As social networks grow in size, advertisers are also increasing ad spending on social sites. In 2011, 10.8% of all US online ad spending will go to social networks; and that number is expected to rise to 12.1% in 2012. IMS took a look recently at some of the factors helping to drive this increase in advertising across social networking sites and how this media channel can be adapted for direct response. Here are the top five reasons we see for the projected increase in social ad spend in 2011:
1) Increased social site user population. Facebook grew from 121M to 147M unique users in 2010. More users mean more impressions – and more potential for ad spending
2) Targeting ability. Social sites give advertisers the opportunity to isolate and target very precise niches. Marketers with profiling data can set up campaigns to only reach the most likely to convert consumers. For example, IMS recently ran a Facebook Ads campaign on behalf of Hair Club to promote their American Chopper show appearance. We targeted only men 35 to 55, who had listed any of a dozen chopper related interests in their profiles. With interest targeting and the event tie-in, the cost per fan was the lowest yet for an IMS client campaign.
3) New ad products, including in-app ads. Over 225M people play the top 5 games on Facebook, creating a huge audience for in-game ads. Sites are also developing more engaging ad types that give users the opportunity to take an action in the ad, such as “Like” or “Share”, without leaving the page they are on.
4) Local targeting and increased SMB spending. With the increase in location-based social networking (Foursquare, Facebook Places, Yelp Check-Ins), more small and medium business are using social networking sites on a geotargeted basis customized to their sales area.
5) More social networking sites following the “Facebook model”. LinkedIn has announced that they will begin running more social ads (above) which can be targeted to people based on their professional profile.
IMS is watching this space closely to establish where the best opportunities lie for our clients. As the audiences on these sites grow, we will continue to test new targeting and messaging to achieve and exceed goal costs-per.
