Digital advertising is the highest priority for 68% of the 260 owners and managers of businesses, including retailers, surveyed for the Reveal Mobile Holiday Advertising Forecast. Social media marketing will get more than 36% of companies’ advertising budgets in contrast to the 32% of planned spending on traditional media such as TV, radio and print.
Of digital spenders, 42% said Facebook would benefit from the majority of the budget, followed by Google at 28%, Facebook-owned Instagram at 18%, and Amazon at 12%, Reveal Mobile’s forecast said.
Tech tools such as location-based marketing are finding increasing use for digital advertising because they simplify the task of targeting messages. Eighty-four percent of the small-to-medium business marketers who said they will use this tool indicated they will use it with some degree of consequence this season, and 28% are sold on its importance as they use it on every campaign.
This holiday spending season is projected to be one of the biggest ever, with e-commerce, mobile and social media all contributing heavily to revenues. As a result, how retailers use their advertising dollars will be a major factor in influencing shoppers’ buying decisions. “This holiday season has the potential to set new records for both in-store and online purchases,” the Reveal Mobile report said.
Unsurprisingly, businesses reported that two-thirds of their ad spending will go to digital channels, and of those companies, 42% will focus on Facebook, and another 18% on Facebook-owned Instagram, according to Reveal’s holiday ad spending report. That’s a majority of the digital spend going to the same social media behemoth. In context: social media spending will be more than one-third (36%) of holiday ad budgets; followed by email marketing at 15%; TV at 15%; print at 14%; search engine marketing at 7%; radio at 3%; and digital display ads also at 3%.
Digital ads for mobile came in at a minuscule 0.5%, despite an eMarketer report that mobile makes up 70% of retailers’ digital ad spend, but Reveal Mobile noted that people spend most of their time on social media or other online shopping with mobile devices (which are set to drive 68% of online holiday traffic) where they will see the results of other types of ad spending. In short, mobile is now a primary shopping channel and there’s no advantage to advertising specifically on mobile that isn’t covered by other digital initiatives.
“The biggest takeaway is that social media is the clear winner in terms of capturing the bulk of holiday ad spend,” the report said — and retailers used the platform generously last year to drive traffic. “We’re also interested to learn how Amazon ad spend grows over time, as Amazon expects their ad business to become a major component of their company’s revenue.” Compared to other platforms, like Facebook, Google and Instagram, Reveal Mobile reported that Amazon will get the lowest percentage of digital ad spend this year, about 12%.
The Reveal Mobile report noted that Facebook and Google lead the pack in the digital ad ecosystem. But with ad spenders increasingly relying on a limited number of digital platforms, advertising prices will likely increase. So, to maintain their return on investment, companies will need to seek out other channels that are more affordable, like local media and programmatic advertising driven by geotargeting. Amazon’s ad growth could result in a “triopoly” in digital ad revenues with Facebook and Google, Forrester reported. Forty-four percent of ad buyers already use the Amazon Advertising Platform, the report said.
Asked how retailers allocate their holiday ad spending, Reveal Mobile reported that 60% said they spread it out evenly through the holiday period, 21% said they focus on reaching Black Friday shoppers, while 19% concentrate their spending on Cyber Monday shoppers. During the holidays, 37% of companies increase their ad budgets; 7.5% said it decreases; 30% said it stays the same; while 25% said they don’t spend on advertising.