Social ad spend continues to grow faster than any other ad investment channel—as brands have opened their wallets, social platforms have raced to roll out new ad offerings that capitalize on this trend. However, the rapid pace of innovation has made social platforms difficult for brands to crack. With no end in sight to the volatility of social platform advertising options, brands should use the following five trends for 2017 as a framework for their social strategy.
Facebook Ad Fatigue:
Facebook remains the juggernaut of social platforms, continuing to innovate rapidly with new mobile and video ad products as well as enhanced commerce capabilities and attribution tools. However, the platform has hit some speed bumps —in November 2016, Facebook warned shareholders that revenue growth would slow given limits on the number of ads the platform can serve without alienating consumers. Evidence of this ad fatigue has already been felt—while the share of posts promoted by Index brands on Facebook hovered around 16% from February to October 2016, average interactions per promoted post decreased 19%. Brands must therefore keep content fresh and relevant to avoid boring their audience.
Instagram Organic Reach Declines: Instagram remains the dominant engagement platform, accounting for 92% of all social interactions. However, changes to its algorithm have led to a decline in organic reach. While post frequency increased from nine posts per week during Q3 2015 to 10 posts per week during Q3 2016, interactions for every 1,000 followers decreased by 30 percent across Index brands. Brands must therefore adjust their Instagram strategies to reflect this new reality, leveraging assets like UGC and influencers to drive engagement.
Brands Flock to Snapchat: With over 150 million daily active users, Snapchat has grown from a cute social darling to a serious contender for brands’ social attention. Snapchat brand account adoption grew 50% from January to October 2016, increasing overall adoption to 64% of brands. Snapchat advertisements also increased—23 brands accounted for 161 Snapchat Discover ads in January 2016, while 63 brands accounted for 387 Snapchat Discover ads in October 2016. Snapchat can no longer be ignored—best-in-class brands must create engaging content on the platform to reach and engage millennial consumers.
Live Video Explodes:
Periscope was the belle of the ball in 2015 and thrust live streaming into the social spotlight. While Periscope has lost momentum, live streaming continues to grow on the backs of social juggernauts YouTube and Facebook. In December 2015, Facebook began testing live video streaming, and in April 2016, the platform extended Facebook Live to all users. Brands have gradually warmed to the platform—only 5% of Index brands currently use Facebook Live, but adoption has slowly increased, from just 0.3% of total brand Facebook videos in April 2016 to 1.9% of total brand Facebook videos in October 2016. Beauty and Auto brands have been particularly bullish on the platform with each vertical accounting for 21% of Facebook Live videos. The platform presents a strong opportunity for brand engagement—winning brands will be those that use live video to appeal to millennials who crave interactive, real-time, and reality content.
Twitter Replies Decline: Twitter faced declining revenue and user growth throughout 2016. The platform identified customer service as a potential growth area, rolling out new features that enable more seamless one-to-one conversations between brands and consumers. On first glance, this tactic seems to be working—Twitter accounts for 81% of all brand posts across the four major social platforms (Facebook, Instagram, YouTube, and Twitter), and two thirds of Index brands use their Twitter accounts to perform customer service. However, brand replies on the platform are actually declining. The average number of unique customers to whom Index brands replied on Twitter declined by 15% from Q1 to Q3 2016. The declines were even more rapid in specific verticals. For example, Activewear brand replies declined by 32% and Department Stores/CPG brand replies fell by 24%. Brands present on Twitter must therefore be attentive to their consumers or abandon the platform all together.
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