Report: Social Media Getting Bigger Share of Ad Dollars

Social media advertising is garnering a larger share of advertising budgets, according to a recent second quarter agency survey conducted by STRATA, the leader in media buying and selling software with over $50 billion in ad transactions passing through its systems each year. The survey found that 20% of agencies report they are likely to allocate between 11-25% of their ad budgets to paid social media, representing a 24% increase from the previous quarter. An additional 24% of agencies are allocating 6-10% to paid social. Facebook continues to lead in agency advertising as 93% plan on using it in their campaigns, followed by YouTube (57%), Twitter (52%), and LinkedIn (29%).

The rise in social media ad spend and newer advertising mediums has created a more complicated media planning picture for agencies. Media mix surpassed client attraction and comes in overwhelmingly as the biggest challenge facing 40% of agencies, marking an 85% increase from the same time last year. Following media mix was client attraction (24% of agencies) and client spending (11%). Similarly, 22% of agencies expect their clients to make minor budget cuts from last year.

“There’s an undeniable correlation between the rise in social media advertising with mobile device behavior,” said Joy Baer, President of STRATA. “Agencies and advertisers are going to follow their audience. Mobile users are checking Facebook and Twitter throughout the day.  So when you consider that around 60% of digital media time spent in the US is on smartphones and tablets, then it makes perfect sense to reach the audience in the apps that they’re already accessing.”

A key technology many advertisers are increasingly turning to is programmatic buying, which has been steadily gaining the confidence of agencies.

While 46% of agencies report they are still unsure if they trust programmatic to execute their ad buys, 20% do trust programmatic, a 49% increase from last quarter, while only 11% say they do not trust it, a drop of 32%.

Compared to a year ago, 244% more say they are using programmatic to carry out between 20-40% of their business (17% of agencies overall). Thirty-nine percent use programmatic for 10-20% of their ad buys, an 18% increase from a year ago. The biggest remaining concern regarding programmatic, however, is transparency into inventory sources (54% of agencies) followed by quality of inventory (50%).

Other findings include:

• 22% are more interested in spot cable than they were a year ago (up 55% from last quarter), while 22% are less interested (down 13% from last quarter). 20% are more interested in advertising on spot TV than they were last year.
• 66% are more interested in advertising on streaming/online video than they were last year (up 45% from a year ago).
• 39% expect their growth in the second half of the year to better than the first. 52% say they expect their future growth to be the same as it was in the first half of the year.