eMarketer Webinar: 7 Social Media Ad Trends for 2014

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N O V E M B E R 2 1, 2 0 1 3

Debra Aho WilliamsonPrincipal Analyst

7 Social Media Ad Trends for 2014

Sponsored by:


Agenda

� 2014: A Year of Social Acceptance

� Trend #1: The Video Opportunity

� Trend #2: Social = Mobile

� Trend #3: Native Expansion

� Trend #4: Social Ads Get More Programmatic

� Trend #5: Moving Beyond the Walled Garden

� Trend #6: Location Makes a Comeback

� Trend #7: New Venues, New Ad Opportunities

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2014 will be a year of ‘social acceptance’

More US marketers are committing budget to social media advertising

% of US marketers buying Promoted Tweets

Aug. 2013: 32%

Sept. 2012: 26%

% of US marketers buying adson Facebook

Sept. 2013: 74%

Jan. 2013: 62%

July 2012: 55%


Advertisers are optimistic about spending increases

“Media wants to be where the audience is, and I expect to see more paid-media growth as [social] audiences continue to grow.” —Nick Tran, head of social media at Taco Bell


Social media advertising is moving from a nice-to-have to a necessity

“Social advertising is almost mission-critical now.” —Chris Bowler, vice president of social media at Razorfish


The percentage of US companies using social media for marketing is very high—and still rising


Nearly all US social media marketers are using Facebook; Twitter use is gaining



eMarketer forecasts US social network ad spending will rise 37% in 2013 and 27% in 2014


What’s driving the increases? Efforts to make social advertising more effective

� Data partnerships: Data from companies such as Datalogix, Axciom and Epsilon helps Facebook advertisers determine whether someone who saw an ad eventually made a purchase. Twitter also has a partnership with Datalogix.

� Objective-based advertising: Marketers choose one of eight objectives before buying advertising on Facebook, and get recommendations for which types of ads to use to meet those objectives.

� Less focus on fans: After touting fan acquisition as a goal in 2012, social media companies are now speaking in terms advertisers know: sales, conversions and results.


The bottom line: It’s not only about being ‘social’ …

“That’s where the audience is. It’s about scale.” —Ritu Trivedi, managing director at Starcom MediaVest



Trend No. 1: The Video Opportunity

Image courtesy of digitalart / FreeDigitalPhotos.net


Facebook will flex its muscle with video ads

$1 million to $2.4 million: Estimated daily cost for branding-oriented video ads. (Reuters)

$1.31 billion: Projected 2014 video ad revenue (Cowen & Company)

Potential: Could unlock more premium dollars from brand advertisers and shift TV ad budgets.

Challenges: Infuse video ads with social/shareable features; will autoplay work?


Twitter cozies up to TV

Twitter Amplify: Links advertisers

with real-time video

Metrics providers

Short-form video


Instagram ad test will show the demand for mobile native video ads

Slow rollout: So far, advertisers are focused on testing photo ads first.

Branding opportunities: 71% of Interbrand 100 advertisers use Instagram for marketing, up from 40% in October 2012 (Simply Measured, November 2013).

Challenge: User reaction to Instagram ads has been mixed.

Potential: Pent-up demand for Facebook video advertising could spill over to Instagram.


Trend No. 2: Social = Mobile

Social media will continue to play a leading role in defining what mobile advertising looks like

“Social is going to continue to drive mobile usage and mobile spend.”

— Scott Symonds, AKQA Media

“As we’re thinking about social, we’re not delineating it from mobile; our assumption is that if it’s social it probably also is mobile.” — Jennifer Kasper, Macy’s


Facebook and Twitter are seeing strong revenues from mobile

� 49%: Percentage of Facebook’s Q3 2013 ad revenue that came from mobile. (Facebook, October 2013)

� Over 70%: Percentage of Twitter’s Q3 2013 ad revenue that came from mobile. (Twitter, October 2013)

� 19%: Percentage of the US mobile ad market that Facebook and Twitter will account for in 2014. (eMarketer, August 2013)

� 40%: Percentage of the US mobile display ad market that Facebook and Twitter will account for in 2014. (eMarketer, August 2013)



The majority of social media use is happening via smartphone

Source: RBC Capital Markets & Advertising Age, September 2013


What to watch for in mobile social advertising

Demand for mobile ads

Is mobile social ad spending growth driven by demand for mobile, or simply a reallocation of dollars from the desktop?

Overload

Will the number of ads in the feed top out lower than the social media companies expected?

New ad products

How will social companies evolve ads to take advantageof the uniquely mobile environment?


Trend No. 3: Native Expansion

Social media companies proved in 2013 that native advertising can work.

In 2014, the challenge will be to scale it—without irritating consumers.


