THE STATE OF FACEBOOK & INSTAGRAM ADVERTISING 2019 - StitcherAds
Page content transcription
If your browser does not render page correctly, please read the page content below
THE STATE OF FACEBOOK & INSTAGR AM ADVERTISING 2019
IN T RO D U CT I O N StitcherAds and Go-To-Market Pros conducted 1:1 interviews with dozens of retail marketing leaders across North America to determine the challenges and opportunities they are facing in the current Facebook & Instagram advertising landscape. S O M E O F T H E R E TA I L E R S I N T E R V I E W E D I N T H I S S T U DY: Facebook and Instagram are raising the digital advertising stakes for the retail industry. The two platforms will generate $67.2 billion in ad revenue this year, according to eMarketer projections. That figure will account for 20.5% of global digital ad sales – cementing Facebook's place as the second-leading digital ad platform in the world. StitcherAds | The State of Facebook & Instagram Advertising 2019 2
IN T RO D U CT I O N Marketers are increasingly gaining the ability to bridge the gap between consumer discovery and action. As Facebook continues to launch retail-specific advertising products, marketers are increasingly gaining the ability to bridge the gap between consumer discovery and action. Marketers who use the platform to drive sales are getting more innovative in their strategies, but many still face challenges from a scaling perspective. From creative development to adopting omnichannel capabilities to measuring ad effectiveness, and of course, protecting consumer data — the industry is struggling to align with consumer expectations. This report will outline the current state of Facebook and Instagram advertising as retailers see it, and what the industry can expect in the year ahead. StitcherAds | The State of Facebook & Instagram Advertising 2019 3
CRE ATIVE Video is in high demand, but difficult to scale. The consumers of today are constantly bombarded with marketing messages — making it tougher than ever for retailers to resonate with audiences.
C R E AT I V E 17% Across the board, retailers have found that being overly promotional does not bode well for engagement. Consumers reported in a 2018 Sprout Social study that they are more inclined to engage with entertaining ads, even over ads that offer discounts. "When we do something fun or playful, we see about a 35% increase in click-through rates than when we post something promoting a sale-type offering,” said one digital marketing leader. Video also plays a significant role in driving engagement, and nearly every retail marketer interviewed for this report would like to publish more of it in 2019. Data Brands using both static from Facebook shows that brands using both static ads and video ads saw ads and video ads saw a 17% higher rate of conversions compared to brands only using still images in their ads. a 17% higher rate of conversions compared to brands only using still images in their ads "When we do something fun or playful, we see about a 35% increase in click-through rates than when we post something promoting a sale-type offering." StitcherAds | The State of Facebook & Instagram Advertising 2019 5
C R E AT I V E However, most marketers primarily still rely on static images. “[Our ads] are 95% static,” said one marketing “We're not where we want manager. “We haven’t really dealt a lot with video.” to be with video, but it's While Facebook has taken the lead as the top social definitely something we're video ad platform in the U.S., video production remains a major challenge for many brands. “We're not where working on. With tens of we want to be with video, but it's definitely something we're working on, said a senior social media manager thousands of products, it is at a top retailer. “With tens of thousands of products, it a huge challenge." is a huge challenge." “Our ads are 95% static. We haven’t really dealt a lot with video.” StitcherAds | The State of Facebook & Instagram Advertising 2019 6
C R E AT I V E 78% As Facebook does not yet offer a native solution for scaling video across dynamic ads, many retailers are relying on third-party agencies to create workarounds. Before scaling further into video, one director of marketing said she would like to gain a stronger footing with influencer marketing. This area of creative is presenting itself as both a challenge and an opportunity. A marketing leader in the beauty sector said that while it’s difficult to track the exact return on investment on of marketers said that influencer campaigns, evidence shows that this type of influencer content performs creative performs well. The industry agrees. In a 2018 Linqia study, some 78% of marketers said that influencer the same or better as content performs the same or better as brand-created brand-created content content. StitcherAds | The State of Facebook & Instagram Advertising 2019 7
