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Under Facebook's Long Shadow, Pinterest Grows

By STRATA November 25, 2014 | 11:10am

It comes as no surprise that Facebook is the most popular social media platform for STRATA’s agencies as 89% of them plan on using it in client campaigns, according to the most recent STRATA Agency Survey from 2Q14.

While that is the third highest amount for Facebook seen in the survey since 2008, the real news is about Pinterest. While not attention-grabbing like Facebook and Twitter, Pinterest is currently experiencing its largest year-to-year growth, jumping up 31% this year from 2Q13. 

Part of the story behind Pinterest’s growth is their approach to target advertising. With Pinterest, agencies know their advertisements actually reach their target audience. Earlier this year, STRATA President Joy Baer wrote in AdExchanger that Pinterest’s strategy of seeking high CPMs between $30 and $40 with commitments over $1 million aimed high but was reachable. 

Why? Because Pinterest employs a “high, high, low” approach to advertising: high quality, high engagement, low volume. Joy argued that since Pinterest ensures that ads on their site appeal to users, advertisers will follow suit. The impressive thing is that Pinterest can accomplish this without diluting the user experience. 

Stepping back from Facebook and Pinterest, our recent survey also found that YouTube is the second most used for social media campaigns (53%), followed by Twitter (50%) and LinkedIn (36%).

Within the industry, Facebook’s ad potential is most often contrasted against Twitter’s. Our internal data on Twitter and Facebook ad buys processed by our systems mirror the sentiment of ad agencies, with $0.43 spent on Twitter for every $1.00 spent on Facebook for the first six months of 2014. While still far behind Facebook, Twitter’s ad spend (as compared to Facebook) has increased steadily since 2012. In 2013, that number was $0.33 on Twitter to every $1.00 on Facebook. In 2012, it was $0.30 to $1.00.

Overall, however, the social budgets are still relatively small compared to other advertising mediums. According to our survey, 61% of agencies say they allocate no more than 5% of their overall budget for paid social media. 26% of agencies spend between 6-10%. In terms of execution, 60% of agencies say they don’t use social media ad exchanges, while a quarter of agencies say they use it less than 5% of the time. 

We’ll be watching where social prices go from here. The increased competition between social sites and the niches they fill ensure that this is an ongoing and changing story for the advertising industry.

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