Tuesday, June 25, 2024

    Europe’s small businesses have rapidly embraced social media advertising – TikTok up 5000%

    Small and medium sized businesses (SMBs) have almost tripled their social media ad spending since the start of the pandemic, although only 30% spend on social media at all.

    A new study by Spendesk — the 7-in-1 spend management solution for small and medium-sized businesses (SMBs) — looking at 4000 corporate customer spending on social media across the UK, France, and Germany since the start of the COVID-19 pandemic finds that LinkedIn’s advertising platform is used by the highest number of businesses, but Meta (across both Facebook and Instagram) sees the most spending by a wide margin.

    Unlike France and Germany, average social media spending in the UK plummeted from 2021 to 2022, and average spending now stands at under a third of Germany’s, perhaps due to variance in each country’s post-pandemic recovery.

    The study captured the moment businesses began advertising on TikTok in January 2020, but it wasn’t until 2021 that the platform saw notable use, and spending has continued to rise ever since. Although only 3% of companies are exploring the opportunities of this nascent platform, those that do spend high, at around £9,500/€11,000 per month; a spectacular increase of just under 5,000% since 2020.

    TikTok’s average monthly spend per customer is second only to Meta in the social platforms surveyed and roughly equal to average ad spending on Google. This is impressive given the age of the platform and indicates that companies that are investing in TikTok — no doubt in pursuit of the lucrative Gen Z audience — are seeing strong performance. As of May 2022, almost twice as many customers paid for ads on TikTok than Twitter, Pinterest, and Snapchat.

    Social media spending surged after the first wave

    Average SMB advertising spend on social media almost tripled (+271%) from 2020 to 2022. There was a sharp dip in average spend when the first COVID wave hit Europe in early 2020, but by the end of the year it had bounced back and has been increasing exponentially ever since – with the biggest leap occurring in November 2021 as SMBs ramped up their seasonal advertising.

    The UK is the exception to this trend. Although SMBs in the country were tracking alongside those in France and Germany from 2020 into 2021 — when the UK increased spend by 165% – since then the spending has dropped, with May 2022’s figures standing at 28% less than May 2021. Despite the recent fall, overall social media spend grew significantly in the period surveyed, increasing by 158% from 2019 to 2022.

    Meta takes the largest slice of the social spend pie

    While the number who used Meta’s social advertising platforms on Facebook and Instagram was below LinkedIn’s average monthly customers, Meta dwarfed LinkedIn in average monthly spend, at £13,500/€15,700 per month compared to LinkedIn’s £1,700/€2,000.

    Monthly average spending on Meta platforms tripled during the period covered, with the biggest year on year growth occurring between 2020 and 2021, when spending jumped by 219%. Seasonal peaks and troughs were observed in winter and summer, respectively. SMBs in Germany spent the most on Meta in 2021 at an average of £27,000/€31,800 per year, triple the average in France (£8,500/€10,200) and quadruple the UK’s (£6,500/€7,800).

    “There has clearly been an exponential increase in corporate spending on social media since 2020,” comments Stephanie Bowker, VP of Marketing at Spendesk. “At the beginning of the pandemic, companies were cutting back on all marketing budgets but now the magnitude of crisis has necessitated a revival and even increased engagement with customers.Social media being easier to track, fast to execute and a lower cost than traditional media buying is naturally the first marketing budget to bounce back to a normal advertising spend. I do however look forward to new innovations in social media advertising as the existing channels are becoming crowded and less effective.”

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