C R E AT I V E LOOK ING Budgets are shifting toward Instagram and more engaging AHE A D formats, like AR. For retailers using Facebook to drive sales, the carousel ad format continues 55% to be a favorite. But, looking ahead to 2019, the industry will see retailers increasingly shifting spend from the Facebook News Feed to Instagram. Data from Socialbakers shows that while advertisers reduced ad spend on Facebook in 2018, they more than quadrupled their budgets for Instagram Stories. “There’s more opportunity on the Instagram side for us right now just because that’s where we look to target younger customers,” said a marketing director for a fashion brand. Another marketer spoke about Instagram’s unique value prop. “[It allows us to] be a bit more visual about how we tell stories.” Adoption of Instagram Stories will catapult in 2019. A marketer specifically of advertisers are called out the opportunity to leverage the polling feature within Instagram already using AR Stories. “You can use that feature to gather data to help you build out products, 35% assortments, and marketing campaigns in the future,” she said. As advertisers shift spend away from the Facebook News Feed, the platform is testing new placements to determine if they would be beneficial to advertisers. Facebook announced in December 2018 that it is testing ads in its search results, which we could possibly see take off this year. Finally, with Facebook’s launch of augmented reality ads in 2018, we can expect to see more retailers utilizing this technology in the coming year. More than half—55%—of advertisers said in a 2018 Boston Consulting Group survey that of advertisers plan to they were already using AR. An additional 35% said they planned to integrate this technology into their marketing strategies in the future. integrate AR into future marketing StitcherAds | The State of Facebook & Instagram Advertising 2019 8
TARGE TING Driving customers in-store is a priority. Geo-targeting is playing a pivotal role in retailers’ Facebook and Instagram advertising strategies. More specifically, the platform’s radius targeting feature has enabled retailers to get innovative in how they drive consumers into their brick- and-mortar locations.
TA RG E T IN G One marketing leader outlined the effectiveness of running geo- targeted ads of certain products on days people were most likely to buy them. Another marketer said her team uses radius targeting when their direct competitor is opening new stores in a market to drive consumers back to their nearby locations. Overall, geo- targeting works well for customer acquisition, they said. “We’ve been able to drive new customers into [stores], and it’s been very "The prospecting that successful.” we do is hit or miss … But some retailers are finding that prospecting for new customers is not as valuable as retargeting existing audiences. “The low- but dynamic product hanging fruit is obviously retargeting, so we want to cap out retargeting ads with there,” said a paid media specialist for an apparel brand. A digital marketing director for another clothing company agreed: “The specific products work [prospecting] that we do is hit or miss … but dynamic product really well.” [retargeting] ads with specific products work really well.” This is a missed opportunity for the majority of the market. Only 43% of U.S. digital marketers are investing in retargeting, according to a 2018 survey conducted by The Manifest. 43% of U.S. digital marketers are investing in retargeting StitcherAds | The State of Facebook & Instagram Advertising 2019 10
TA RG E T IN G LOOK ING Retailers will leverage omnichannel targeting with greater detail than AHE A D before. As retail marketers strive to drive people in-store, Facebook’s Store Sales Optimization is slated to have a bigger impact in 2019. With this offering, digital marketers can specifically target shoppers who "Not only do I want to target are more inclined to shop in-store. This segment of a customer who shops at a consumers was previously overlooked in the digital advertising space, which was a missed opportunity. competitor, but I also want Some 65% of U.S. consumers stated in a 2018 CGS survey they will research a product online before to target a customer who buying it in a store. bought a specific outfit Those who are in the multi-brand retail space are while shopping at that hoping they find better ways to retarget consumers who are shopping with competitors. “Where we’re competitor.” trying to go next is getting really specific with SKU- level data,” said a senior director of marketing for a fashion retailer. “Not only do I want to target a customer who shops at a competitor, but I also want to target a customer who bought a specific outfit while shopping at that competitor.” StitcherAds | The State of Facebook & Instagram Advertising 2019 11
OMNICHANNEL Centralized, seamless experiences are crucial. With 90% of sales still taking place offline, there’s a massive need for digital marketers to measure and optimize on in- store sales. But, implementation of omnichannel strategies is lagging. The very definition of the word presents an issue.
