Social Media North America Market Intelligence

*This report was last updated in Q4 2018. Please click on request customization if you are looking for an updated version of this report

Report Coverage

  • Social Media Marketing Value Chain
  • Digital Marketing Spend Guideline for CPG and F&B Industries: US
  • Social Media Marketing Trends
  • Porter's Five Forces Analysis
  • Social Media KPIs by Focus Area and Performance Measurement
  • Key Social Media Marketing Platforms: Strength and Weakness
  • Opportunity Analysis: Consumer Targeting and Agency Spend Consolidation
  • Social Media In-house vs. Outsource Analysis: Costs and Results
  • Should Cost Model for Social Media Marketing: Methodology
  • Distribution of Agency Cost between Development and Non- development Job Roles
  • Channel-wise Analysis of Parameters Impacting Cost
  • Cost Benchmark: Content Video or Online Video

Market Size


13 Percent

Market Size North America

$190 Bn

Table of contents

  1. Category Overview
  1. Procurement Best Practices Social Media Marketing
  1. Social Media Marketing: In-house vs. Outsource Analysis
  1. Cost Structure Analysis
  1. Supplier Analysis
  1. Market Analysis

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Regional Market Outlook on Social Media

The global digital marketing spend was valued at $170–190 billion in 2016, and future estimates look much stronger, due to continual attraction on digital channels. It is forecasted to grow at a CAGR of 13 percent to reach around $280–310 billion in 2020.

  • Globally, North America will continue to dominate the digital marketing industry, constituting around 39–40 percent toward the global digital marketing category spend. Retail industry marketer continues to be the leading ad spender in the US. Search has been the top preference of retail marketers, but currently, they are moving to video, social media, and other display formats to augment brand visibility
  • Digital ad spend in the APAC has surpassed Europe, and this growth is primarily driven by China and emerging Asian markets, due to increasing investments on technology and digital platforms in these regions
  • China is by far the largest market in the APAC and estimated to contribute to around 66 percent of total digital ad spend in the region's total digital spend $60 billion. Automobile, consumer goods and telecom industry marketers are the top spenders in the country
  • Search and display advertising continue to be priority categories. However, the spend growth of these categories is recently offset by increased spend on mobile and e-commerce sites. Japan is a major destination for mobile marketing campaigns, due to widespread smartphone penetration. In China, e-commerce paid search outspend all other categories. In South Asian markets, consumers place higher trust on e-mail messages than search feeds

Social Media Marketing Spend Growth

Global Digital Spend vs. Traditional Spend:

  • Marketers will continue to spend more on digital medium for the next four years, as digital medium has become a major source of information, comparison, and purchase
  • Several marketers still perceive that they lack a standard spend guideline for digital categories

Digital Advertising Spend Share by Regions (2014 and 2018):

  • North America will continue to dominate the online advertising market with a maximum spend share
  • Strong product demand, high smartphone penetration, improved broadband infrastructure, and optimistic e-commerce outlook enable marketers to shift online spend from Europe to APAC markets. Key APAC markets may share 28 percent of the global digital spend by 2018

Digital Marketing Spend Segmentation: US

Key Observations:

Retail industry spends maximum on digital marketing services:

  • Consumers are aggressively using digital mediums to compare & purchase products both in offline and online retail stores. Thus retail industry has foreseen an opportunity to target consumers at their purchase points with innovative digital strategies such as dynamic discounts, store locator application, QR code scanners, and in-store e-coupons. They also invest heavily on SEO & SEM to continuously monitor, update and purchase relevant keywords to ensure broader reach and high website traffic

CPG and F&B industries' digital spend is growing but their TV spend remains maximum:

  • In 2014, CPG and F&B industries contributed to 8 percent to the overall US digital spend. By 2017, the contribution will remain flat at 8 percent, as TV ads continue to remain most effective. Although the overall digital spend in the US will grow at a CAGR of 6–7 percent until 2017, this indicates that CPG and F&B industries will remain selective of their digital marketing investment. In mature markets, the spend growth will be stable and experimental. In emerging nations, the digital spend will be consolidated to popular categories, such as search, e-mail, and online banner ads

Digital marketing spend is focused to trigger consumer engagement:

  • Almost 60 percent digital spend in the US is made to ensure favorable consumer engagements. Various industries still dedicate a significant digital marketing budget to perform branding activities. Leading companies could prioritize digital marketing spend objective, based on the characteristics of operating brands. Newly launched and growing brands receive digital marketing stimuli to trigger engagement, whereas established billion dollar brands often rely on digital branding activities to sustain consumer loyalty or to reinforce brand experience

Make vs. Buy Analysis: Digital Marketing Sub Categories

Categories to Buy:

  • Search, display, mobile, and e-mail spend under management are frequently outsourced, as these categories require specialist attention and major marketers lack relevant in-house resources
  • CPG and F&B industries deal with a large volume of transactional data, which can potentially highlight consumers' purchase patterns. Thus, major marketers spend heavily on outsourced technologies, which automate content creation & dispersion, analytics, and corporate website management

Categories to Make:

  • Global marketers, who still spend only a fraction of their overall marketing spend on customer experience and blogs, are relatively less interested to outsource them, as agency spend would not be rationalized otherwise, due to their limited ability to fetch conversions.
  • Degree of outsourcing for social media is negligible among B2B compnies, where a single in-house team often manages its social media content. B2C companies have started to outsource the category, as social media content should be relevant to local brand experience

Sourcing Model: Social Media Marketing

Key Insights:

