Razorfish Sees Solid Growth for Social Network Ad Spending; eMarketer Not So Much
December 18th, 2008 by Garrick SchmittTags: ad spending, Advertising, akqa, consumer behavior, coors, dollars, emarketer, facebook, feed, jeff lanctot, levis, marketing, razorfish, Social Media, social networks, victoria's secret pink
eMarketer is out with a very comprehensive, semi-gloomy report on the future of Social Network Ad Spending this week. Written by Debra Aho Williams, the report finds that despite the introduction of significant new ad formats, eMarketer is revising down spending estimates for 2008 (to a 10.2% uptick), due to an ailing US economy and slower-than-expected revenue growth at MySpace.
At Razorfish, we are more bullish. Jeff Lanctot, who heads up corporate strategy for Razorfish, was interviewed extensively for the report and data from FEED: The Razorfish Consumer Experience Report was prominently featured.
As Jeff explained, many of our clients (such as Victoria’s Secret, Coors and Levi Strauss & Co.) are increasing social network ad spending:
“Our combined spending on MySpace and Facebook was up 32%, Q2 over Q1. Q3 was up an additional 22%. We don’t have enough data this quarter to say how Q4 will turn out, but the trend to date has clearly been strong growth.”
Jeff went on to discuss the success of Victoria’s Secret PINK which is one of the top brand draws on Facebook with over 580,000 fans and continues to use the service to make meaningful connections with the teen/college audience.
Additionally, Razorfish is finding that social network advertising is becoming a staple of today’s ad campaigns. “Some of those bigger brand campaigns [on social networks] have become staples of our clients’ campaigns, and they are considered accountable and will continue in a downturn, Jeff said. “The way the movie studios look at MySpace when they’re releasing a movie targeted to the younger demo—it is absolutely a critical part of the rollout of their movie, quite frankly, the way that MSN or Yahoo! were three or four years ago.”
The eMarketer study also cites two key findings from our Connected Consumer Study:
Ultimately, the eMarketer report is one of the best out there on the state of social media and advertising. Beyond the Razorfish data, there’s great bits on top Facebook pages, social consumer behavior, fastest growing social network sites and interesting viewpoints from AKQA, among others.
As the year wraps up, it will be interesting to see where other agencies and marketers are tracking for 2008. We hope, up.
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2 Responses to “Razorfish Sees Solid Growth for Social Network Ad Spending; eMarketer Not So Much”
Garrick,
Interesting perspective, and post. It’s great to hear what’s happening with some of your Razorfish clients.
The eMarketer report is one of the best overall reviews on online advertising for ‘09 I agree, but also thought forecast numbers for social media were a bit conservative.
There’s been a few other reports released on ad spending projections for ‘09, including an article in Businessweek http://www.businessweek.com/technology/content/dec2008/tc20081224_411499.htm). Many are being cautious in their forecasts for ad spending(especially for TV & print) due to the economy, but most are in fact bullish on interactive (and social media) increases.
Given the audience/engagement numbers, campaign successes, ROI and client testimonials we’re seeing, it’d be hard not to be.
More than half of U.S. consumers are using SNS, with almost 60% using every day, according to iDC. Facebook and MySpace are reaching 200MM every month, and we all know that the web in general is becoming more social.
So as long as social media continues its upswing in audience numbers, and as a preferred medium…..I think marketers realize that they have to be there, engaging in conversation to reach consumers “authentically.” And we’ll see a bigger % allocation towards social network advertising in budgeting.
As an industry though, we have a tremendous opp to better analyze and evolve the ROI/value proposition of social media.
The formation of the Web Analytics Association is an excellent resource. And kudos to Razorfish for the leadership in publishing the Connected Consumer Survey, and your patent work in implementing action tag technology to clients’ campaigns. Excellent results on client campaigns for Victoria Secret/Pink and Levi’s among others.
Here’s hoping for a successful (and evolving) 2009. Best,
Ann
Thanks for your thoughtful comments, Ann. Completely agree. I also think much of social media spending today is “unmeasured” (microsites, videos, blogs, etc.) not “measured” which would include things like banners, pre-rolls, etc.
Social is demanding new ad formats to match the mushrooming inventory and we are definitely not there yet (or even close).