O M NI C H A N N E L When asked to define “omnichannel,” the marketing leaders interviewed for this report provided different answers. “People’s understanding of omnichannel varies,” said one marketing manager for a large retailer. “That’s definitely an issue.” Here’s how we define omnichannel at StitcherAds: om•ni•chan•nel a strategy that comprises unifying a retailer’s data to create a centralized, seamless experience for the consumer – regardless of where they choose to shop and/or transact. Across the board, the retail marketers interviewed agreed that consumers who shop across channels spend more than those who only use one channel. “Customers that shop both online and in-store are significantly more valuable in how much they spend each year,” “Customers that shop said one senior marketing manager. A study conducted by Medallia and researchers at Rice University supports these insights. They both online and in- discovered that customers who use 4+ channels spend 9% more in- store are significantly store, on average, compared to shoppers who only use one channel. more valuable in how Retailers are putting resources into developing an omnichannel strategy, but few are doing it well. Some 91% of retailers said in a much they spend each Brightpearl and Multichannel Merchant survey that they have an year." omnichannel strategy or planned to invest in omnichannel. However, only 8% reported they have “mastered” omnichannel. StitcherAds | The State of Facebook & Instagram Advertising 2019 13
O M NI C H A N N E L 91% More innovative retailers are building dedicated omnichannel teams to lead the way. “We recently onboarded a new director on our team to lead omnichannel practices,” said an ecommerce director for a large retailer. “However we talk about a product, that same experience should permeate the store, the site, the mobile app, and the Amazon storefront as of advertisers have or are well. We’re not thinking channel or platform specific – but we are customer focused.” planning to invest in an omnichannel strategy The marketers that aren’t quite there yet are facing technological and internal roadblocks. Nearly one- quarter of retailers said they do not have the right technology to execute their omnichannel strategy. 8% Others are challenged with breaking down silos. “A lot of it has to do with people who have long been tenured at the company feeling that the current strategy works, so why change things?” said one marketing manager. “The new digital team is coming in and saying, ‘Well, we know you can try X, Y, Z tactic and we believe this will work.’ But, there’s a lot of push and pull.” "It’s a major problem," said one retailer who is struggling to get onboarded with online-to-offline measurement. but only 8% of advertisers With more than 90% of his sales occurring in-store, have mastered omnichannel “that’s billions of dollars we need to figure out that we don’t have great insight into.” StitcherAds | The State of Facebook & Instagram Advertising 2019 14
O M NI C H A N N E L O M N I C H A N N E L O N FAC E B O O K International retailer Reiss experienced Most of the large retailers who advertise on Facebook are familiar with the platform’s Offline Conversions, Store Sales Optimization, and local inventory a 76% increase in ad offerings. However, getting onboarded with these tools presents yet Facebook-influenced another challenge. Retailers raised issues with getting their in-store data “clean,” secure, and consistent with Facebook’s best practices. store sales as a result Retailers that are lagging in the online-to-offline space are looking to more of using personalized innovative brands to provide use cases. A senior marketing director for omnichannel a fashion brand said those case studies are lacking. "We want to see case studies on how brands are using this data to run better ads; how once they got campaigns. the offline conversion data, they were able to pivot their marketing to do X, Y, Z and they saw a lift in performance." Those who have cleared those roadblocks and are connecting in-store sales to digital ads are indeed pivoting their strategies and seeing lifts in performance. In 2018, global retailer Reiss partnered with StitcherAds to build personalized, omnichannel Facebook and Instagram campaigns. With radius targeting, new creative that employed a “Get Directions” CTA button, and audiences of in-store and online shoppers — the brand experienced a 76% increase in Facebook-influenced store sales. This campaign unearthed valuable insights that informed Reiss’s future marketing decisions. For example, the team learned that carousel ads that show products first perform better than carousel ads that feature a branded static card at the onset. StitcherAds | The State of Facebook & Instagram Advertising 2019 15
O M NI C H A N N E L Retailers see the need for LOOK ING omnichannel experts, and AHE A D will build out these roles. Digital marketing and merchandising teams are tasked with separate, distinct goals — and business leaders are beginning to realize these silos will do nothing to bridge the online-to-offline gap. In 2019, the industry will continue to see dedicated roles and teams built out for omnichannel marketing initiatives. StitcherAds | The State of Facebook & Instagram Advertising 2019 16
ME ASUREMENT Lack of effective reporting is impacting spend. Ah, the age-old social media dilemma: How can retailers effectively measure the return on investment on their Facebook and Instagram advertising efforts? Measuring ROI is the top concern for 55% of social marketers, according to the Sprout Social Index 2018.
