Social media has transformed massively over the last 10 years. Once geared towards teens and young adults, various social media platforms are now commonly used by all age groups. The continued rise in use of social media has led to more companies finding it as another channel to reach consumers with their products. Approximately 88% of people in the US are active on social media and 46% have made a purchase through a social media platform.  Considering how many people are active on social media platforms, it should come as no surprise that companies leverage this channel to promote their products through promoted ads. Social media platforms provide all sorts of data to analyze how ads perform, but how do they compare to traditional ways of reaching consumers? What impact do they have on brand awareness and how influential are they in creating a call to action? To answer these questions, Lab42 conducted a study on social media shopping behaviors for consumers 13+ in the US.

Our data shows that for the most part ads on social media are typically seen by users who already have some level of familiarity with the brand advertised.  That said, some ads simply slip into their newsfeed based on a complex algorithm. When respondents were asked how they came across advertisements for brands on social media, 46% indicated that brands they were not aware of showing up on their feed. A small percentage of social media users may get creeped out (16%) or annoyed (23%) by these types of ads, but more shoppers tend to find them interesting (44%) and even enjoy seeing new brands and products (42%).

As social media platforms continue to expand their reach and an increasing amount of people are using them to shop, the threat of making traditional media channels less effective is becoming more real. Our data shows that people that have ever made a purchase from a social media platform, which our data indicates is 46% of the population, will tend to rely more on social media to discover new brands (76%), as opposed to traditional forms of advertising such as online ads (58%), TV (43%), and print (18%). And when it comes to finding items to purchase through social media, promoted ads were more effective at 46%, than both recommendations from friends/family (38%) and shopping apps (38%).

When it comes to actual purchases, knowing who your audience is and targeting them with ads that are relevant to them continues to be extremely important.  Our research shows that consumers are more likely to purchase on platforms that expose them to ads that they consider most relevant to them and their needs.  However, we need to be careful with over-exposure.  Our research indicates that showing an ad more than 3 times starts having diminishing returns on likelihood to buy.

Shopping on social media will continue to grow, and for marketing agencies and brands looking to leverage this channel, it is important to understand how to cut through the clutter and engage consumers.  Some rules of thumb for more effectively utilizing social media advertising are:

1. Know your audience – demographically but also behaviorally and decide which social media platform is the best to reach them.

2. Ensure that your message corresponds to and is relevant to your target audience. Our data indicates that likelihood to purchase is higher when ads are relevant to the audience.

3. Decide what is the best type of ads to show – photos, videos etc.  Certain format may work better on some platforms but not on others.

4. Determine frequency – our data indicates that after exposing consumers to the ad more than 3 times, likelihood to purchase starts diminishing.

Interested in learning more about our social media research or testing out ad concepts? Connect with our team to learn more about how we can help your company determine the best ad for your goals and download the topline report by entering your information below.