Marketers Ramp Up Social Spending As ROI Prospects Improve.
Bullishness on social media and TV offers another sign that the ad market has started to recover.
Marketers are turning the taps back on for social media, with 51% of media decision-makers on the brand and agency side of the business planning to increase their investments in the category this year, according to June survey data that Advertiser Perceptions shared with Marketing Dive.
That figure contrasts with findings from April, when 44% of decision-makers said they were hiking their social spending in 2023. The upshot is that social is providing a better return on investment (ROI) versus a year ago, Advertiser Perceptions said.
Connected TV (CTV) remained the top category tracked by the firm, with 54% of marketers and agencies aiming to ramp up their spending on this front. Breaking the findings out further, brand marketers preferred social media over CTV and linear TV, contrasting with their agency counterparts.
July’s run of tech earnings indicated that the digital ad market was starting to escape a rut driven by challenging macroeconomic conditions and shifting privacy mandates over the past year. The latest data from Advertiser Perceptions reinforces the sense that the industry is in recovery mode, with a notable shift in sentiment around social media spending since the spring. That said, the winners and losers of the channel could be made more concrete as several platforms continue to grapple with disruption.
The researcher’s findings were derived from a June survey of over 300 executives from both brands and agencies who are in charge of sizable media budgets, having spent over $1 million on ads in the past month. The report also highlights differences in thinking between brands and agencies.
While brand marketers express a preference for social over CTV, agencies are “significantly more likely” to ramp up their CTV and linear TV investments at 61% and 36% of those surveyed, respectively. Agencies have typically acted as key intermediaries in the types of upfront negotiations that drive the TV business and are an increasingly important piece of brokering advertising deals with streamers.
Most advertisers that culled the number of CTV partners they work with due to belt-tightening over the past year expect to re-engage “at least some” of those partners, Advertiser Perceptions said, without offering specifics. On the flip side, one in four social media advertisers that trimmed their channel partners do not expect to pick back up those old relationships.
The latter insight suggests marketers are getting more selective about where and who they advertise with on social. X, formerly known as Twitter, has experienced a mass advertiser exodus since getting acquired by Elon Musk last year. The mercurial entrepreneur’s ploys at winning back Madison Avenue’s favor, including hiring a new CEO with deep connections to adland, have not delivered the expected outcomes so far. Snap has also struggled to gin up revenue in a down market, while newcomer apps like BeReal that received a pandemic boost have seen engagement stagnate.
Meanwhile, entrenched heavyweights like Meta Platforms have seen growth return in recent months. Meta has attributed a turnaround in its advertising performance to bets on artificial intelligence after years of struggling with policy changes implemented by Apple that make targeting and tracking mobile campaigns more difficult.
Among the media decision-makers surveyed by Advertiser Perceptions, one in three said delivering on the ability to reach their target audience was the most important consideration in selecting a media partner. This factor was even higher among the brand marketer breakout, with 65% believing it to be decisive.