Ad executives are enthusiastic but concerned about native advertising

� Industry executives believe news feed advertising delivers results. But they worry that there will be backlash if too many ads crowd the feed.

� They are also concerned about the amount of time and effort it takes to produce native advertising

� Native-ad ad networks could provide a solution.



US mobile marketers consider native advertising an important development


A cautionary note on native ads:

“As we think about the future, we do not expect to significantly increase ads as a percentage of News

Feed stories beyond where we were at the end of Q3.”— David Ebersman, Facebook’s chief financial officer,

during the company’s Q3 2013 earnings conference call


Trend No. 4: Social Ads Get More Programmatic

The intersection of real-time marketing and programmatic advertising will play out more fully in 2014.

“Total social media advertising is expected to increase 35% in 2013, 35% in 2014 and 32% in 2015. We are attributing the growth in 2014 and 2015 to the rise in programmatic social buying that will begin to take hold.”


Programmatic techniques will help make real-time marketing easier to do

� Faster social ad placement: More tools will be available to quickly place ads or tweak campaigns.

� External triggers: Data on pricing, inventory, weather and more will inform ad delivery in social media, enabling advertisers to make the most of fast-changing scenarios.

� More-dynamic creative: Technology will provide new ways to change up ad creative to meet targeting needs and cut the time it takes to develop real-time content and advertising.



Trend No. 5: No More Walled Gardens

In 2014, advertisers will finally get what they’ve been hoping for: the ability to use rich social media user data to target consumers across digital channels.

� Twitter: Its acquisition of mobile ad network/technology company MoPub gives Twitter a new revenue stream and a way to test mobile native advertising.

� Facebook: It has restarted testing of a mobile ad network; although there are many privacy hurdles to cross, advertisers are very interested in using Facebook data to target consumers outside of Facebook.



MoPub’s network: Small but growing

Sample Customers:

Net Revenue 2012: $2.7 million1H 2013: $6.5 million


Facebook Log-in: One way to track users (and show ads) outside of Facebook


Advertisers recognize the value of social data for targeting

“Twitter has a huge amount of insights around what people are doing and expressing and sharing. The ability to take that knowledge and put it outside its walls is powerful.”—Dave Marsey, executive VP and managing director at

Digitas San Francisco


Trend No. 6: Location Makes a Comeback


Data indicates increased willingness to share location via mobile

of US adult smartphone owners use their phone to get information or directions based on their location, up from 55% in 2011

of US adult social media users have at least one account set up to tag their location, up from 14% in 2011

Source: Pew Internet & American Life Project, September 2013


Mobile app users worldwide appreciate location-based mobile marketing


Geolocation capabilities will improve

If I tweet or Facebook this shot, I might be a good target for hiking-gear ads.


Trend No. 7: New Venues, New Ad Opportunities

Facebook, Twitter and LinkedIn dominate, but there is room for more



Instagram: Think ‘Vogue’ for socialmedia


Pinterest: Boosting socialcommerce

Promoted Pins test is aimed at marketers and retailers with ecommerce goals


Mobile messaging services: Growing fast and could see ads in 2014

Snapchat is used by 9% of US mobile

phone users—many of them teens and young adults (Pew Research Center, 2013)

LINE has 280 million users

worldwide, and growing fast in South America, Turkey and Italy (LINE Corp. Q3 2013

earnings report)

WeChat Has 272 million users,

predominantly in China (Tencent Q3 2013

earnings report)


Conclusions

� More marketers are using social media advertising, leading to increases in total spending.

� Efforts to prove the effectiveness of social ads have paid dividends.

� Social will be a critical tool to reach mobile users in 2014.

� Efforts to scale native ads could be met with a backlash.

� More social ads will be bought programmatically.



Conclusions

� Facebook and Twitter will start selling ads outside their walls, providing new ways to use social data for targeting.

� Geolocation capabilities in social media will get better, leading to more real-time marketing opportunities.

� New ad venues such as Pinterest and Instagram will vie for marketers’ attention.


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Q&A Session

7 Social Media Ad Trends for 2014

Sponsored by:

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You will receive an email tomorrow with a link to

view the deck and webinar recording.

Debra Aho Williamson

Learn more about digital marketing with an eMarketer corporate subscription

Around 200 eMarketer reports are published each year. Here are some recent reports you may be interested in:

� Social Media Advertising: Seven Trends for 2014

� Social TV: Marketing to Viewers in Real Time

� Advertising in the Moment: Real-Time Strategies forPaid Social Media

� Worldwide Social Network Ad Spending Forecast: Robust Growth Set to Continue Through 2014

� Native Advertising: An Emerging Consensus for a New Kind of Ad

To learn more: www.emarketer.com/products

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