Q1 2017

The State of Social Advertising

NEW! NEW!NE

BE AUTHENTIC.

EMBRACE URGENCY.

GO LIVE.

SYNC SCREENS.

MERGE DATA.

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The State of Social Advertising Q1 2017 ©2017 4C Insights, Inc.

INTRODUCTION ........................................................................ 2

KEY TRENDS AND BEST PRACTICES ........................................ 4

CONTENT: EMBODYING AUTHENTICITY ............................. 4

CONTENT: EMBRACING URGENCY ...................................... 5

CONTENT + DELIVERY: GOING LIVE .................................... 6

DELIVERY: MULTI-SCREENING ............................................. 7

DELIVERY: DEPLOYING DATA ............................................... 8

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The State of Social Advertising Q1 2017 ©2017 4C Insights, Inc.

IntroductionSocial media continues to grab more marketing dollars and play an increasingly central role in overall brand strategy.

To assess social advertising growth in Q1 2017, we analyzed a representative sample of the brands managed through the 4C Social Ads product on Facebook, Instagram, Twitter, LinkedIn, Pinterest, and Snapchat. The total sample included over $130 million in media spend for more than 900 individual brands. Year-over-year (YoY), we saw an overall 61.5% increase in paid media spend indicating a strong start to 2017.

In the first quarter, Instagram reached 1 million advertisers, unveiled a new shopping experience, delivered capabilities to share multiple photos and videos in a single post, released Instagram Stories ads globally, and brought Business Insights and Ads to Stories. The rapid pace of innovation also brought monetization as the visually-driven platform achieved an increase of 161% in spend through 4C YoY. Following up on the holiday season, Instagram spend grew 8% quarter-over-quarter (QoQ).

Compared to Q4, the healthcare vertical increased Instagram ad spend through 4C the most — up 265% QoQ. Meanwhile, consumer packaged goods (CPG) ad spend grew the most on Instagram YoY — up 5,542%.

Facebook continued its strong growth with an increase of 81% in spend on 4C, propelled by new features and products. In Messenger, Facebook introduced

Live Locations, Reactions, Mentions, and new ways to share your day. On Facebook proper, new visually-driven features were launched with Facebook 360 for Samsung Gear VR, Camera Effects and Stories, new ways to go Live and watch video. Facebook also released more privacy controls and updates to Trending.

In terms of different sectors, food and beverage had the highest Facebook growth QoQ at 49%, while home and garden was up the most YoY at 628%.

During the previous quarter, Twitter announced many new partnerships to bring original content and live programming to the platform. Additionally, Twitter delivered new features for Replies, launched its Explore tab, introduced advanced muting options, and rolled out new audience insights for Periscope.

Increasing its investment most over Q4 on Twitter was CPG, which grew 198%. Food and beverage was up the most YoY, increasing 380%.

SPEND UP 5,542% YoY

CONSUMER PACKAGED GOODS

SPEND UP 265% QoQ

HEALTHCAREINST

AG

RAM

SPEND UP 628% YoY

HOME & GARDEN

SPEND UP 49% QoQ

FOOD & BEVERAGEFACE

BOO

K

SPEND UP 380% YoY

FOOD & BEVERAGE

SPEND UP 198% QoQ

CONSUMER PACKAGED GOODSTWIT

TER

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The State of Social Advertising Q1 2017 ©2017 4C Insights, Inc.

LinkedIn, in its first quarter under Microsoft, grew 21% in spend YoY on 4C. Behind the growth were three new features, including Trending Storylines, Profile Photo Editing, and new ways for finding job candidates.The telecommunications industry raised its LinkedIn ad spend the most, up 141% QoQ on 4C. Compared to a year ago, legal and finance was up 438%.

Last quarter, Pinterest announced it has grown to over 175 million people utilizing the visual bookmarking tool. In addition, Pinterest announced the launch new capabilities for advertisers including Promoted App Pins, Pinterest ad groups, Search Ads, and Pinterest Propel, a resource for companies new to Pinterest advertising. Promoted Pins also came to Ireland and New Zealand and new visual discovery tools were unveiled. All this expansion along geographic and capability lines helped drive Q1 Pinterest growth on 4C of 73% YoY.

