This isn't your father's pop up ad: Social media brands engage to the tune of $11 billion in ad spend by 2017

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Aug 05, 2014, 02:15 ET

CHICAGO, Aug. 5, 2014 /PRNewswire/ -- When it comes to social networking landscape, advertising is merely one piece of the social media puzzle, but it's a big one. Mintel predicts that the total advertising spend on social media in the US will surpass $11 billion by 2017—and it's apparently working. Nearly 40% of US social networkers said social media has some influence on them when conducting research for products and services. Men and women aged 18-34 are the most likely to use social media to guide purchase decisions, with 21% of 18-34-year-old men reporting they purchased a product by clicking on a social ad.

While display ads have traditionally dominated the digital marketing world, social media shows a clear push for native advertising—defined as a form of paid media where the ad experience follows the natural form and function of the user experience in which it is placed. Indeed, native advertising is expected to outpace this overall ad growth, increasing from $1.8 billion in 2013 to $9.4 billion in 2018.

"Social advertising spend is on the rise and shows no sign of slowing down," says Mintel technology analyst Bryant Harland. "While display ads still play a key role in terms of brand awareness and new product discovery, getting the most out of social media marketing requires a greater emphasis on aiding networkers in conducting deeper research and helping them find information that is truly relevant to their needs."

To that end, some 79% of those surveyed have viewed or shared content from a company or visited a company's social media page. Nearly one quarter of networkers said they looked for more information on a search engine after seeing a video, image, or other social media post that a company put on social media, and 28% said they visited the company's website after seeing content from the brand. Only half of networkers said that social media has no influence on their purchasing decisions, suggesting that 50% do consider social network content to some degree.

Only 9% of networkers said they made a purchase by clicking on a social media ad. However, 11% said they purchased a product they saw advertised without clicking an ad, suggesting there is more to social advertising than direct conversions.

"Although third-party review websites and the brand's website are the top avenues for research overall, companies can still gain considerable traction by making product information readily available through social media," continues Bryant. "Native advertising is a less blatant form of advertising relative to methods past, and seems more organic and customized to the user. Considering that any high frequency of social media usage, including more frequent interaction with friends, correlates with a higher likelihood of using social media for research, the value of the channel vastly improves when looking at the most active networkers."

So where to place the advertising dollars? When considering weekly usage, Facebook is the clear winner, with 86% of networkers reporting they visit the site once a week or more, followed by YouTube (60%), Google+ (43%), Twitter (37%), LinkedIn (30%), Pinterest (30%) and Instagram (28%). Along with the younger demographic, parents show an increased responsiveness to advertising (19%) and a higher tendency to buy products and services that their social media friends use (15%) compared to those without children in the household.

About Mintel
Mintel is a leading global supplier of consumer, product and media intelligence. For more than 40 years, Mintel has provided insight into key worldwide trends, offering exclusive data and analysis that directly impacts client success. With offices in Chicago, India, London, Malaysia, New York, São Paulo, Shanghai, Singapore, Sydney, Tokyo and Toronto Mintel has forged a unique reputation as a world-renowned business brand. For more information on Mintel, please visit www.mintel.com.

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