Demandware says 30 of its clients booked more than $100 million in online sales in 2015, up from 22 a year earlier.
Retailers leverage what social networks know about their users to target shoppers with ads.
Social media accounts for 20% of the time consumers spend on PCs and 30% of their time on mobile devices, according to a recent The Nielsen Co. report.
And there's a lot of information flowing on Facebook, Twitter and the like. "It's a virtual Times Square," Rebecca Lieb, digital advertising analyst at research and advisory firm Altimeter Group, says. But unlike Times Square's marquees, ads on Facebook and Twitter can be targeted squarely at particular shoppers based on the information they share or what they've looked at on another site. That helps explain why social media ad spending is skyrocketing. Research firm eMarketer forecasts marketers will spend $4.81 billion on social media advertising this year. And 64% of marketers plan to increase their social media ad spending this year—including 31% who plan to increase their social media budget by more than 10%, according to a new report by Nielsen and its subsidiary Vizu.
Among retailers specifically, 64.1% plan to boost social media marketing spending this year, according to a survey in the Social Media 300, an Internet Retailer research guide that ranks retailers by the percentage of traffic to their web sites from social networks.
The reason for marketers' interest in social is obvious, say advertisers. "Everyone is on social media—or almost everyone," Ger McNamee, president and co-founder of hockey apparel retailer Gongshow Gear Inc., says. "If we want to get people to know our brand we have to be there too."
To ensure that it isn't just present, but actually capturing consumers' attention when they're on Facebook and Twitter, Gongshow Gear uses both Facebook and Twitter ad units.
Without the ads, a Facebook user typically only sees about 16% of the content his connections post on the social network, according to a report from web measurement firm comScore Inc. Facebook selects what it believes are the most relevant posts to display in the "Top Stories" section of an individual's news feed. While Twitter doesn't share the average tweet's lifespan, marketers say that consumers' Twitter timelines move so rapidly that often posts only live for a few minutes in the easily viewed part of the timeline before a consumer has to scroll down to see the message. Paying for a Facebook Promoted Post or Twitter Promoted Tweet means Gongshow Gear's messages stay at or near the top of users' feeds until the number of impressions it's paying for is achieved.
Paying to promote a post or tweet is just one way retailers are leveraging the slew of social media ad units offered by Facebook and Twitter. On Facebook alone retailers can buy ads nearly everywhere a consumer might look—from display ads that appear on the right side of the screen for consumers on a PC, to ads that appear in the news feed or on the social network's log-out screen. On Twitter advertisers can pay to promote a tweet, promote their account so it appears in Twitter's Who to Follow box or promote their brand message in the Trends box, which highlights what users are posting about on the microblogging service.
The array of ad units and targeting options can be daunting, but retailers that take the time to comprehend the options are generating positive results.
A retailer that produces good social media content almost can't afford not to advertise, Lulu Gephart, head of digital engagement at outdoor apparel and goods retailer Recreational Equipment Inc., says. Paying to promote its posts—both on Facebook and Twitter—gives marketers a degree of control over the spread of its messages and enables them to target consumers outside their fan bases who otherwise would rarely see the message.
Gephart's found that without using Facebook's Promoted Posts, posts that she considered compelling reached only 8% of the brand's more than 500,000 fans. That makes it hard to justify the staff time involved in crafting the content.
That's why REI paid to raise the social visibility of its content last holiday season when it launched a social media content marketing campaign that highlighted its sales associates' skill at helping shoppers find the perfect gift. It used both Facebook and Twitter to promote its posts to its fans, friends of its Facebook fans, people whose activities on the social networks suggested they're outdoorsy and consumers on mobile devices.
It also ran a Twitter Promoted Account ad campaign to attract new followers. The Promoted Tweets and Accounts efforts worked together: The Promoted Account placement helped REI first acquire new followers, then Promoted Tweets made sure they—and REI's existing followers—saw REI's messaging.
When it rolled out the program, called #giftpicks, the retailer asked shoppers to submit their gift-related queries to the retailer on Facebook and Twitter. It then shot short videos of store associates answering those questions and showing off their product suggestions. The filmed associates addressed the person who submitted the question by name or Twitter handle, adding some personalization to the video. Over the course of three days, REI produced 90 videos, which it posted on YouTube, shared on Facebook and Twitter, and supported with Facebook Promoted Posts and Twitter Promoted Tweets.
Thanks in part to its advertising, several of the REI videos were watched thousands of times on YouTube. Even more importantly, referring traffic from social media to REI.com doubled during the campaign.
Setting the target
Key to any such paid social media marketing campaign is targeting. Both Facebook and Twitter have sought to make it easier for an advertiser to reach increasingly specific groups of people based on their social connections, interests and, in the case of Facebook, whether a consumer has interacted with the brand off of Facebook.
The off-Facebook connection is part of Custom Audiences, a targeting tool the social network launched last year that works with most Facebook ad formats. It lets advertisers target customers based on information shoppers have shared with the marketer off of Facebook, such as their e-mail addresses, phone numbers and, for game and application developers, their user names. The advertiser need not share any personally identifiable data with Facebook.