The Anatomy of a Retail Marketing Budget in 2020

Robert Rothschild Jan 24 2020 4 PM | 4 min read

Thanks to the continued evolution of technology, consumer brands are getting increasingly more skilled at serving ads that encourage us to read more, click here, download now, and add to cart.

Social media is one of the largest areas of growth in digital advertising -  a recent study predicts that social media would grow 20 percent in 2019 to account for 13 percent of overall global ad spend. So, where and how are marketers spending those digital ad budgets in 2020? At Smartly,io, we asked 100 U.S. retail marketing decision-makers in roles spanning brand marketing, e-Commerce and sales, creative and design, product and performance marketing, and digital advertising. Here’s what they told us:

A Tipping Point

The past decade put social advertising on the map for most retail marketers, and our findings indicate that social media isn’t just a “nice-to-have” for retail brands anymore. Instead, 52 percent of marketers we surveyed said they plan to spend more on social advertising than they did in 2019. What’s more, 50 percent are planning to spend at least half of their annual marketing budget on social media ads. With eMarketer estimating that U.S. digital ad spend would reach $129 billion by the end of 2019, that means retailers are planning to allocate a whopping $65 billion to social media ads to kick off the new decade. Say hello to the future of social advertising!

It’s easy to understand why retail brands are are so bullish about social ads. Capturing the attention of today’s consumer demands that advertisers tell stories that seamlessly blend with the organic content that their audience already consumes, and connecting with consumers on an emotional level. With social advertising, they can reach millions of people almost instantly using a variety of creative options (as they should), and are starting to incorporate more interactive features that allow users to easily window shop — and even make a purchase directly from an in-feed or story ad.

What's Your Story?

In terms of where retail marketers currently advertise, Twitter (75 percent) and Instagram (59 percent) fare well, but Facebook is far and away their favorite social advertising platform, with 96 percent adoption. In fact, 36 percent reported that Facebook is the platform they dedicate the most spend toward, and 41 percent say it also gives them the best return on ad spend (ROAS). 

Not coincidentally, Facebook and Instagram are also the platforms pushing the story format for both organic and paid content. Retail brands who shift spend to Story ads, diversify across social networks like Pinterest, and invest in technology to scale creative will allow their teams to work faster and smarter in the year to come — thereby generating more revenue and conversions in the process.

New Tool, Who Dis?

Although marketers understand all the social ads offer, and now see a positive return on their dollar, many admit that the process is often still too manual and inefficient to easily manage. This too often forces teams to spend too much time on the nuances of campaign building, management, and analysis — which can significantly reduce their ability to actually act on a campaign’s results. Fortunately, technology affords a solution to that challenge.

Our study results showed that 83 percent of retail marketers feel that there is room for improvement when it comes to automating parts of their ad creation and deployment, and 66 percent do not use any automation technology. To reduce these inefficiencies, 39 percent of retail marketing teams indicated that they will invest in more robust social advertising tools in 2020 — many of which include at least some form of automation (read more about our creative solutions here).

Social Is the Future

It’s 2020 — the start of the next decade of digital marketing. Retail brands now recognize the value that social advertising brings to their campaigns, and they are focused on understanding which levers to pull to generate even more engagement and revenue — everything from capturing user attention to investing in highly visual storytelling. 

Consumers are ready to lean in, too. Brand leaders who recognize this confluence of events and push to incorporate more social media ad spend into their marketing budgets today will likely see themselves transform into the leaders of tomorrow.

Additional findings from our social media advertising study include:

  • 29 percent of retail marketers noted Instagram is the social network where they spend the most on social ads
  • Nearly half (48 percent) feel their performance marketing and creative teams do not collaborate effectively in all stages of the marketing process  
  • 61 percent say that their creative production and ad delivery involves manual process that are often time-consuming 
  • 47 percent of retail marketers plan to increase their use of dynamic ads on social media
  • 39 percent predict they will manage social advertising in-house
  • 35 percent feel that their KPIs will change from how they were measured in 2019

Learn more by downloading our Social Advertising Trends for 2020 report. If you want some help along the way with your social advertising in 2020, contact your Customer Success Manager. If you’re not yet using, contact us to learn more how you can streamline your advertising efforts.


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Robert Rothschild

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