Social Advertising Trends in Retail: A 2020 Perspective

Social Advertising
Trends in Retail:
A 2020 Perspective
A 2020 eTail Report

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Social Advertising Trends in Retail: A 2020 Perspective

Executive
Summary
Retail spending on social Nonetheless, many retailers still
advertising has only continued to face barriers to building successful
grow over the past several years, social advertising campaigns.
just as the targeting algorithms Content creation and curation,
inherent in social advertising aligning teams toward common
platforms have only become goals, and time-consuming manual
more refined and effective — processes are all challenges that
almost legendary. But it isn’t just will require new solutions in 2020.
the social media giants who are
driving a continuous increase in In this report, you will learn why
digital advertising budgets. retailers from various sectors
are succeeding with their social
Retailers themselves have advertising campaigns and how
harnessed powerful new tools to they intend to spend their ad
make the creation, deployment, dollars in 2020. You will also
and measurement of social learn what their bottlenecks are
media ads more streamlined and and how they plan to tackle them
effective. They’ve also discovered with new tools and processes to
new and innovative ways to employ to improve their return on
encourage their creative and ad spend.
advertising teams
to collaborate.

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Social Advertising Trends in Retail: A 2020 Perspective

Key Findings
A significant portion of marketers’ budget is dedicated to
1 social: 50% of marketing teams spend at least half of their
marketing budget on social advertising.

Nearly every company surveyed buys Facebook ads (96%), and

2 36% of these companies spend more on Facebook advertising
than on any other social media channel. Facebook produces the
best ‘return on ad spend’ (ROAS) for more of these companies
(41%) than any other social media channel.

Most companies plan to increase their advertising spend

3 on Facebook (96%), LinkedIn (61%), and Twitter (56%) in
2020. Nearly one-quarter of these retailers (22%) will increase
spending on Instagram as well.

61% of companies claim social advertising creation and

4 delivery involve time-consuming manual processes. Almost half
of the companies surveyed (48%) feel their social advertising and
creative teams don’t collaborate effectively.

Most retailers will spend more on social advertising in 2020

5 compared to 2019 (52%) and most will ensure their social
advertising and creative teams will work more closely in the
coming year (51%).

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Social Advertising Trends in Retail: A 2020 Perspective

About the Study

Does your company spend money on social advertising?

100
100%

50

Every respondent surveyed in the study

represents a company that is currently
0
0%
spending money on social advertising.
YES NO

The retail companies involved in retail (11%); sporting goods

the study come from a variety of (11%); department stores (10%);
retail sectors. A plurality represents entertainment, food, and travel
the apparel industry, at 23%. (8%); supermarkets (6%); and
toys & hobbies (5%). None of the
Other sectors represented in the respondents represent any sectors
study include home furnishing that weren’t listed and there are
(13%); hardware, electronics, no respondents representing the
and appliances (13%); specialty telecommunications sector.

Which retail sector are you in?

Apparel
23%
Home Furnishing
13%
Hardware, Electronics, and Appliances
13%
Specialty Retail
11%
Sporting Goods
11%
Department Stores
10%
Entertainment, Food, and Travel
8%
Supermarkets
6%
Toys & Hobbies
5%
Other 0%
Telecommunications 0%

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Social Advertising Trends in Retail: A 2020 Perspective

What is your role?

Brand Marketing
31%
eCommerce / Sales
30%
Creative / Design
20%
Product Marketing
11%
Performance Marketing
7%
Digital Advertising
1%
Other 0%

C-Suite / Executive 0%

The majority of respondents are (11%), performance marketing

in brand marketing roles (31%) or (7%), and digital advertising (1%).
eCommerce and sales roles (30%). This study did not survey any
Exactly one-fifth of respondents professionals in a C-suite or
(20%) are part of the creative executive roles, although every
and design department at their respondent is part of a company
companies. Fewer respondents that generates over $200 million
occupy roles in product marketing annually from online sales.

How much annual revenue does your company generate from online sales?

