Social commerce, influencer marketing, virtual and augmented reality are the buzzwords to watch for.
This is the year TikTok exploded, and influencer marketing gained traction, especially with marketers in beauty, fashion, e-commerce and auto. What can we expect in 2020?
Socialbakers, the unified marketing platform for social media marketers, predicts that influencer marketing will continue to grow, and that social commerce will take off, thanks in part to the growth of shopping-related content, experiments in VR-powered shopping experiences, and the rise of bots for customer service.
These are the top five trends to watch in 2020:
1. TikTok will continue its meteoric rise
In October 2018, TikTok was the most-downloaded photo and video app in the Apple store worldwide and it officially hit one billion downloads in 2019. “Expect TikTok to continue its meteoric rise in 2020 thanks to its aggressive marketing campaigns and investment in geographic expansion,” said Socialbakers CEO, Yuval Ben-Itzhak.
TikTok has also leveraged celebrity partnerships and influencers to drive buzz and generate viral content. To support its growth and continued geographic expansion, TikTok is adding to its offices in London and Mountain View (CA) and recruiting talent directly from Facebook as well as from Snap, Apple and Amazon.com.
But for all of its hype, TikTok is not without some controversy. TikTok has been using popular videos submitted to its platform as part of its ongoing, external promotional campaign. The problem is, the creators of these videos have not been told their content is being used in these ads—and they are also not being compensated for the content. More recently, the app has been drawing increased scrutiny from US lawmakers who worry that it could constitute a national security threat.
“In short, TikTok is the platform to watch in 2020,” said Socialbakers’ Ben-Itzhak. Facebook’s Mark Zuckerberg has acknowledged TikTok’s success and attempted to compete by launching Lasso in November of 2018. Unfortunately for Facebook, Lasso has struggled to attract users. As of February 2019, it had only attracted 70,000 users in the US.
2. Influencer marketing will grow, not wither
“Consumers are increasingly seeking out reviews and trusted voices when making purchasing decisions,” said Ben-Itzhak. “This has created a huge opportunity for influencers and brands to team up to create authentic connections with audiences.”
Large consumer brands in beauty, fashion, e-commerce, and auto leaned into influencer marketing in 2019 and found that their efforts drove business and moved the needle. Expect them to increase their investment in 2020 and help make influencer marketing a $10 Billion industry by 2020.
According to Socialbakers data, in the last year:
- Influencer sponsored ads grew by more than 150%
- The number of influencers using the #ad (to denote sponsorship) more than doubled
- Micro-influencers became more important and now comprise the majority of influencers (over 75% of all influencers in North America are micro-influencers).
Well-known marketers are embracing digital, social media, and influencer marketing like never before:
- Estee Lauder stated that 75% of their marketing budget is going to digital marketing, particularly social media influencers and that the investment is paying off.
- BOSS is promoting its suit business with the hashtag #hashtagsuitschallenge and activating influencers and athletes globally to take on the toughest challenge while dressed head-to-toe by BOSS. The buzz-worthy suit challenge was even mentioned in a recent earnings call.
- Burberry’s social media successes on Instagram and WeChat were even mentioned by their CEO in a recent quarterly earnings call.
3. The time for VR/AR is coming
Virtual Reality (VR) has long been associated with the gaming world or with high budget Hollywood movies. “While some tech-savvy marketers have experimented with VR, most make the mistake of underestimating its potential by seeing it only as an attention-getting gimmick,” said Ben-Itzhak.
“We know VR presents a huge opportunity for marketers as it can engage and excite audiences, build brand awareness, and drive product discovery and purchase,” he added. “Imagine giving customers the opportunity to browse products through virtual clothing racks and virtual showrooms and then giving them a lifelike experience with the product before leading them to a purchase. While it may be 5-10 years before we see it used at scale, VR technologies promise to be a powerful weapon in the retail marketers’ arsenal,” said Ben-Itzhak.
For example, The Gap experimented with VR in the form of a virtual DressingRoom app. Gap shoppers used it to try on clothes virtually before buying. The Gap app helped shoppers pick the right clothing for their shape and size and reduced customer dissatisfaction and product returns in the process, saving the company money and hassle.
Instagram also launched stories for a few accounts to experiment with VR and AR shopping, interact with the clothes and try them on. Expect to see more experiments in 2020.
4. Social Commerce prepares for lift off
According to Socialbakers data, shopping-related content—including shopping experiences leveraging VR —is rapidly proliferating on social media. Platforms are responding by adding more e-commerce features.
Instagram already launched Instagram Shopping for selected brands, giving businesses an immersive storefront for people to discover and explore products as well as a link for purchases. Facebook’s family of applications—WhatsApp, Facebook Messenger, and Facebook Groups—already offers tools for customer care and community management so that all marketing funnel activity— from product discovery to post-purchase customer care and evangelism— can happen on social media.
Facebook is even launching its own cryptocurrency, Libra. “The year 2020 could be the year that social commerce takes off as more and more customers make purchases directly from social media platforms instead of heading to a shopping site’s app or to an online store after discovering a product on social media,” said Ben-Itzhak.
5. Battle for ad spend: Facebook vs Instagram
Who will win the battle for ad spend in 2020, the behemoth Facebook or current darling Instagram? (Answer: Facebook, as the company owns both platforms!)
But what is the winning mix for marketers?
“As rudimentary as it may seem, we believe that all brands will still need to consider three important basics when deciding where to allocate budget – reach, engagement and demographics,” said Ben-Itzhak. “From there a brand can get more granular on which platform makes the most sense for a particular campaign or for ongoing presence.
Our data showed that while marketers have been increasing their spend on Instagram, more than 60% of all total ad spend is still allocated to the Facebook News Feed. The Instagram feed comes in a distant second at 20%, followed by Stories at 10% and the rest of the top 5— Facebook suggested video, and Facebook instream video—combine for about 10%.”
All in all, brands are spending only about one third of their total budgets on Instagram, which is the most engaging platform. This raises the question—are brands really getting the most engagement out of their investment, asks Ben-Itzhak.
He believes there is a lot of potential value in Facebook suggested video, which has the second-highest click through rate (CTR) at nearly 0.8%, but only a few percentage points of relative ad spend. “The imperative for marketers is to focus on optimizing advertising content and personalizing their ad experiences. Settling for blanket strategies across channels is not going to bring in the desired results,” said Ben-Itzhak.