In its 2013 State of Sponsored Social report, IZEA reveals that social sponsorship is on the rise and cutting into display advertising budgets for many brand marketers. This finding comes from a research analysis of over 10,000 brand marketers, social media consultants, and key social influencers’ opinions and experiences with social sponsorships and display advertising.
Overall, 61% of brand marketers invested in social sponsorships in 2013 by compensating social media influencers or publishers in exchange for a mention, promotion, or review through the influencer’s social media content, conversations, and channels. That is a 5% increase over 2012 social sponsorship investments. Today, 60% of companies have a stand-alone social media budget.
The growth in social sponsorships isn’t surprising given that 30% of marketers who responded to the IZEA survey indicated that they believe display advertising is dead or dying. This belief is corroborated by influencers. In total, 55.7% of influencers indicated that they make more money from social sponsorships today than from display advertising.
The most commonly used forms of social sponsorship used by brand marketers in 2013 were Sponsored Tweets (52%) and sponsored blog posts (51.6%) followed by sponsored videos (33%) and sponsored photos (33.0%). For the first time, sponsored share/pins on Pinterest were included in the annual study with 29% of brand marketers reporting that they invested in Pinterest social sponsorships in 2013.
Overall, brand marketers believe that the most important measures of social sponsorship success are the quality of the content (41.9%), number of shares (36.3%), and click through rate (35.2%). Interestingly, quality is also the most important factor for influencers when they consider an offer for a social media sponsorship. Quality of the advertiser ranked as the most important factor followed by value of the compensation and form of compensation. In 2013, the majority of influencers (74%) prefer to receive cash payment from brand marketers for social sponsorships.
Despite all of this positive growth for social sponsorships, more than one in four brand marketers (26.7%) have no understanding of the Federal Trade Commission (FTC) guidelines related to disclosing material connections. More than one in three brand marketers (37%) admit that they’ve heard of the FTC guidelines but that’s all, and only 10.6% have read the guidelines. Surprisingly, only 25.5% of brand marketers have read and understand the FTC guidelines. Influencers also have little knowledge of the U.S. guidelines, which can easily be found in the Code of Federal Regulations, Title 16, Part 255, Section 255.5. Only 29.5% of influencers have read and understand the FTC guidelines while 37.9% have no understanding of them at all.
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