Why more competition from digital media hurts TV ad sales

Part 4
Why more competition from digital media hurts TV ad sales (Part 4 of 6)

Social media ad growth comes from retail and consumer services

Retailers and business and consumer services drove social media advertising growth in Q4

In the last article of this series, we discussed how larger reach and new ad formats are driving advertising growth in Facebook (FB), and how advertisers spent 127% more on Facebook than Twitter (TWTR) last year. Here, we’ll discuss the industries driving the social media advertising market growth. According to a report from Resolution Media, media companies and retailers spent the most on Twitter in Q4 2013, while the growth came from the retail and business and consumer services sectors. As per the below chart, retailers boosted their quarter-over-quarter (QoQ) investment by 257% in Q4 in Twitter, while business and consumer services spending increased 361%.

Advertising Social Media Spend by industryEnlarge Graph

Media companies increased spending to incorporate social strategies into their promotion efforts

Over the course of 2013, financial services spending on Facebook and Twitter grew 668% and 27%, respectively. According to Resolution Media, an agency that handles clients such as Pier 1 (PIR), Hertz (HTZ), and FedEx (FDX) for social media advertising, “Media companies increased spend with both social networks over the course of 2013, as they incorporated social strategies more deeply into their marketing and promotion efforts. Twitter cultivated this growth with such offerings as TV Ad Targeting and Nielsen Twitter TV ratings, both of which help advertisers better align Social with TV.”

Softened consumer demand in Q3 2013 forced retailers to cut down on advertising spending

According to the report, from Q2 to Q3, advertisers in retail and technology scaled back their quarter-over-quarter spending on both Facebook and Twitter. The report mentions, “In some cases, within retail for example, the spending decline can be largely explained by softened consumer demand in Q3 and retailers choosing to pull back in preparation for the heavy holiday spending to follow in Q4.”

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