The ad dollars are starting to move, and this is only the beginning.
Social media is now responsible not just for demand generation, but also demand fulfillment. People are using social media to find what they want as well as make purchasing decisions.
According to a new Forrester study, social networks are now the preferred method of discovery for a third of all people in the United States. Meanwhile, only 18 percent of people have found desired websites via sponsored search results.
Despite these numbers, paid search budgets in the U.S. will total nearly $20 billion in 2013, while social media is only expected to cross the $4 billion mark. So it makes sense that 64 percent of marketers plan to increase their social media spend in the next year.
The new consumer mindset is: I don't want to spend time searching for what I want; I want it to find me. Social platforms are perfect for this, because relevant products and services find their way into your feed based on your social graph (friends), interest graph (what you like)—and more recently purchase intent.
With Facebook's Custom Audiences tool, you can target people based on their opt-in email or phone number. This has proven quite successful—after JackThreads uploaded its 2 million emails to Facebook and targeted posts to those users, it increased sales 26 percent.
Better yet, a brand-new study shows that the most effective way to reach people based on transaction intent is by retargeting on Facebook. When showing users native newsfeed ads for products or services that they've considered buying on the brand's website, the click-through rate increases 21 times and cost per click decreases 20 percent as compared with traditional Web retargeting.