If the past year has shown us anything, it’s that social media is fundamental to the marketing stack.
While retail has been well ahead of other industries when it comes to incorporating social media advertising in their marketing mix, the accelerated shift to e-commerce in 2020 -- driven by a global pandemic -- further underscored the value of this strategy. It became clear that social advertising is essential to engaging the right consumers.
Entering the New Year, and with ongoing COVID-19 uncertainty, how should marketers plan to spend their dollars on social media advertising? At Smartly.io, we surveyed 300 leaders from global retail organizations to get a better idea of how the pandemic will inform 2021 marketing strategies. Here’s what we found.
Where's the Money?
2020 moved much of the world online, with consumers rapidly shifting to digital channels as brick-and-mortar retail locations closed their doors. In response, marketing teams were forced to reconsider advertising budgets, optimize their marketing mix, and adopt omnichannel strategies.
In fact, we found that a majority of companies surveyed (66%) have an annual marketing budget of $20 million or more, and most (74%) already allocate 31% or more of their marketing budget to social media advertising, where 12% allocate 51% or more. We only expect that number to increase as more and more retail organizations adapt to the pandemic disruption and changing consumer habits.
Spread the Love
Facebook remains the most popular platform among global retailers, with 93% currently buying social media ads on the platform. Instagram is quickly becoming a favorite among retailers too, with 90% of respondents reporting that they buy ads on the platform, compared to just 56% last year.
However, while one-third (36%) of companies are currently spending most of their social media advertising dollars on Facebook, almost half of respondents (42%) said they are seeing the best return on ad spend (ROAS) from Instagram — compared to just 21% who reported this in 2019.
The Value of Time
Unfortunately, most respondents (72%) agree their social media advertising creation and delivery involves manual processes that are often time-consuming. The good news? There are solutions available that can automatically create ads and videos from product images, automate targeting and budget allocation, and even select when and on what platform retailers should buy their ads.
That said, 81% of retail marketers wish to automate at least part of the creation and delivery of social advertisements in the New Year. This opens up more time for strategic work and creative testing - finding the right creatives and messaging helps in building trust and meaningful customer relationships.
Bridge the Gap
Just as importantly, automation solutions provide the time needed for social media advertising and creative teams to collaborate more effectively. While our research shows that creative remains the most powerful performance lever, many retail marketers still feel their advertising and creative teams do not collaborate effectively at each stage of the marketing process.
In 2021, more than half (56%) of respondents plan to bridge that gap and have their social media advertising and creative teams work together more closely. Even in a remote work environment, investing in technology that scales creative and improves ad performance can empower these teams to work more seamlessly.
Additional findings from our study:
- Most companies will increase social advertising spend on Facebook (76%), nearly half (44%) will increase spend on Twitter, and over one-third (38%) will increase spend on Instagram in 2021.
- At 54%, most organizations will increase their use of static creative assets, such as photos and images. Meanwhile, 44% will increase their use of dynamic creative assets, including animations and videos.
- Fewer respondents plan to expand their marketing teams (40%), manage social media advertising in-house (39%), change their marketing KPIs (33%), or invest in more robust social media advertising tools (30%) compared to 2020.
- Only 15% of organizations say they struggle with personalization. Most organizations plan to optimize ad delivery with first- or third- party data (56%) and integrate personalization into their campaign concepts (55%).
One thing this tells us is that adaptation is the name of the game. To be successful, retailers will need to continuously adapt their marketing to align with the ever-evolving COVID-19 economy and their consumers’ preferences. Even as in-person touchpoints return to our daily lives, social media will still play a significant role in how shoppers discover, follow and purchase from their favorite brands. For more tips on how retailers can better prepare social advertising strategies in 2021, download the complete Smartly.io research report here.