100
100%

50

0
0% 0% 0%
Under $50 million – $100 million – $200 million +
$50 million $100 million $200 million

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Social Advertising Trends in Retail: A 2020 Perspective

U.S. retailers continue to allocate

large portions of their marketing
budgets to social advertising ads —
Facebook, Inc. is a clear winner.
Social advertising has been an on the platforms, which can grant
essential marketing investment for marketers unparalleled access to
retail companies of all sizes over highly targeted user segments.
the past decade.
After years of experimentation and
According to a 2019 study improvement, many companies
commissioned by the have managed to refine their
Interactive Advertising Bureau advertising processes to reach
(IAB) and conducted by a certain level of maturity when
PricewaterhouseCoopers, digital it comes to allocating ad spend,
ad revenue in the U.S. surpassed building creative assets, and
$100 billion for the first time in optimizing their ad campaigns.
2018, a 21.8% jump from full-year Many more companies are
digital ad revenue in 2017 [1]. Much discovering the benefits of digital
of this ad spend is being spent advertising for the first time.
on platforms like Google Ads,
but social media platforms like Nonetheless, even established
Facebook, LinkedIn, and Instagram enterprise companies are facing
are also receiving significant challenges in optimizing their social
portions of corporate advertising advertising, as the results of this
budgets. This is primarily because study will reveal.
of the powerful algorithms at play

What percentage of your overall marketing budget is currently dedicated

to social advertising?

0% – 10%
0%
11% – 25%
25%
26% – 49%
25%
Roughly 50%
28%
51% – 75%
21%
76% – 90%
1%
91% – 100%
0%

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Social Advertising Trends in Retail: A 2020 Perspective

D I D YO U KN OW ? Half of the companies represented companies surveyed spend either

in the study currently spend more 11% – 25% (25%) or 26% – 49%

50% than roughly 50% of their overall

marketing budgets on social
advertising, with 1% of respondents
(25%) of their budgets on social
advertising. None of the companies
surveyed spend less than 11% of
of marketing teams allocating 76% – 90% of their their marketing budgets on social
spend at least half marketing budgets to social advertising.
advertising. The other half of the
of their marketing
budget on social
On which platforms are you currently buying social media ads?
advertising.
Facebook
96%
LinkedIn
I N 2020 76%

96%
Twitter
75%
Instagram

of marketing teams 59%

plan to increase
Snapchat
33%
their budgets on Pinterest
16%
Facebook. 

Facebook is by far the leading They also appear to favor those

social advertising platform based platforms that have the most users
I N 2020 on allocation of ad spend. At 96%, and the widest reach.
almost all the companies surveyed

52% in this study are currently buying Based on a 2019 study by Pew
social media ads on Facebook. Research, Facebook, YouTube, and
LinkedIn and Twitter are about Instagram are the most widely used
of marketing teams equal in their popularity, with 76% of social networks in the United States.
Most of the U.S. adult population
will spend more on companies advertising on LinkedIn
uses Facebook, at 69% of U.S.
and 75% advertising on Twitter.
social advertising adults. But different demographics
A majority of respondents (59%) say favor different platforms. For
than they did in 2019. they are buying ads on Instagram, example, Pew Research’s study
which is owned by Facebook, also found that 73% of consumers
Inc. and uses the same targeting aged 18 to 29 use Snapchat and
technologies. Meanwhile, one-third 75% of the same demographic use
of respondents are buying ads on Instagram.[2] Meanwhile, Instagram
Snapchat and 16% are buying ads reports that over 500 million people
on Pinterest. use its Stories feature every day.[3]

As we will see, retailers intend to Retailers must, therefore, pay close

increase their ad spending with attention to demographic targeting
platforms that have provided them in addition to reach, algorithmic
with the best returns historically. maturity, and cost factors when
choosing social advertising
platforms in 2020.

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Social Advertising Trends in Retail: A 2020 Perspective

On which single platform are you spending the most on social ads?

Facebook
36%
LinkedIn
22%
Twitter
13%
Instagram
29%
Snapchat
0%
Pinterest
0%

When asked about which platforms According to CNBC, just three

receive the most of their ad companies — Amazon, Facebook,
spend, not surprisingly, a plurality and Google — are expected to take
of respondents (36%) say they in nearly 70% of digital advertising
are spending the most social spending in the U.S. by 2021.
advertising dollars on Facebook. Facebook alone is expected to
Facebook-owned Instagram is the hold 22.1% of digital ad spending
second most popular, with 29% of once results are tallied for 2019 [3],
respondents claiming they allocate making it the most popular social
the most social advertising dollars advertising platform in the world.
to the platform.
Meanwhile, less than a quarter of
This means the Facebook, Inc. the companies (22%) surveyed
social media ecosystem receives are spending the most social
the most social media ad spend advertising money on LinkedIn ads
from 65% of the companies and 13% are spending the most
surveyed in this study. This trend money on Twitter.
mirrors overall trends in the digital
advertising industry, especially
in terms of which platforms are
considered the most popular and
the most effective.

