PMG Portfolio Trends: Brands Move to Diversify Social Investments

Growing demands for privacy are reshaping the social media landscape, and with consumption habits fluctuating from static feeds to ephemeral messaging and short-form video, social media is entering a new era. To navigate this sea-change, advertisers are fortifying their media investment strategies through diversification, helping their brands achieve optimal reach and engagement across a variety of social platforms. To better understand these shifts, the PMG team took a closer look at advertiser sentiment surrounding each platform, as well as how brands across our client portfolio have modified their investment strategies throughout the pandemic and the acceleration of digital trends including ecommerce, social commerce, and more. 

Across PMG’s portfolio, Facebook remains the strongest revenue-driving platform in the social media ecosystem thanks to its global audience and reach, advanced ad-buying platform, brand safety measures, and competitive pricing for campaigns. In recent months, Apple’s privacy updates have had a significant impact on costs and conversion algorithms across Facebook and Instagram, making some programs less efficient year-over-year along with performance volatility. 

Related: Third Quarter Big Tech Earnings Shed Light on Privacy Impact

In like manner, increased competition from more advertisers year-over-year has added to increases in cost. While brands aren’t yet pulling back spend from Facebook or Instagram despite these headwinds and mounting pressure from recent media leaks, we are seeing brands invest more in social advertising outside of Facebook, allowing brands to adopt new platforms into their media mix.

Twitter maintains its status as the go-to platform for engaging in real-time news and conversations. Though in recent months, the company has worked to evolve its strategy by making significant investments in monetizing the creator economy. With new features like Twitter Blue, the company’s first-ever subscription offering, and the acquisition of newsletter company Revue, Twitter is aiming to be the home for content creators, as it competes against Clubhouse, Discord, and Patreon to help creators engage and grow their communities all in one place. 

For brands, this strategy shift takes the form of Twitter’s Shop Module, which helps users find products from their favorite brands via product carousels on Twitter profiles. Lower-funnel advertising capabilities remain limited within the platform, but given the real-time nature of Twitter user behavior, the platform continues to be used by brands looking to engage in conversations around key moments. 

“​​We see Twitter as a useful source of whitespace away from the competition,” said Carly Carson, social director at PMG. “In recent months, our social team has seen some retail brands successfully expand into Twitter for conversion-driving activities during times when ad auctions competition across other platforms were high.”

Reddit is home to hyper-engaged communities across thousands of subreddits where millions of users share their opinions, favorite memes, and expertise. Some subreddits, such as r/wallstreetbets, made headlines recently by demonstrating the growing influence of online communities over real-world financial markets and events. For advertisers, Reddit’s self-serve, auction-based advertising platform is on par with the capabilities seen within other social platforms, letting advertisers target ads to specific communities and interests.

With Reddit’s emphasis on user-generated content, the company has made impressive strides in developing industry-leading brand safety controls to help Reddit become an attractive opportunity for brands seeking to diversify their media spend away from Facebook or Instagram and into a platform with a highly engaged audience. 

Pinterest benefited from a surge in consumer interest in DIY, cooking, and starting new hobbies throughout the pandemic, leading to impressive user growth. Coupling consumer behavior with the platform’s ethos of providing a safe and positive place for users, Pinterest has seen increased interest from brand advertisers during the last 18 months. More recently, the rollout of Pinterest’s social commerce capabilities has super-charged advertiser interest, as the features let users seamlessly search and shop products on the platform. Social commerce is a natural extension of the Pinterest user experience, giving the company a competitive advantage over other social platforms where tapping into keyword-based intent has historically been more complicated. 

“We expect Pinterest to serve an always-on role within the media mix for many retail and ecommerce brands for the foreseeable future as the platform continues to advance its full-funnel offerings through the expansion of shoppable units, immersive features like Idea Pins, and feed-based ad offerings,” said Carson.

Snap leads the market in AR capabilities thanks to its robust library of lenses, with integrations like Virtual Try-Ons helping Snap become a popular shopping destination. Scripted content hosted on Snap has surprisingly strong viewership, with millions of users tuning in weekly to premium shows like E! News Rundown and celebrity shows like Off the Leash with Meg Thee Stallion. Snapchat is mainly considered for upper-funnel tactics, as brands usually don’t utilize Snap campaigns to drive revenue. 

“For some retailers, Snap has become a top performer, with brands shifting investment originally ear-marked for Facebook into Snap,” said Melissa Hastings, associate director of social at PMG. “In the past 12 to 18 months, we’ve seen brands test into Snap for direct response and dynamic creative campaigns.”

TikTok continues to impress with astronomical user growth — across all age demographics — and time spent in-app continuing to rise as well. The TikTok team maintains that for brands to succeed on the platform, they need to make TikToks, not ads, as unique creative and engaging personalities via in-app talent serve as cornerstones to TikTok’s global success. This summer, the “TikTok made me buy it” craze took the world by storm, with brands utilizing tactics like Live Shopping and creator partnerships to help products fly off shelves. Recent collaborations with Shopify and Walmart support the popular theory TikTok aims to be a true shopping destination and leader in social commerce. 

“Influencer content has proved to be a critical component to any brand’s paid social strategy on TikTok,” said Danielle Dirkx, social account supervisor at PMG. “Through strategic talent identification and paid amplification, brands have the opportunity to reinvent their brand voice and how they engage with users in a way other platforms aren’t able to match. Influencer marketing is definitely on the rise overall, but has emerged as a core component that can drive impact on TikTok.” 

For advertisers eager to test into the platform, it’s important to remember that TikTok burst onto the scene nearly ten years after Facebook, meaning that the platform has a lot of catching up to do to match competitors’ sophistication. TikTok auction capabilities are still limited relative to the competitor set, and high-impact units like Hashtag challenges and one-day TopView Takeovers can come at a premium price. 

“While TikTok ad auction capabilities are still limited compared to other platforms, the speed at which TikTok is making updates and improvements to the TikTok ads manager matches the rate at which TikTok took off in popularity, which was insanely fast,” said Dirkx. “Currently, TikTok is a strong player for mass reach and awareness support, but very quickly TikTok could match Facebook in full-funnel impact with the recent addition and continuous improvements to TikTok’s dynamic offerings.” 

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While Facebook remains the top revenue-driving platform for advertisers across the social media ecosystem, each platform has a unique opportunity to engage users (and advertisers) in a unique way. As competitors like TikTok and Snap emerge as true contenders against Facebook’s dominance in the U.S. due to the popularity of messaging and viral content, platforms like Pinterest, Reddit and Twitter continue to see slow and steady growth thanks to a focused effort on engaging select, niche audiences like creators, DIY enthusiasts, fashionistas, gamers, and news enthusiasts versus the masses. 

As advertisers assess the best path forward amid the headwinds facing the industry — from increased costs to the deprecation of the cookie, walled gardens, and evolving consumer expectations — PMG has seen investment diversification across social platforms and tactics to be one of the most effective strategies for maintaining optimal reach, relevance, and engagement.