  • Full-service outsourcing forms a major part of the digital services globally, where companies outsource various services, such as SEO/SEM, mobile, e-mail, and social media marketing
  • Sub-contracting is widely followed among agencies, based on geographies and capabilities
  • Regional bundling approach is gaining acceptance among buyers in markets, wherein the buyer could bundle the demand from these two similar markets and leverage volume discounts. However, government regulations around data privacy and anti-spam legislation that differ from one country to the other are to be considered by global agencies and marketers

Social Media Marketing Approaches: Pros & Cons


  • Leveraging on in-house Knowledge: In-house professionals have a higher edge than outside agencies in understanding company's customers, products, etc.
  • Retaining ownership: In-house social media manager will know what is going on with your business at all times. Clients can easily monitor and ensure what in-house social media manager is doing
  • Speed to market: It is highly essential for the marketers to react quickly, while responding to path-breaking news, hitting a seasonal window, increase the volume during a successful campaign, launching social media campaigns, etc. In-house professionals have a higher competitive edge than outside agencies during all the above situations


  • External parties are better equipped: Agencies are often better equipped to look after the social media campaigns and potentially provide the reports from social media monitoring as well. They have likely been doing it for longer than an in-house team and have templates set up for reporting
  • Work volume versus cost: If the client has a small business and small social presence and/or are in a very niche category, the client might not have enough work to justify hiring an in-house person (even part-time). It may be cost-effective in this instance to get someone else to handle it until such times, as you grow your channels enough to warrant hiring someone in-house

Case Study: General Mills and Link Humans Specialized Social Media Agency

General Mills uses various social media channels, such as Facebook, Twitter, YouTube, LinkedIn, etc., to recruit people. They have recognized key recruitment challenges and has addressed them through a smart social recruitment and employer branding strategy. As a part of their social media strategy, General Mills portrays themselves as a favorable employer being responsive to their external audience, presenting themselves online with a genuine human voice, and sharing great content.

Facebook Strategy:

  • With over 15,000 followers, the Facebook Careers Page provides interested job seekers with information about current job openings, relevant videos
  • This page also gives an introduction to the company's recruiting team

YouTube Strategy:

  • You tube showcases videos that highlight their work culture and brand
  • Videos in You Tube have received 127,000 views that provide insights into the interview process

LinkedIn Strategy:

  • The main objective of General Mills' LinkedIn strategy is to build relationships and to source candidates
  • The page has over 140,000 followers on LinkedIn and includes videos, employee testimonials, information about benefits, a list of awards and recognition and current job openings

Twitter Strategy:

  • General Mills recruitment and employer branding content is being shared with 5,000 followers
  • Twitter as a channel is used to live tweet relevant events, share the latest job openings, etc.

Cost Saving Strategy: Snapshot

Payment Term Optimization:

  • Payment term optimization is one of the key cost saving levers, as marketers can realize billing rate discounts worth 1–3 percent for payment term adherence of 7 to 30 days. Digital marketing agencies revealed that advanced set up fee payment also helps them significantly to assimilate internal workforce and minimize the risk of supply default. Hence, they often agree to provide 3–5 percent billing rate discount for 12 months advanced payment

Process Standardization and Automation:

  • Global marketers are harnessing opportunities to reduce the effort of agencies' leadership and account management teams with marketing technologies, which promise to automate customer identification, customer profiling, customer query management, customer targeting, campaign concept development & review, campaign deployment and campaign performance reporting. This may save substantial agency cost, as marketers no longer need to include agencies' leadership and account management team for multiple concept brainstorming, concept review, and brief communication

Supplier Development:

  • Marketers, who share monetary and non-monetary resources with incumbent agencies, tend to strengthen on-going relationship and expect value-added services. Agencies are willing to offer 2–10 percent billing rate discount for additional contracts
  • Globally, digital marketing agencies are maturing rapidly with increasing global footprint, disruptive technologies, and innovative service offerings. They still may not be perceived as mature as traditional marketing agencies, due to lack of experience and the changing nature of digital marketing landscape

Performance Based Pricing:

  • Marketers can arrive at a cumulative Digital Performance Index score for each of its incumbent agency by considering how they performed against industry ROI benchmark. Ideally, 80 percent agency fee should be kept as retainer/fixed and 20 percent should be proportional to campaign performance. There have been cases, where marketers paid bonuses to their incumbent agencies (more than the promised 20 percent) for achieving exceptional results. Such strategies ensure healthy client–agency relationship and establish an opportunity to expect value added services in the long term

Social Media Cost Drivers: Website

PDF files, products, blog articles, customer list, if these need to be manually entered with accuracy check, it will spike up the cost, due to additional resource requirement.

  • Alternatively, suppliers train the client to enter the data
  • If data is already present in the system and just needs migration, it can be done within an hour, in a cost-effective way

Addition of features, such as video players, online directories, social media, marketing, e-commerce, forums, photo galleries.

  • These features are enclosed in plugins, modules, and extensions that can be purchased or licensed for under $100, and these can be added to the website
  • The issue here is modification and customization of these plug-in or time when it does not function well and requires testing and troubleshooting. Annual maintenance and version upgrade also adds to the cost

Buyers usually choose a website design offered by suppliers, if the buyer is interested in a different format or designe or emulate from other website example, then the budget will increase.

  • For example, a website built for $12,000 budget range cannot replicate a website, which costed $50,000
  • The supplier here is required to connect the website in question with some other third- party solution, which may include database of customers, accounting software, marketing systems, products, custom shipping rules, and inventory systems
  • This scenario is applicable when the supplier is asked to replace the existing web or e-commerce site with the new website
  • Where the buyer has defined the website and is ready with “website definition” and document, such as business goal, creative brief, technical brief, site map, wireframes, features and functionality, marketing strategy, schedules and budgets, it will ease the website development process
  • In case the supplier has to do these documents from the beginning, the same will be scoped and charged





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