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Social Advertising Trends in Retail: A 2020 Perspective

Retailers will increase their ad

budgets on platforms that have
a history of high performance.

FAC E B O O K From which single platform are you seeing the best ‘return on ad spend’
(ROAS) from your social advertising?

96% Facebook
41%
of respondents LinkedIn

expect to increase 19%

their advertising Twitter

19%
spend on Facebook Instagram

in 2020. 21%
Snapchat
0%
Pinterest
0%

Nearly half of respondents (41%) Researchers sought to determine

see the best return on ad spend how companies expect to adjust
(ROAS) through Facebook, and their social advertising budgets
respondents claim it as the best in 2020. Given what respondents
platform for ROAS. Another 21% revealed about their preferred
see the best ROAS from Instagram. platforms, the results of this query
Therefore, 62% of respondents see mirror their previous responses.
their best return through Facebook,
Inc.’s platforms. The vast majority of respondents
(96%) expect to increase their
Meanwhile, an equal number advertising spend on Facebook
of respondents are seeing the in 2020. None of the companies
greatest ROAS from both Twitter surveyed expect to decrease their
and LinkedIn, at 19% for each. spending on Facebook Ads, and
only 4% said Facebook advertising
doesn’t apply to them.

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Social Advertising Trends in Retail: A 2020 Perspective

On which of the following platforms do you plan to increase or

decrease your advertising spend in 2020?

We will increase spending. We will decrease spending. We will do neither / this doesn’t apply.

120

96%
100
84%

80 72%

61%
60 56%

40
26%
23% 22%
20 16% 18% 16%
12% 10%
4% 6%
0
Facebook LinkedIn Twitter Instagram Snapchat Pinterest

The results regarding Instagram Facebook. This suggests retailers

are noteworthy in this question. are confident in Facebook Inc. as
Previously, we learned that 29% of an advertising platform as a whole,
respondents are currently spending but they are using Instagram and
the most advertising money on Facebook itself to reach different
Instagram and 21% claim they customer segments.
receive the best ROAS through
the platform. Although fewer Finally, ad spending on Snapchat
respondents intend to increase and Pinterest is not expected to
their spend on Instagram in the see much movement in 2020, as
coming year (22%) than on other 72% of respondents say they won’t
platforms, not a single respondent adjust their spending on Snapchat
said they would decrease their and 84% say the same of Pinterest.
spending on either Instagram or

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Social Advertising Trends in Retail: A 2020 Perspective

Manual processes and a lack

of collaboration between
advertising and creative teams
are retailers’ biggest pain points.
Researchers sought to determine Does your team currently use automation
how respondents are creating technology for its social advertising
creation and delivery?
and delivering their social media
ads. Specifically, they wanted
to determine if companies are 1%
still being encumbered by time-
consuming manual processes
and collaboration difficulties. 16%

Despite the emergence of new

advertising tools, automated 18%
65%
processes, and UX updates to
various ad platforms, a majority of
companies (61%) say their social
advertising creation and delivery
involves manual processes that are
often time-consuming. Only 39% of No—but we are interested in
automating at least part of this
respondents have overcome such process.
manual processes or are otherwise Yes—we automate at least part
not experiencing them. of this process, but it needs
improvement.
Yes—we automate this process
Do you agree with the following sufficiently and successfully.

statement? No—and we are not interested in

automating any part of this process.

“Our social advertising creation and

delivery involves manual processes that
are often time consuming.” To delve deeper into this trend,
researchers asked companies if
they are currently using automation
technology to create and deliver
social media ads. When compared
to respondents who say they are
39% struggling with manual processes
NO 61% (61%), the results are very similar.
YES Most respondents (65%) say they
do not currently use automation
technology but are interested in
automating at least part of their
process. Only 1% of respondents
are not using automation and are
not interested in it.

