45% Of Marketers Plan To Increase Paid Social Budgets In 2017, Supporting Search

Can paid social campaigns generate more brand searches on Google, Bing and across retail Web sites? Some insiders who are managing paid social and search think so. It's driving higher budgets in social media, with 45% of marketers planning to increase spending on paid social next year. The remainder said they will keep budgets the same, according to a study released Tuesday.

Direct-response spending on Facebook in the second quarter of 2016 rose 154% compared to the first quarter of 2015. In the third quarter of 2016, direct response accounted for 80% of SocialCode’s retail clients’ spend on Facebook and Instagram, up from 66% during the same quarter last year. 

Search is a major investment made by direct-response marketers to capture demand and intent that converts to leads and sales, said SocialCode CMO Max Kalehoff. While it made Google one of the "most powerful media platforms on the planet," media platforms like Facebook are unlocking budgets to paid social. "One of the big drivers is its ability to drive full-funnel performance, from brand awareness to consideration and purchase, while tracking consumers along their journey to deliver a more personalized experience and surface viable customer insights," Kalehoff said. "The power of precise audience and creative combinations, including video, is putting paid social media at the center of marketing." 

SocialCode, which manages social advertising for companies like Macy's, RB, Nestle, Heineken, AB-InBev, CapitalOne and Visa, teamed up with the CMO Club to determine whether marketers will increase or decrease their social-media spend in 2017 and how they will apply it.

The survey of 63 marketing executives, from heads of marketing and CMOs, primarily with business-to-consumer brands will manage annual ad budgets greater than $25 million. The report, “CMO Solutions Guide: Getting More Out of Paid Social, What Really Works,” details the recent learnings of marketing leaders at Neiman Marcus, Camuto Group, Famous Footwear, LaQuinta Inn & Suites, and others.

The research reveals that some marketers will cannibalize other budgets to increase paid social spend. About 8% report sourcing their paid social activity from TV, radio and other sources, while only 20% plan to decrease TV budgets in 2017. Some 73% plan to keep their TV spend the same. This shift in budget allows marketers to experiment with new channels and strategies. 

It also reveals that 63% of marketers use social ads for direct response and 40% implement it to drive brand awareness. Only 15% of CMOs surveyed are using paid social for full-funnel marketing strategies from the top of the funnel to a final sale. This is where many opportunities are missed to turn social insights into real commerce.

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