With the spread of smartphones, the number of SNS users continues to increase. Some people in charge of SNS advertising at companies may be considering increasing their SNS advertising budget.

In this article, we will introduce XICA's analytical findings to determine whether SNS advertising is truly effective.

Changes in SNS users

<Changes in SNS usage rates*1>

As shown in the figure above, the usage rate of SNS is generally on the rise. In particular, LINE, Instagram, and TikTok are SNS that have seen an especially large increase in users in recent years.

*1) Statistical survey data from the Ministry of Internal Affairs and Communications, compiled from the Telecommunications Usage Trends Survey, excluding those who answered "I do not use any of them"

The effectiveness of social media advertising

The use of social media is on the rise, but how much effect can you expect when placing ads on social media?

How did we verify it?

XICA is working on calculating "industry norm values" using the MMM (※2) tool "MAGELLAN."

Simply put, the "industry norm value" is the average for each industry. It is derived from the English word "norm," which means "average or standard." The industry norm value is calculated by repeatedly collecting and analyzing data under the same conditions to determine the standard value for the entire market.

Knowing the industry norm value allows you to understand industry trends, such as which measures are likely to be effective in each industry and the general effectiveness of each measure.

This time, we used this industry norm value to examine the extent to which social media advertising contributes to business results.

*2) MMM is an effectiveness measurement method that can quantify the impact that various marketing measures have on results, whether they are online (web ads, SNS ads, etc.) or offline (TV commercials, newspapers, magazines, etc.). It is characterized by its ability to not only accurately grasp the effectiveness of each measure, but also to quantify the relationships and synergistic effects between measures.

For more information on MMM, please see this article.

• Why you should use "on-off integrated analysis" to measure the effectiveness of your advertising | XICA Co., Ltd. https://www.wantedly.com/companies/xica/post_articles/379221
• Three reasons why Japan should adopt MMM in marketing in the cookieless era | XICA Co., Ltd. https://xica.net/magazine/marketing-mix-modeling/

The effectiveness of social media advertising

First, let's look at how effective social media advertising is.

The diagram below shows SNS advertising and other advertising on three axes: cost, acquisition volume, and acquisition efficiency.

<Trends in effectiveness and efficiency of advertising measures (all industries*3)>

* Vertical axis: amount acquired, horizontal axis: acquisition efficiency, size of bubble: cost
* Plots of relationships when classifying awareness measures into nine groups (TV commercials, flyers, newspapers, magazines, radio, OOH, video ads, display ads, and SNS ads).

Looking at this chart, we can see that SNS advertising*4 is the third most efficient method compared to other methods. However, when we look at the amount of advertising (size of the bubble), the amount is still small.

*3) Calculated from analysis results held by XICA

*4) All advertisements posted on social media are counted as social media advertisements.

Industries where SNS advertising is most effective

Next, let's look at which industries are best suited for SNS advertising. The chart below compares 2 industries on two axes: "acquisition volume" and "acquisition efficiency."

<Comparison of SNS advertising in 10 industry segments*5>

* Vertical axis: amount acquired, horizontal axis: acquisition efficiency
* Plots show relationships based on the overall average

The chart shows that there are significant differences in the effects across industries.

• Large amount of acquisition and high efficiency: "Real estate and housing facilities"
• Large amount earned, but not so efficient: "Medicines, daily necessities, cosmetics, toiletries" and "Dining out and various services"
• Not much acquisition, but efficient: "Durable consumer goods" and "Information and communications"

*5) Products are divided into 10 industries

Which media should I use to advertise on social media?

There are many cases where SNS advertising has produced great results by considering product characteristics and affinity with the target audience. However, when considering placing SNS ads, a concern we often hear is, "I don't know which medium I should use to place my SNS ads."

From here, we will introduce trends taking into account the characteristics of each medium, based on insights gained from XICA's past analysis.

① On Twitter, retweets and content are key

Twitter ads are known to have a strong ability to spread through user retweets, etc. MAGELLAN's MMM analysis also shows cases where widespread dissemination through retweets is believed to have contributed efficiently to business results.

Another common feature among highly successful Twitter ads is that they have content that is well suited to virality.

For example, there are many cases where collaborations with anime or campaigns offering better deals than usual have been successfully spread to approach potential customers who would not normally be interested, which has resulted in a significant increase in results. If you are considering Twitter advertising, you can expect to achieve results more efficiently by devising content.

② Products aimed at women are a great fit for Instagram.

The effects for each target can also be checked using industry norm values.

<Effects of SNS advertising by medium (all industries, F1, F2) *3>

* Vertical axis: amount acquired, horizontal axis: acquisition efficiency, size of bubble: cost

When examining the effectiveness of social media advertising by focusing on products targeted at the F1 demographic (women aged 20-34) and F2 demographic (women aged 35-49), it is clear that Instagram is the most efficient among all social media ads. If you are dealing with products targeted at women, it is recommended that you strengthen your advertising on Instagram.

*3) Calculated from analysis results held by XICA

Continuously understand the effects through on-off integrated analysis and carry out the most effective marketing operations

This time, we verified the effectiveness of social media advertising using industry norms.

Compared to other advertising strategies, SNS advertising tends to be more efficient at acquiring leads.

The figures show that collaborating with content aimed at spreading awareness on Twitter, and targeting the F1 and F2 demographics on Instagram, are particularly effective in contributing to results.

By selecting media that match your purpose and target in this way, you can achieve better results and improve efficiency.

The relationships between the advertising strategies introduced here are merely trends calculated from statistically processed data and do not necessarily correspond to the trends of individual companies.

In recent years, with the strengthening of regulations on personal information protection, it is becoming difficult to verify the effectiveness of advertisements using the same tracking methods as before. *6 MMM uses a statistical approach, allowing us to verify the effectiveness of advertisements using methods that do not require the identification of individuals.

If you are having trouble verifying the effectiveness of your advertising, including SNS advertising, please consider the MMM option.

*6) XICA News Release, issued on April 2022, 4

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Author information

XICA Co., Ltd. Marketing Team