While Pinterest has proven to be effective for a number of different verticals, CPG grew the most on 4C last quarter, up 26% QoQ and 1,696% YoY.

The first quarter of 2017 was monumental for Snap, the newest platform supported in 4C. Snap revealed its Snap Ads API Partners, held its IPO, and introduced search for Stories.

Our current mix of 40+ Snap advertisers is pretty diverse across CPG, entertainment, finserv, teleco and others with key metrics ranging from web visits to video views to app installs. Indeed, Snap Ads deliver results across the full funnel. There is clearly strong momentum for Snapchat in the market as Snap Ads spend shot up 593% QoQ through 4C.

SPEND UP 438% YoY

LEGAL & FINANCE

SPEND UP 141% QoQ

TELECOMMUNICATIONSLIN

KED

IN

SPEND UP 1,696% YoY

CONSUMER PACKAGED GOODS

SPEND UP 26% QoQ

CONSUMER PACKAGED GOODSPIN

TERE

ST

SPEND UP

593%

QoQ

ACROSS ALL CATEGORIES

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The State of Social Advertising Q1 2017 ©2017 4C Insights, Inc.

Key Trends and Best PracticesSocial platforms are driving the pace of innovation in media. We’ve distilled some of the biggest emerging trends by querying several of our partners that are operating on the forefront of the industry. Over the last quarter, 2 main themes stood out — the transformation in how brands approach content and new methods for content delivery.

CONTENT: EMBODYING AUTHENTICITYSocial media has put the influence of mass media into the hands of individuals. The result is more content being created by more people. As people consume more content created by their peers, they’re seeking brand content that has a similar vibe and aligns with their values.

To connect with consumers, brands need to focus on content that feels authentic. Amanda Antosh, Social Media Specialist, Socialyse states she’s seeing ads with “less high-design elements, making them look more user-generated.”

“When consumers feel like they’re seeing a brand’s true colors on social media, they become more invested,” says Sean Cotton, President, Coegi. “In fact, a recent study found that a majority of Millennials view social advertising as the most influential form of marketing out there.”

Data can help marketers ensure they’re delivering messages that resonate while not overextending their brand. “Personalization is key,” explains Emma Morgan, Paid Social Manager, MediaCom. “With the Data Protection Act, I think there is a real opportunity for brands to be really clever with the level of up-selling and cross-selling they can do that is relevant to the users while controlling frequencies.”

Driven by playful and ephemeral vertical video, brands must be willing to step outside the boundaries of traditional content to connect with consumers, especially on platforms such as Snapchat.

"Snapchat’s features contribute to an environment where brands can be really creative, but the right creative is crucial. The company is also continuing to expand ad offerings that include live-streaming, 360-degree video ads, and shoppable ads. 4C's robust reporting and intelligent triggers allow you to capitalize on these live moments."KYLE JACKSON, SVP GROUP DIRECTOR, PERFORMANCE MEDIA, MEDIAVEST | SPARK

Critical to embodying authenticity is creating content that relates to the context of the consumer. This is quite evident as 65% of time spent with digital media is on mobile.

"Optimize content for mobile (shooting in vertical format)."AMANDA ANTOSH, SOCIAL MEDIA SPECIALIST, SOCIALYSE

4C TIP

Be true to your brand’s identity. Not every brand is a fit for every platform and every consumer. Utilize tools such as 4C Social Lift to understand what your audience really cares about and then cater your messages in that way.CHRISTIAN WEST, ACCOUNT EXECUTIVE, 4C

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The State of Social Advertising Q1 2017 ©2017 4C Insights, Inc.

CONTENT: EMBRACING URGENCYWith people having the ability to share in real-time, it’s imperative for marketing to keep pace with the speed of modern consumer life.

“With Twitter being dubbed the no.1 News app in the world, their repositioning gives them the edge for brands wanting to be reactive or tap into moment marketing before other channels.” EMMA MORGAN, PAID SOCIAL MANAGER, MEDIACOM

Snapchat and Instagram Stories have been successful at enabling brands to seize the moment with ephemeral video that if not watched within 24 hours is missed.

