22 facts show social media is pay to play now

Posted on June 12, 2016 by Rob Petersen




social media pay to play

For many businesses, an allure of social media is it’s a free way to promote your company. Seductive thinking. Maybe that’s why 88% of U.S. businesses use social media marketing.

Companies worldwide spent $23.68 billion on social media advertising in 2015, according to eMarketer, a 33.5% increase from 2014. By 2017, social network ad spending will reach $35.98 billion, representing 16.0% of all digital ad spending globally.

Seductive thinking to social networks and their shareholders raising the question: Would a social network favor someone who pays for an ad over someone who posts for free?

Here are 25 facts that show social media is pay to play now.

FOLLOW THE MONEY: Social network revenue from advertising is growing at significant rates.

  1. Facebook advertising revenue jumped 57% in the first quarter of 2016 to $5.2 billion from $3.3 billion. Mobile ads, which command a higher price than those shown on desktops, accounted for roughly four-fifths of that revenue. (The Wall Street Journal)
  2. LinkeIn’s ad revenue grew by 29% in the 1st Quarter of 2015 to $154.1 million. (MarketingLand)
  3. Twitter in fourth quarter 2015 made $641 million from advertising, up 48% year-over-year and with mobile accounting for 86% of that sum. (Ad Age)
  4. By 2017, Instagram’s global mobile ad revenues will reach $2.81 billion, accounting for over 10% of parent company Facebook’s global ad revenues. (eMarketer)
  5. Snapchat sold its first ad in October 2014, brought in $3 million that year, and is on track to generate $100 million in revenue in 2016. (Business Insider)
  6. Pinterest’s leaked financials revealed the company is targeting $2.8 billion in revenue by 2018. (Business Insider)
  7. Social programmatic ad platforms are growth engines. Spending on FBX, Facebook’s programmatic platform, increased by 150% year-over-year globally during the second quarter of 2014, based on a sample of advertisers compiled by Ignition One. (Business Insider)
  8. Social networks earned an estimated $8.3 billion from advertising in 2015. (Jeff Bullas)

AD PRODUCTS FOR ALL BUSINESSES: It’s a very sophisticated marketplace. There’s an ad product for every business.

  1. Small businesses spend an estimated $5 to $50 a day on promoted posts and ads on Facebook. (Reuters)
  2. 76% of B2C respondents use promoted posts – boosted Facebook posts and promoted tweets and pins. 61% find promoted posts effective. (Social Media Examiner)
  3. 80% of LinkedIn’s revenue growth is from sponsored content. (MarketingLand)
  4. Google+ advertising is changing the way social ads work. Called +Post ads, they allow businesses to pay to have content shared on Google+ appear as an expandable, interactive display ad across the web. (Modern Connection)
  5. Snapchat charges $750,000 for a disappearing ad on its platform drove an audible gasp from the industry. (eConsultancy)

ORGANIC REACH IS DECLINING: It’s getting harder to achieve the same results posting for free on social networks.

  1. “Organic reach” of content from brands and small businesses has fallen to less than 2 percent of all fans. (Inc.)
  2. In December of 2013, Facebook changed the algorithm that determines who sees what content, resulting in business pages losing 40-80% viewership of their posts. (Modern Connection)
  3. Company Facebook pages reach as little as 2.6% of their followers. (Adweek)
  4. Of the 2.6% of users pages reached with their posts, 11.8% engaged with those posts, on average. (Adweek)
  5. Pages with more than 1 million Likes saw link posts perform the best, at 3.78% reach. For those with fewer than 1,000 Likes, video posts perform best with reach up to 30.0%. (Adweek)
  6. Average organic likes growth was 0.53%, and pages with fewer than 1,000 Likes saw that figure rise to 1.62%.(Adweek)

SOCIAL MEDIA WORKS: Is social media worth it? The facts say “yes.”

  • People are spending nearly an hour every day scrolling through Facebook status updates, liking Instagram posts, or chatting on Messenger (Business Insider)
  • Facebook has 50 minutes of your time each day (NY Times)
  • 42% of marketers report that Facebook is critical or important to their business. (Source: State of Inbound Marketing 2012 (Zephoria)

Do these facts convince you social media is pay to play now? Does it change your thinking? Does your business need help navigating social media in a pay to play world?

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