Over half of retailers will increase 2020 social media ad budgets, study says

Brief:

More than half (52%) of retail marketers this year plan to boost their spending on paid social advertising, per survey results that Smartly.io, a social media advertising automation platform, shared with sister publication Mobile Marketer. The survey also found that 50% of retailers will spend at least half of their annual marketing budget on social media ads.
Almost all (96%) of survey respondents plan to increase their spending on Facebook in particular, making the social network the biggest priority for these marketing executives. Fifty-six percent plan to buy more media on Twitter, while 22% will increase ad spending on Facebook-owned Instagram, the survey found.
More than a third (36%) of respondents said they spend most of their ad budgets on Facebook, while 41% said the social network has the best return on ad spend. Twenty-nine percent of retail marketers chose Instagram as their top social network. The study was conducted by eTail, which surveyed 100 digital advertising executives at companies with at least $200 million in annual revenue.

Insight:

Smartly.io's survey results come as social media companies like Facebook show no sign of a reduction in their ability to attract ad dollars following years of healthy growth. Facebook already is the top choice for retailers, with 96% of survey respondents saying they advertise on the social network, followed by Twitter (75%) and Instagram (59%). Facebook in recent years has made efforts to appeal to retailers by adding more e-commerce features to its main social hub and to its stable of apps including Instagram, WhatsApp and Messenger.

Smartly.io's research also indicates several areas of concern with paid social advertising. Eighty-three percent of respondents said there's room for improvement in automating ad creation and deployment, and 66% don't use any automation technology. Almost half (48%) of executives said their performance marketing and creative teams don't collaborate effectively in all stages of the marketing process, while 61% said their creative production and ad delivery involves manual labor that's often time-consuming and inefficient.

The findings mirror a December report by the Advertising Research Foundation, which found a disconnect in how researchers and creatives or strategists approach data and technology, preventing creative efforts from reaching their full potential. A lack of common standards in approach makes it difficult for people across marketing and creative teams to communicate and work toward a shared brand vision. If creatives speak one language and researchers speak another, a brand's business goals can be thwarted or misaligned because of miscommunication and different interpretations.

Thirty-nine percent of executives said they expect to manage social advertising in-house. The survey also found that 47% of retail marketers plan to increase their use of dynamic ads on social media, and 35% expect key performance indicators (KPIs) to change from last year.