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Social Advertising Trends in Retail: A 2020 Perspective

Meanwhile, 16% of respondents say they don’t intend to increase the

they automate social advertising usage of either, or that the question
creation delivery successfully doesn’t apply to them.
and 18% say they are using the
technology, but their process needs
improvement. Do you feel your social advertising and
creative teams collaborate effectively in all
In total, 83% of companies are stages of the marketing process?
either interested in automating at
least part of their social advertising
process or they’d like to improve
their existing process.

Which type of visual asset does your team 52% 48%

plan to increase usage on THE MOST in YES NO
2020?

10%

43% Collaboration between social

47% advertising and creative teams
appears to be a challenge for many
of the companies surveyed in this
study. Although a slight majority of
companies (52%) say their teams
Static creative (e.g., photos, images) collaborate effectively in every
Dynamic creative (e.g., animations, videos) stage of the marketing process,
Neither / This does not apply almost half (48%) say they do not.
This is a significant portion of
companies whose teams are not
Social advertisements often involve collaborating successfully.
visual creative assets. In the past,
most social ads relied on a static Collaboration between
image to garner users’ attention departments is often a challenge
and convince them to click the ad, because each team has its own
but dynamic creative assets like ideas for which strategy will be
animations, videos, and GIFs are more successful. They may even
becoming more prominent. have difficulty coming up with goals
and executing ad campaigns on
The results of the study are a timeline. As one eCommerce
reflective of this trend. Almost half sales professional from a specialty
of respondents (47%) say their retailer puts it, “Developing an
social media team plans to increase effective social media strategy by
usage of dynamic creative in 2020, considering all the suggestions
while 43% plan to continue using of both the teams creates a
static creative like photos and collaborative challenge.”
images. Only 10% of companies say

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Social Advertising Trends in Retail: A 2020 Perspective

Pain Points: In
Their Own Words
Researchers asked retail companies how time-consuming manual processes
and a lack of collaboration between their social advertising and creative
teams were causing them to struggle with social advertising.

Concerning manual processes, their qualitative responses indicated that

forming a strategy, responding to customer inquiries, and choosing digital
tools were all time-consuming. However, the most prominent pain point was
the time-consuming process of creating and publishing content.

“Content planning “Creating content the

is manual and does way the audience
take up a lot of time.” likes is one manual
- Brand marketing professional, process that
apparel challenges social
advertising and
“Content creation delivery.”
is the most time- -C reative and design professional,
consuming part as hardware, electronics, and
appliances
it’s a long procedure
from planning, web
to post.” “Choosing creative
-e  Commerce and sales content and finalizing
professional, home furnishing the publishing of the
content is a time-
consuming process.”
“Although we have
multiple tools to -B rand marketing professional,
home furnishing
work on content, the
most time-consuming
process is strategy
formation.”
- Creative and design professional,
home furnishing

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Social Advertising Trends in Retail: A 2020 Perspective

Concerning collaboration, their qualitative responses indicated that time

constraints, agreeing to specific goals and strategies, and, again, finalizing
content were their biggest pain points:

“It’s challenging to “Having both the

co-develop strategies teams find sufficient
for the departments time to discover and
to work together.” create interesting
- Brand marketing professional, content.”
home furnishing
- eCommerce and sales
professional, home furnishing

“Goal setting, as
everyone has a “It’s difficult to keep
different idea of a up with the ever-
goal and how to changing content
achieve it.” demand of social
-e
 Commerce and sales media for both the
professional, department store teams.”
-C
 reative and design professional,
department store

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Social Advertising Trends in Retail: A 2020 Perspective

Team collaboration and

increased ad spend are
retailers’ key objectives
in 2020.
Please indicate which of the following statements are true in
terms of your plans for 2020.

We will spend more on social advertising in general than we did in 2019.