ME ASUREMENT 6 For the 62% of B2C marketers that use social media to drive sales – attributing sales to campaigns can be a convoluted process. Consumers’ non-linear path to purchase is not making it easy. A senior marketer for a beauty retailer said that the majority of the brand’s sales have at least six touchpoints – making it difficult to attribute revenue back to the appropriate channel. For online measurement, many of the retailers interviewed said they are still relying on last-click attribution – despite it not being the most sophisticated method. “Right now that’s what we use only because that gives us a fair read across all channels when we think about marketing,” said one marketer. “But, we understand that could [impact us differently] from a future standpoint.” Online-to-offline measurement presents even more A senior marketer for of a challenge. “It’s still very much in its infancy,” said one home improvement retailer. “So, we don’t report a beauty retailer said out on that data. It’s a ‘nice to have.’ We’re still in a that the majority of the learning phase, but we are using the data to make more informed decisions about our advertising.” For brand’s sales have at this reason, retailers are defaulting to online-only measurement, said another marketer interviewed for least six touchpoints this report. – making it difficult to attribute revenue back to the appropriate channel. StitcherAds | The State of Facebook & Instagram Advertising 2019 18
ME ASUREMENT The lack of product-level insights on Facebook and Instagram campaigns is also an issue for multi-brand “We have difficulty retailers. The inability to report specifics back to breaking down the brands impacts the influx of co-op dollars. “We have difficulty breaking down the performance for each performance for brand,” said a senior marketer for a beauty brand. “That’s a limitation with Facebook. We don’t get SKU- each brand. That’s level analysis back, so we have to dig on our side to a limitation with understand the breakdown for each brand.” Facebook. We don’t The disparity between Facebook reporting and third- party analytics tools continues to be a problem as well. get SKU-level analysis “On our measurement tools, the sales numbers look back, so we have pretty low. But, on Facebook they look much higher,” said one retail marketer. to dig on our side to understand the breakdown for each brand.” The disparity between Facebook reporting and third-party analytics tools continues to be a problem as well. “On our measurement tools, the sales numbers look pretty low. But, on Facebook they look much higher,” said one retail marketer. StitcherAds | The State of Facebook & Instagram Advertising 2019 19
ME ASUREMENT LOOK ING Savvy retailers will invest in incrementality testing and align AHE A D their budgets accordingly. Currently, retailers are facing challenges proving incremental lift as a result of their Facebook and Instagram ads. And in order to shift budget from other channels to Facebook, this is imperative. “We need to prove that Facebook is truly incremental … and that those dollars “We need to prove that could be spent on another channel will have a greater return on social,” said one marketer. that Facebook is truly incremental … and However, with Facebook’s introduction of new products for measurement, e.g. Test & Learn, marketers will gain the that those dollars that ability to run their own tests easily and at low cost. could be spent on In 2019, we will see retailers leveraging these tools to measure the impact of their campaigns and incorporate another channel will omnichannel results into their reporting. have a greater return With growing adoption of Facebook Offline Conversions, on social.” omnichannel ROAS will become an important industry-wide KPI. Omnichannel ROAS is calculated with the following formula: (Online Revenue + In-Store Revenue) / Ad Spend. Attributing digital marketing dollars to online and in-store sales will result in more informed ad spend. StitcherAds | The State of Facebook & Instagram Advertising 2019 20
RESOURCES Silos are a barrier to success. The majority of companies in North America (75%) execute their social media strategies internally through one team/department. However, marketers are beginning to understand that their social media teams cannot achieve success in silos.
