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Advertisers Say What We're All Thinking: Social-Media Spending Is Going to Explode

If You're Selling Social, the Doors Are Open and Checkbooks Are Out

By Published on . 15

Facebook is prepping for a massive IPO, Twitter is focusing its business exclusively on advertising and nearly three-fifths of digital decision-makers polled last fall said they plan to boost their social-media-ad spend over the next 12 months.

In an Advertiser Perceptions semiannual survey of nearly 1,200 people involved in deciding how ad dollars are spent digitally, 59% of respondents said they would increase social-media-ad spending in the next 12 months, compared with just 4% who said they would decrease spending on social platforms.

The survey also found that , on average, social-media advertising will make up about 27% of digital budgets over the next 12 months, compared with 22 % in the previous 12 months. No other digital category -- including ad networks/exchanges, media companies, demand-side platforms, portals and agency-trading desks -- expect to see in-budget share gains over the next 12 months.

The budget gains for social seem to come at the expense of other platforms, with a decreased percentage of spending on ad exchanges and networks, as well as a slight downtick in the share of budgets going toward spending on portals, according to the report.

About 60% of respondents work for agencies and 40% for brands, covering the Ad Age Top 100 advertisers in the process.

"The one area that marketers were more bullish on than agencies is social," said Randy Cohen, co-founder and president of Advertiser Perceptions, which is expected to release the full results Tuesday afternoon.

Agency-trading desks, which handle bulk-audience buying on behalf of clients, was the only digital category in which respondents said they would decrease rather than increase spending over the next 12 months. Sixteen percent of respondents said they plan to reduce trading-desk outlays; 15% said they would raise them.

One strong caveat: The results indicate what decision-makers intend to do about allocating ad dollars. Results and other factors will ultimately determine what they actually spend, and Mr. Cohen said that while marketers feel they should be spending on social platforms, they are doing so without clear insights as to why. "From a results perspective ... I think the jury is still out," he said.

But what it does mean, if you're in the business of selling social, is that the doors are open and, in many cases, the checkbooks are out.

The leading digital advertisers believe that half of their budgets in the next 12 months will be spent on brand-focused advertising. That number was just 25% or 30% three or four years ago, Mr. Cohen said.

He also said that the numbers associated with ad-tech providers should be taken with a grain of salt, considering that there is still considerable confusion among marketers about players and categories.

For example, very few marketers could identify what each category of ad-tech company does or name companies that fall into each category, according to Mr. Cohen. "Ultimately, it's plumbing," he said. "The marketers could care less how it all gets done as long as they get results."

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