While traditional advertising and social media were developed to serve separate marketing functions, the line between the two is beginning to blur. Social spend has been primarily a community building activity, while advertising spend has been focused on lead generation. However, this separation has become less delineated as advertising is now available in social media, specifically using paid endorsements or sponsored posts. Furthermore, the rise of user-generated content (UGC), and thus the power of organic endorsements, has greatly altered the traditional advertising landscape.
Spending on social media outlets currently represents nine percent of marketing budgets and is expected to increase to more than 13 percent over the next 12 months, according to a Duke University study. In the next five years, that percentage is projected to rise to more than 21 percent. With this investment in social media, brands are making an equally important investment in UGC, an invaluable treasure trove of original content created by a brand's biggest fans.
Original customer content has huge potential to establish trust and credibility with a brand's fans, customers and prospective customer base; and even more importantly, affect sentiment. As a result, marketing executives are making adjustments to how their advertising budgets are allocated to account for UGC.
Generating conversations through social is key to expanding brands' reach, scale and ultimately conversions, with their most engaged fans. According to eMarketer, approximately 189.9 million people in North America are users of social networks this year, representing a substantial audience and a hotbed of potential for marketers. Social networks such as Twitter, Facebook and Instagram create strong listening tools for companies to gather valuable insights from their targeted audiences.
In order to do this, brands should activate campaigns with a hashtag and create a feature area like an online social hub and/or a social display at venues to curate and display the best content. Social hubs allow fans to connect with fellow fans, as well as incentivize users to share the most original and creative content, in order to see it featured across brand platforms. With the development of this content comes the development of a brand community as submissions to the hashtag are shared with friends and family, solidifying endorsements of the product or service. As a result, the ability to share content through social media creates a seamless and trustworthy method for followers to display their allegiance to a brand and encourage others to join.
Incorporating social media into a campaign opens up two-way communication and engagement between a brand and consumer like never before. In comparison, traditional advertising campaigns provide a one-sided view of the brand for consumers to take in, accept and hopefully take action, i.e. showing up to an event, purchasing a product or service, etc. With social, fans can share how they're feeling, provide their opinions, ask questions and make purchases through shoppable media. Today, 32 percent of customers who complain to a company on social media expect a reply within 30 minutes after posting. This trust and reliance on social clearly indicates its power of how brands can utilize it to hold meaningful conversations with consumers, and develop meaningful content that ultimately leads to conversions.
Now is the time for brands to carve out budgets for user-generated content in 2015. It's a very simple change, but a significant one that top brands are already implementing. If brands want to leverage interesting and innovative content, they need to budget for positive endorsement strategies, especially using social media. Finding customer fans and sharing their highly influential content is an opportunity not to be missed for savvy marketers.