RESOURCES Many of the retailers interviewed by StitcherAds said they lean on agencies to help execute Facebook & Instagram campaigns. Those relationships can be “Reporting came from both beneficial and complicated. our agency, and it was While the brand marketers take recommendations into account, they like to ensure agency really disconnected. the Facebook team is involved too. “Many times we’ll [Sometimes] data is have direct conversations with our platform partners specifically and then we’ll have a broader collaborative hidden by the agency call with the agency and Facebook to make sure we because it might not are up to date on what else is out there.” show the best results. Agency challenges tend to come from a reporting/ measurement perspective. “Reporting came from But, it’s information we our agency, and it was really disconnected,” said one social marketing leader. An ecommerce director at need to see.” a different company agreed: “[Sometimes] data is hidden by the agency because it might not show the best results. But, it’s information we need to see.” StitcherAds | The State of Facebook & Instagram Advertising 2019 22
RESOURCES LOOK ING Brands will increasingly shift AHE A D marketing capabilities in-house. As brand marketers continue to face challenges 52% with their agencies, a level of distrust exists. In a 2018 ID Comms study, 40% of advertisers rated their client-agency trust level as low. Some 38% of agency respondents said the same. As a result, we will see retailers shift more of their marketing capabilities in-house. More than half of CMOs—52%—said they would take this approach over the next 2-3 years, according to a 2018 Dentsu Aegis survey. of CMOs said they would shift marketing capabilities in-house over the next 2-3 years StitcherAds | The State of Facebook & Instagram Advertising 2019 23
SECURIT Y Concerns burden consumers and marketers alike. It’s no secret that security has been a hot topic spanning industries around the globe.
S EC U RI T Y An August 2018 study from Selligent Marketing Cloud revealed that 75% of consumers are concerned with a brand’s ability to track their behavior – even within a The No. 1 risk brand’s website and apps. Meantime, a data breach/ misuse of consumer data is the No. 1 risk that worries that worries marketing executives. Nearly one-third of CMOs cited this as their top concern in a July 2018 study from marketing Dentsu Aegis Network. executives is “People are so wary,” said a retail leader. “Our customers a breach of don’t want to give up information and our IT security team doesn’t want to collect it. We need to get a better customer data. feel for our customer, and be on top of our game as far as keeping that information private.” “Our customers don’t want to give up information and our IT security team doesn’t want to collect it. StitcherAds | The State of Facebook & Instagram Advertising 2019 25
S EC U RI T Y LOOK ING Retail marketers will work closely with IT teams to prevent misuses AHE A D of customer data. To prevent abuse on its platform, Facebook rolled out new transparency initiatives for ads in 2018. The retail marketers interviewed for this report stated that they will continue to work closely with their IT teams to ensure customer data is secure. StitcherAds | The State of Facebook & Instagram Advertising 2019 26
TA K E AWAYS C R E AT I V E Budgets are shifting from the Facebook News Feed to more visual and engaging formats, like Instagram Stories and augmented reality. Marketers see a greater opportunity to target younger consumers with these formats. TA R G E T I N G With the prevalence of ecommerce, digital marketers previously overlooked consumers who prefer the in-store experience. As retailers place more of a focus on omnichannel, Facebook's Store Sales Optimization is forecasted to have a bigger impact in 2019. OMNICHANNEL Silos are a barrier to success in the omnichannel space. In the coming year, the retail industry will see dedicated roles and teams built out to lead omnichannel initiatives. ME ASUREMENT Marketers must prove incremental lift on Facebook and Instagram in order to shift more budget onto the platforms. Facebook’s recent introduction of new measurement products (e.g. Test & Learn) will give marketers the ability to run their own tests easily and at low cost. RESOURCES Brands continue to face challenges with their agencies. As a result, advertisers will take more of their marketing capabilities in-house. S EC U R I T Y Breaches of customer data are the top concern for marketing executives. In the year ahead, they will keep working hand-in-hand with their IT teams to ensure customer data is secure. StitcherAds | The State of Facebook & Instagram Advertising 2019 27
