Social Media Advertising by Retailers to Hit Nearly $65 Billion

By Marianne Wilson
Source: chainstoreage.com, January 2020

Social media advertising is increasingly a primary focus for retail brands — and one platform dominates.

Fifty-percent of retail advertisers are planning to spend at least half of their annual marketing budget in 2020 on social media ads, according to a survey commissioned by Smartly.io and conducted by WBR Insights, research arm of the eTail event series. Smartly’s data indicates that retail marketers plan to allocate nearly $65 billion to social media ads in 2020.

In terms of where retail marketers currently advertise, Facebook is far and away their favorite social advertising platform, with 96% adoption, followed by Twitter (75%) and Instagram (59%).

Thirty-six percent reported that Facebook is the platform they dedicate the most spend toward, and 41% said it also gives them the best return on ad spend (ROAS).

Although marketers see a positive return on their dollar, many said that the process is often still too manual and inefficient to easily manage. According to the survey, 83% feel that there is room for improvement when it comes to automating parts of their ad creation and deployment, and 66% do not use any automation technology. To reduce these inefficiencies, 39% of retail marketing teams indicated that they will invest in more robust social advertising tools in 2020.

Additional findings from the study are below.

•     When compared to 2019, 96% of respondents plan to bump up their spending on Facebook this year, while Twitter (56%) and Instagram (22%) will also see increases.

•    Nearly half (48%) of retail marketers feel their performance marketing and creative teams do not collaborate effectively in all stages of the marketing process

•    Forty-seven percent plan to increase their use of dynamic ads on social media

•    Thiry-nine percent predict they will manage social advertising in-house

“The past decade put social advertising on the map for most retail marketers, and our findings indicate that it will only continue to grow in 2020,” said Robert Rothschild, VP and global head of marketing at Smartly.io. “Capturing the attention of today’s consumer demands that advertisers tell stories that seamlessly blend with the organic content that their audience already consumes. Shifting spend to story ads, diversifying across social networks like Pinterest, bridging the gap between performance and creative teams, and investing in technology to scale creative and deliver incrementality in ad performance are ideal solutions that will allow teams to work faster and smarter in the year to come.”