“Urgency and timeliness are at a premium on Snapchat, making it a perfect fit for limited-time promotions. And because ads disappear within 24 hours, brands don’t need to worry about pushing outdated information or expired offers.” SEAN COTTON, PRESIDENT, COEGI

It’s important for brands to get handle on ephemeral ads as the impact can be lasting. Amanda Antosh, Social Media Specialist, Socialyse expects to see “more disappearing ads and in more places to follow Snapchat's popularized model.”

4C TIP

Real-time measurement is just as important as timely ads. Brands need to be able to deliver ads to the right people at the right time while optimizing them in real-time. 4C’s robust reporting and intelligent triggers allow you to capitalize on these live moments.LISA CARAVELLI, ACCOUNT EXECUTIVE, 4C

NEW! NEW!

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The State of Social Advertising Q1 2017 ©2017 4C Insights, Inc.

4C TIP

Producing live content regularly can be a huge challenge for any brand, and not every brand is going to be able to do so. To dip your toes into the water, start with Snap Ads or Instagram Story Ads and see how consumers respond.CHRISTIAN WEST, ACCOUNT EXECUTIVE, 4C

4C TIP

4C makes it very easy to get running on Snapchat’s Live and Discover feeds and Instagram Stories since we have the same functionality and workflow across platforms.LISA CARAVELLI, ACCOUNT EXECUTIVE, 4C

CONTENT + DELIVERY: GOING LIVEBuilding on the theme of urgency in social is live content. “Live and streaming opportunities for advertisers are becoming more popular,” explains Amanda Antosh, Social Media Specialist, Socialyse. “See more brands catching on as this format becomes more accepted and trusted.”

Live streaming requires infrastructure to create and deliver content in real-time. Facebook and Twitter are eliminating these barriers by delivering new tools to produce content while leveraging the scale of audiences on social.

“Facebook Live is clearly a huge potential opportunity for advertisers to reach people in real-time at scale with targeted video ads served in-stream of live content,” explains Sean Cotton, President, Coegi. “Could this Facebook Live eventually rival live TV? Ultimately, Facebook will need to show that it can deliver specific audience reach at scale for brand advertisers to buy into this format.”

Social media as a live content distributor is unlocking new opportunities for brands. New partnerships have the ability to transform the way people consume broadcasts and how brands approach TV and video sponsorships.

“Twitter continues to pick up new live-streaming deals – including a recently-announced new capability that grants access to 1,500 hours of esports competitions – through new partnerships with ESL and DreamHack. This is a big opportunity for advertisers to buy TV-style ads against the live content.” KYLE JACKSON, SVP GROUP DIRECTOR, PERFORMANCE MEDIA, MEDIAVEST | SPARK

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The State of Social Advertising Q1 2017 ©2017 4C Insights, Inc.

4C TIP

4C Social Sync makes coordinating real-time ads on the second screen seamless. Set up takes less than 10 minutes and no additional information, such as a TV schedule, is needed. That makes it very easy to sync social ads with your own TV spots, competitors’ spots, or specific TV moments including program airings and sports. Our solution enables brands to utilize multi-channel advertising as an always-on strategy. Additionally, the 4C Insights Affinity Graph™ combines data from TV and social to help you understand which audiences are most lucrative for your brand. LISA CARAVELLI, ACCOUNT EXECUTIVE, 4C

DELIVERY: MULTI-SCREENINGEqually important to creating the right content is ensuring it is delivered to the right audience in the right context. With 85% of consumers multi-screening, it’s important for brands take advantage of all screens in use to match consumer behavior.

“People are creating a multi-screen experience as they watch TV and post on social media about what they are watching. Advertisers that create an experience around their brand in a similar fashion will see a deeper level of engagement and be able to promote more consistent messaging to their consumer base.” SEAN COTTON, PRESIDENT, COEGI

When consumers see ads across multiple channels, there’s a synergistic effect that drives a greater brand impact than any singular channel. Imagine promoting a Pin about vacation destinations whenever a travel commercial or program airs on television.