52%
Our social advertising and creative teams will work together more closely.
51%
We will expand our marketing team to better manage social advertising.
47%
We will invest in more robust social advertising tools.
39%
We will manage social advertising in-house.
39%
Our marketing team’s KPIs will change.
35%

Finally, researchers asked companies expect to spend more

respondents to indicate how they on Facebook advertising alone.
will change their social advertising Additionally, very few respondents
plans in 2020. Respondents said they are planning to decrease
were given a choice of multiple ad spending on any of the
statements and asked to select platforms listed in this study.
all that applied. Most companies
are planning to spend more on Almost half of respondents (47%)
social advertising than they did expect they will expand their
in the previous year (52%) and marketing team to better manage
will take steps to help their social social advertising and 39% say they
advertising and creative teams will invest in more robust tools. This
work together more closely (51%). would suggest many companies
are learning that increasing their
The answers to previous questions ad budget itself isn’t necessarily
are reflective of these statements, the best way to improve ROAS.
as collaboration is clearly a Investing in new strategic and
challenge for almost half of the creative capabilities can lead to
companies surveyed (48%) and faster deployment of ads. It can
most companies previously also improve collaboration between
indicated they will spend more on teams and generate more effective
social media ads in 2020 — 96% of ads overall.

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Social Advertising Trends in Retail: A 2020 Perspective

For example, when respondents advertising and only 35% of

who aren’t using automation tools respondents said their marketing
were asked what they would team’s KPIs will change. This would
have their teams do if automation suggest their goals for social
allowed them extra time, one advertising are remaining the
product marketing professional same, but their processes are apt
at a hardware, electronics, and to change.
appliances retailer said they could
“create stronger goals and align Clearly, although retailers are
them effectively to avoid friction interested in increasing their
between the support teams.” spending on social media ads,
Another creative and design there remains some work to do
professional at a department store internally. New automation and
claimed such tools could “provide collaboration tools, as well as
more focus on the analytical more effective processes for
results of viewers and drive new creating and delivering content,
content solutions.” will be essential in the coming
year if retailers intend to improve
Last, 39% of companies say the effectiveness of their social
they will switch to an in-house advertising campaigns and
management model for social increase their return.

Sources:
1. IAB. “IAB internet advertising revenue report: 2018 full year results.” May
2019. Prepared by PwC. https://www.iab.com/wp-content/uploads/2019/05/
Full-Year-2018-IAB-Internet-Advertising-Revenue-Report.pdf

2. Perrin, Andrew. “Share of U.S. adults using social media, including

Facebook, is mostly unchanged since 2018.” April 10, 2019. Pew Research
Center. https://www.pewresearch.org/fact-tank/2019/04/10/share-of-u-
s-adults-using-social-media-including-facebook-is-mostly-unchanged-
since-2018/

3. Hutchinson, Andrew. “Instagram Stories is Now Being Used by 500

Million People Daily.” Jan. 31, 2019. Social Media Today. https://www.
socialmediatoday.com/news/instagram-stories-is-now-being-used-by-500-
million-people-daily/547270/

4. Graham, Megan. “Digital ad revenue in the US surpassed $100 billion for

the first time in 2018.” May 7, 2019. CNBC. https://www.cnbc.com/2019/05/07/
digital-ad-revenue-in-the-us-topped-100-billion-for-the-first-time.html

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Social Advertising Trends in Retail: A 2020 Perspective

About the Authors

Our co-founders Tuomo Riekki we work with over 600 brands from
and Kristo Ovaska are serial various industries: e-commerce,
entrepreneurs who, back in 2013, retail, travel, agencies, and
noticed how advanced marketers many more. From coding custom
were starting to ramp up their solutions during client meetings
Facebook advertising, and started to inviting our customers to our
building automation software to strategy offsites, we stay close
help brands launch and optimize to our customers to influence the
campaigns faster and easier. By product we are building. We are
the time Smartly.io was up and on the mission to unlock greater
running, e-commerce brands performance and creativity.
had discovered Facebook – their
complex needs and setups were For more information, please visit
the perfect fit for Smartly.io. Today, smartly.io.

We launched eTail in 1999, and executives being inspired whilst

have been dedicated to supporting learning and developing their
the growth of the retail industry company as well as their careers.
ever since. What started off as 100
people in a room discussing where For more information, please visit
this sector is headed, has led to etailwest.wbresearch.com
2,000 senior-level eCommerce

WBR Insights is the custom our mission is to help global

research division of WBR institutions across a variety of
(Worldwide Business Research), industries to inform and educate
the world leader in B2B focused their key stakeholders while
conferences. From research-based achieving their strategic goals.
whitepapers to benchmarking
reports, infographics and webinars, For more information, please visit
www.wbrinsights.com

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