Innovation is more crucial than ever. As the last couple of years have been scattered with high-profile retail closures, senior marketing executives are seeing the outlook as “innovate or die.” Facebook and Instagram continue to make it easier for brands to do just that. With retail-specific creative, targeting, and measurement offerings available, marketers have the ability to align with the wants and needs of today’s consumer. In conjunction with adopting these features, organizations must break down their internal silos and adopt secure data practices. Those who tap into these innovative practices will significantly outperform the competition in 2019. StitcherAds | The State of Facebook & Instagram Advertising 2019 28
SOURCES “Augmented Reality: Is the Camera the Next Big Thing in Advertising?” Boston Consulting Group, https://www.bcg.com/en-us/publications/2018/augmented-reality-is-camera- next-big-thing-advertising.aspx “A Study of 46,000 Shoppers Shows That Omnichannel Retailing Works.” Harvard Business Review, https://hbr.org/2017/01/a-study-of-46000-shoppers-shows-that-omnichannel- retailing-works “CGS Survey Findings Show That Most Shoppers Still Prefer In-Store for Shopping Needs.” GlobeNewswire News Room, https://globenewswire.com/news- release/2018/03/20/1442772/0/en/CGS-Survey-Findings-Show-That-Most-Shoppers- Still-Prefer-In-Store-for-Shopping-Needs.html “Hootsuite's Social Media Barometer Report 2018.” Hootsuite, https://hootsuite.com/ resources/barometer-2018-global “How Businesses Use Online Advertising in 2018.” The Manifest, https://themanifest.com/ digital-marketing/how-businesses-use-online-advertising “Global Ad Spending Update - eMarketer Trends, Forecasts & Statistics.” eMarketer, https:// www.emarketer.com/content/global-ad-spending-update “New Report: The State of Influencer Marketing 2018.” Linqia, https://www.linqia.com/ insights/report-the-state-of-influencer-marketing-2018 “New Study Reveals That 40% of Marketers Distrust Their Media Agency Partners.” Adweek, https://www.adweek.com/agencies/new-study-reveals-that-40-of-marketers- distrust-their-media-partners StitcherAds | The State of Facebook & Instagram Advertising 2019 29
SOURCES “Selligent Marketing Cloud Study Finds Consumer Expectations and Marketer Challenges Are Rising in Tandem.” Selligent Marketing Cloud, https://www.selligent.com/press/ selligent- marketing - cloud - study -f inds - consumer- expectations - and - marketer- challenges-are-rising-in-tandem “Socialbakers Releases 2019 Social Media Trends Report; Offers a Deep Dive into What's Hot, What's Not on Social Media.” Socialbakers, www.socialbakers.com/company/for- press/releases/113-socialbakers-releases-2019-social-media-trends-report-offers-a- deep-dive-into-what-s-hot-what-s-not-on-social-media “Sprout Social Data Report: Social Advertising.” Sprout Social, https://sproutsocial.com/ insights/data/social-advertising-report “The 2018 CMO Survey: How Brands Win in the Digital Economy.” Dentsu Aegis Network, https://us.dentsuaegisnetwork.com/perspective/cmo-survey-2018 “The State of Omnichannel Retail.” Brightpearl and Multichannel Merchant, https://info. brightpearl.com/the-state-of-omnichannel StitcherAds | The State of Facebook & Instagram Advertising 2019 30
StitcherAds is an official Facebook & Instagram Marketing Partner. We help retailers solve unique digital marketing challenges through a mixture of innovative tech and expert service. T EC H SERVICE StitcherAds' tech enables marketers to optimize With managed service from StitcherAds, clients and scale their Facebook & Instagram campaigns receive custom solutions for their business for optimal performance. Retailers choose the challenges, like an extension of your in- StitcherAds platform for its unique omnichannel house marketing team. From custom creative marketing capabilities, product feed management, development to offline data solutions, our pre-to-post campaign optimization, creative dedicated success team will be your drivers for automation, and customizable reporting. innovation and growth. TO P R E TA I L E R S P OW E R T H E I R C A M PA I G N S W I T H S T I TC H E R A D S To overcome barriers with omnichannel adoption, scaling ad creative, and effective measurement — among other challenges: Visit: www.stitcherads.com Email: firstname.lastname@example.org StitcherAds | The State of Facebook & Instagram Advertising 2019 31
You can also read
NEXT SLIDES ... Cancel