Social media ad spend growth plummets? A rebuttal

Rumours of the demise of social media ad spend growth are being widely exaggerated.

Recently, the latest WARC figures on the growth of online ad spend picked up a number of column inches in the UK press, especially with lurid headlines such as ‘Social media ad spend plummets amid decline in trust‘.

These pieces focused on Facebook’s lingering trust issues following the Cambridge Analytica scandal in 2018, informing a slowing of the near relentless growth of social media ad spend in the first three months of this year. For those of us working in social media on the brand side, surely a cause for concern when it comes to our hard-won budgets and their effectiveness, you might think? Well, you might be wrong.

Correlation not causation?

The situation when it comes to social is often far more nuanced than the headlines can or want to make out. Correlation does not always mean causation and those looking to get to the crux of the matter need to ask more questions.

For example, have marketers seen that due to the sophistication in the way they test and learn, that their marketing spend is more efficient and thus they are not needing to spend as much?

Within the social channels over the last couple of years, ad placement options have been expanded to enable greater choice in how budgets are spent, against more cost-effective measures. Strategically, there has been a shift by marketers to buying based on niche targeting options on social, as it is becoming more apparent that approaching a more defined audience combined with social intent signals is more valuable in the long run.

Also worth consideration are other market forces such as the impact of Brexit, economic uncertainty and how this may have impacted on available marketing budgets – which has nothing to do with trust issues.

Strategy at a local level

To make a balanced and objective opinion when it comes to the real state of play in social, I would always err on the side of caution – looking at the raw data as well as each platform’s individual performance rather than global, more generic ‘by channel’ trends.

As a hands-on social media professional, I know that my strategies are set by my audiences, their preferences, and the localised business objectives for my parent organisation in their specific industry sector, rather than setting a global, broad-brush approach to assess media channels by geography and sales performance. The only organisations who really benefit from this kind of a global view of channel sales metrics are the social media channels themselves.

The WARC findings don’t give a specific view of UK social media ad spend either, so for those more jittery about hanging on to their budgets here it would be wise to wait for a more UK-specific picture before shifting spend around.

Seasonality and audience volumes

Seasonality can also play a significant role when it comes to bumps in sales figures. For example, in Facebook’s Q1 investor update they highlighted that ad spend was down quarter-on-quarter in Europe. But then, Q4 is typically so high thanks to heightened and more expensive Christmas, Boxing Day Sales and even student back-to-university promotional activity – itself a double-edged sword as some brands will actively avoid spending at such a peak time of year.

Year-on-year from 2018 to 2019, spend in Europe was up 21% – yes, slowing down, but largely due to some fast growing markets on the continent plateauing. It’s hardly cause for dramatic concern or language such as ‘plummets’. Even the recent Bellwether from the IPA, possibly one of the more pessimistic, industry-wide, for some time, still registered the internet as the medium seeing the greatest upward revision in marketing budgets for the quarter ahead. Other market forces are, of course, at work beyond trust in social channels, and the Bellwether is the strongest indicator that decision makers around the country are placing considerable faith, during difficult times, in the results which digital marketing as a whole can deliver.

It’s also easy for non-industry insiders to forget that social has enjoyed a phenomenal boom – but we’re now on a journey to make it all much more effective. There is a tremendous focus in the industry right now to curb the ‘wild west’ boomtown mentality and improve the brand safety measures which are being introduced by the social channels. This will over time have a knock on impact on audience volumes, but should impact positively on the quality and likely return from those engagements.

Brand safety doesn’t mean avoiding social

Speaking from my experience at Direct Line Group, we are very focused on brand safety, working closely with a number of channels to protect and enforce the measures in place to safeguard company assets and communications in the digital space, and the consumers we are seeking to engage. This informs the decisions we make on which ad formats and placements we use from a strategic perspective – but it doesn’t mean we avoid the channels these products are offered through on a wholesale basis.

Most importantly, advertisers are only going to move away from social and digital channels when their target audiences are not using them. Perhaps most telling here is Twitter’s growth to date and Facebook’s recent revenue boost – even after the record fine they paid to the FTC in the US, and the lingering concern after Cambridge Analytica. Facebook’s earnings have exceeded expectations now for two consecutive quarters, a fact which simply would not be the case if users were abandoning the platform in droves. It continues to provide a valuable service in people’s lives, and brands will continue to plug into that access. There will always be some users who decide to unsubscribe due to privacy concerns, just as user attrition will continue for any number of other reasons too.

The industry as a whole must remain open and optimistic about the possibilities which continue to be driven by social, and not taken in by sensationalist sweeping statements which don’t deliver on the detail.

[“source=econsultancy”]