Brief:
- Snapchat and Instagram increased ad sales 73% and 55%, respectively, in Q3 2017 as investments in offline features and video content helped to attract more marketing dollars, data marketing firm 4C found in a new study. Social media sites like Facebook, Instagram, Twitter, LinkedIn, Pinterest and Snapchat showed a 31% increase on average in paid media spending that quarter.
- Localization services, such as Snapchat's Snap Map and Facebook's beta test of tracking store visits, helped to drive growth on the social media platforms, according to the study. Video content also boosted media spending on Facebook Watch, Snapchat Shows and Twitter's 24/7 live-streaming programming.
- Ad spend on image-sharing platform Pinterest grew 26% in the quarter and 33% from a year earlier as marketers prepared for the upcoming holiday shopping season. In the study, 4C analyzed $250 million in media spending from more than 1,000 individual brands.
Insight:
4C's study on social media ad spend shows the growing importance of video and localization to lure marketing dollars to the different platforms. While Facebook's ad spend grew 27%, helped by its Store Visits beta that aims to track changes in consumers' offline behavior in response to marketing messages they see on the social network, Snapchat also added measurement capability for store visits using Placed's tracking capability, helping retail brands understand how Snap ads drive sales results.
Social media companies also are boosting ad spending by adding novel features that keep users engaged with their mobile platforms. Facebook-owned Instagram added a Stories feature that lets users string together several images and videos into a single post in a manner similar to Snapchat. The feature has grown to more than 250 million users since its August 2016 launch, according to social influencer tracker Mediakix, and has also shown a migration of influencers leaving Snapchat for Instagram. This, along with Instagram Stories' 220% ad growth from a year earlier, signals that the platform continues to lure media personalities and engaged audiences by integrating innovative features into its platform.
The major push toward video content is also driving ad growth for social media companies overall. Facebook introduced its Watch platform for video content in August and reportedly plans to spend as much as $1 billion on developing original programming for the service. Snapchat Shows have a growing roster of professional media companies including ABC, CBS and NBCUniversal producing original shows, and Twitter added 24-hour live-streaming of programming in addition to experimenting with raising its character limit on tweets. These tech updates to the platforms likely contributed to boosted ad dollars across the board in the quarter, with Twitter's ad spend up 26%, per the 4C study.
