Is Facebook The Answer For Ad Dollars Chasing Fragmented Audiences?

As brands look across a fractured media landscape, where few digital properties offer any scale, social networks offer them an interesting proposition.

Brands spend more on Facebook than any other social network. However, marketers are uncertain if that investment is well-spent.

In a new report from BI Intelligence, we analyze the state of social media advertising and where it is heading, offering a comprehensive guide and examination of the advertising ecosystems on Facebook and Twitter, offer a primer on Tumblr as an emerging ad medium, and detail how mobile is an important part of this story as mobile-friendly native ad formats fuel growth in the market.

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Here's a brief look at the state of advertising on Facebook:

• Social media advertising is a high growth market: BIA/Kelsey recently came out with a study that offers one view - forecasting $11 billion of social ad spend in 2017, up from $4.7 billion last year. Social media advertising is a young and growing market and, so far, it only represents 1% to 10% of ad budgets for a wide majority of advertisers. There's significant opportunity for that share to grow.
• And Facebook is the clear market leader: Top brands allocated 57% of their social media budgets to Facebook in 2012, according to Technorati Media's 2013 Digital Influence Report. Twitter and YouTube each only mustered 13% of social budgets. By the fourth quarter of last year, mobile revenue made up 23% of Facebook's revenue. According to social ad optimization platform TBG, Facebook's mobile ads have the highest click-through rates by a substantial margin. Furthermore, native in-stream ads are perfectly transferable across devices, whereas display ads can have issues on a smaller screen.
• But, brands don't know how to value "Likes,"and are not overwhelmingly convinced their Facebook spend is effective: Brands simply can't quantify the value of a "Like." Researchers have attempted to calculate the potential value of a user who "Likes" a brand, but those numbers vary wildly. Social Media Examiner's 2013 Social Media Marketing Industry Report surveyed 3,000 marketers, and 41% said they are "uncertain" about the effectiveness of Facebook marketing. The report also found that 17% flat-out said the site is ineffective for marketing purposes. Only 32% agree it is effective.
• This disconnect points to room for improvement: While Social Media Examiner's study encompassed the views of a wide range of marketers, not only large brands, the general point is still relevant: social media marketing is still viewed with skepticism. Facebook should do much better in delivering and communicating results, and other social networks have to try harder to lure brand money away from Facebook, since they clearly have an opening to do so.

In full, the report includes:

• The State Of Social Media Advertising And Where It's Headed.
• A Guide To The Facebook Advertising Ecosystem.
• A Guide To The Twitter Advertising Ecosystem.
• A Primer On Tumblr's New Ad Products.

To access BI Intelligence's full reports on The State Of Social Media Advertising, sign up for a free trial subscription here.