Company.
Specifically, 52 percent of advertisers Fig. 14: ROI Clarity Would Increase Paid Social Media Advertising Useand 66 percent of agencies said a “clearlink between social media advertisingand sales” would increase their use ofpaid social media advertising. <Fig. 15>Roughly half of advertisers (46%) andagencies (53%) also indicated a “clearlink between social media advertising Clarity aroundand brand lift.” As noted, these are the 58% how to measure 65%metrics that advertisers and agencies social media ROIthink are the most appropriate formeasuring the ROI of their paid socialmedia advertising efforts. Advertisers agenciesImprovementOpportunitySocial Media Benchmarks Fig. 15: What Would Increase Media Buyer Use of Paid Social Media AdvertisingIn addition to clarity around how theyare doing, marketers have indicated thatthey would also like to understand howthey’re doing in comparison to the rest 52% 46%of the industry. Nearly half of advertisers(44%) and agencies (48%) said that theavailability of “social media benchmarks”would lead them to increase their useof paid social media advertising, as well 66% 53%as provide some context for their socialmedia performance. <Fig. 16> Currently,advertisers receive benchmarks from a Clear link between social media Clear link between social mediadisparate variety of sources, ranging from advertising and Sales advertising and Brand Liftinternal benchmarks they keep themselvesto benchmarks from their agencies andvendors. However, one-fifth (21%) ofadvertisers say that they do not have any Fig. 16: Social Media Benchmarks Would Increase Media Buyer Usesocial media benchmarks, leaving them of Paid Social Media Advertisingin the dark as to how they compare tothe rest of the industry. When evaluatingpartners to work with, or measurementtools to adopt, media sellers and buyers 44%should look for the ability to comparetheir campaign to industry norms or to 48%internal benchmarks. SOCIAL MEDIA BENCHMARKS Advertisers agencies Copyright © 2013 The Nielsen Company. 9
CONCLUSIONMarketers are increasingly viewing and using paid social media advertising as an integrated tool. Social media is no longerbeing viewed as its own discrete medium but instead used alongside other tactics to achieve an overall, usually branding-related, objective. However, there is a gap between how marketers would like to use the medium and the current reality.This gap is the most pronounced when it comes to measuring ROI. There is an opportunity for the industry to work togetherand get on the same page, especially around providing and using the right metrics.By addressing the “metrics morass” that plagues advertisers, agencies, and media providers alike, the industry can addressthe challenges highlighted and help grow the medium so that advertising spend on social media equates to consumer usage.About VizUVizu, a Nielsen company, brings offline advertising effectiveness metrics to the online medium. By providing the first real-time,enterprise technology platform that allows digital advertisers and their partners– publishers, ad networks, exchanges and demand-side platforms – to collaborate directly around measuring and optimizing brand lift metrics, Vizu enables brands to move consumersthrough the purchase funnel, from building awareness to creating intent and preference. Used by over 60% of Advertising Age’s Top100 Brand Advertisers and the majority of the 50 largest online publishers and networks, Vizu’s platform is now part of the NielsenBrand Effect and Nielsen Campaign Ratings suites, which deliver advertising reach and resonance metrics across media. To learnmore, visit www.brandlift.com.ABOUT NIELSENNielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions inmarketing and consumer information, television and other media measurement, online intelligence, mobile measurement,trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York,USA and Diemen, the Netherlands.For more information, visit www.nielsen.com.Copyright © 2013 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or registered trademarks of CZT/ACNTrademarks, L.L.C. Other product and service names are trademarks or registered trademarks of their respective companies. 13/592510 Copyright © 2013 The Nielsen Company.