A survey we distributed to over 250 of our global clients found that 70% of respondents wanted to

execute social with TV.* Technology is an essential element of delivering successful multi-channel ads.

By automatically triggering its own Facebook ads when competitors ads aired on TV, Nice ’N Easy was able to drive 40% higher video views and blunt its competitors messages. Additionally, Nice ’N Easy achieved lower cost per engagement and cost per view than ads that weren’t coordinated with TV.

“4C’s extensive TV Sync capabilities allowed us to maximise performance by activating Facebook ads only upon our competitors’ advertising their equivalent product line. The initiative performed above expectations, driving 40% more views than standard targeting. Campaign set-up and management was intuitive with training and support provided to ensure a seamless activation.” OSCAR ROMERO, HEAD OF BIDDABLE INTERNATIONAL, PERFORMICS

*4C Insights CRM Survey, February 2017

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The State of Social Advertising Q1 2017 ©2017 4C Insights, Inc.

DELIVERY: DEPLOYING DATAWhen it comes to reaching audiences, nothing has become more important than data. 90% of respondents think social can reach audiences TV cannot.* By implementing insights rooted in data, brands are able to reach audiences other channels cannot.

“We're in an interesting time for social advertising in 2017. At the moment, Facebook and Instagram hold a significant advantage in terms of the scale and targeting availability.” DEBORAH KING, HEAD OF PAID SOCIAL, ESSENCE

Putting this data into upfront planning is essential. Kyle Jackson, SVP Group Director, Performance Media, Mediavest | Spark, elaborates, “Social media teams have access to an enormous amount of audience and affinity data. This is critical for brands to start their planning by tapping into this data to create content that will resonate with their target audiences. Brands are less effective if they treat social creative the same as other digital channels.”

Especially valuable for social advertising is first-party data. Through features like lookalike audiences and the 4C Insights Affinity Graph, brands are able to target current customers and find their next customers through predictive modeling.

For B2B marketers, LinkedIn offers a treasure trove of targeting including job title, company, and more. Layer in 4C affinities on top and you can combine pinpoint accuracy and scale. Sean Cotton, President, Coegi, explains first-party data and custom audiences need to be utilized more in social advertising, “There is some very precise and granular targeting on social platforms due to the richness of the user data. Building on that with the data from your best customers makes it even more powerful.”

In addition to getting ads to the right audiences, data can help brands deliver the optimal messaging for each target audience. “CRM impacts our social advertising strategies by granting us the ability to use our clients’ CRM and DMP data to execute better customer targeting and messaging,” Jackson elaborates. “This data allows us to tailor our message to what the consumer cares about, which leads to significant increases in engagement and ROI.”

*4C Insights CRM Survey, February 2017

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The State of Social Advertising Q1 2017 ©2017 4C Insights, Inc.

4C TIP

There are several ways brands can leverage 4C Affinities and CRM audiences to take paid social to the next level.1. Apply 4C Affinities to your CRM audiences as AND statements to

focus your media on your best customers within your existing CRM.2. Explore your audience and your competitors’ audiences in advance

of campaigns by pulling 4C Affinities to see if it matches with elements you already know about your audience or to find new target audiences.

3. Use filters within 4C Affinities, such as sports, entertainment, and celebrities to build affinity lists that take advantage of unique partnerships and campaigns.

CHRISTIAN WEST, ACCOUNT EXECUTIVE, 4C

4C is a global leader in data science and media technology with solutions for multi-screen convergence. Brands, agencies, and media owners rely on the 4C Insights Affinity Graph™ to identify their most valuable audiences and improve effectiveness across channels. With nearly $1 billion in annualized media spend running through its software-as-a-service platform, 4C offers activation on Facebook, Twitter, LinkedIn, Pinterest, Instagram and Snapchat as well as TV Synced Ads across display, search, social and video. The company also provides paid, earned, and owned media analytics leveraging its Teletrax™ television monitoring network which detects over 400 million TV asset airings on an annual basis. Founded in 2011 and based in Chicago, 4C has staff in 15 worldwide locations across the United States, United Kingdom, the Netherlands, France, Hong Kong, India, and Singapore. Visit www.4Cinsights.com for more information.