Social ads work. Google’s +1 button encourages more people to click on socially “enhanced” ads. For Facebook, social ads increases ad recall by 55 percent. So it’s not too surprising that more money will be spent on social media ads this year.
Microsoft has also recently jumped into social advertising with the assistance of Bazaarvoice, to create "people powered stories" that include customer reviews and ratings within display ads.
Here’s a quick look at the latest reports showing the how social is influencing advertising.
Google +1 Lifts Click-Throughs 5-10%
Ads with a social annotation are seeing a 5 to 10 percent lift in click-through rate, according to Vic Gundotra, Google’s vice president for engineering. Gundtotra cites this as proof that Google+ is succeeding, despite a spate of stories that claim otherwise.
“We have been in this business for a long time, and there are very few things that give you a 5 to 10 percent increase on ad engagement,” Gundotra told the New York Times. He added that Google, unlike its competitors, can deliver these socially enhanced ads at the time of intent rather than at random in a social stream.
Ideally, this means that if a user is searching Google for a television or some other product, then Google can deliver an ad based on suggestions from people who are in that user’s Circles.
Nielsen: Social Ads Lifts Ad Recall by 55%
Ad recall increases on average by 55 percent for social ads compared to non-social ads, according to a Nielsen study.
Social has its advantages, Nielsen said, because 76 percent of U.S. Internet consumers trust recommendations from friends and personal acquaintances, while 49 percent trust consumer opinions posted online.
The study looked at 79 Facebook campaigns over a six month period, leading Nielsen to conclude:
Based on this analysis, more and more advertisers may consider leveraging ads with social content as a means to better utilize the power of the network of consumers engaged with their brands. This also serves as justification for marketers’ efforts to create more social connection points with their consumers, as their brands will be better positioned to reach a larger group of prospects.
More Social Spending to Increase Social Ad Revenues
Fifty-nine percent of respondents to an Advertiser Perceptions survey reported that they plan to increase social media ad spending over the next 12 months, compared to 4 percent who plan to decrease social spending. Social media advertising will account for about 27 percent of digital budgets, up from 22 percent over the previous year, according to the survey of 1,200 people, as reported by Advertising Age.
Meanwhile, social networks will see revenue from advertising increase nearly 50 percent this year. Advertisers will spend $7.72 billion on social networks – with nearly half of that money coming from the U.S., led by Facebook, which will take in about 70 percent of all social networking spend in the U.S., while Twitter will grow to 8 percent by 2014, according to an eMarketer forecast.