Source: flickr user aresauburn
Forecaster eMarketer has raised its outlook for U.S. social networks advertising spending this year by nearly 30 percent, to $1.68 billion in 2010 and to over $2 billion in 2011. Overall online ad spending recovery and Facebook’s continued growth were behind eMarketer’s decision to revamp its December forecast. Of course, increased market growth means that more advertisers are shifting more attention towards social networks as an advertising platform, but how can social media companies best gain ad dollars and increase market growth? And how can marketers best use social advertising?
Chances are, the next big advancement in social media marketing will be less about the actual technology and more about coordinating and integrating across media format: traditional media for reach, interactive media for targeting, and social media for engagement, much like Unilever’s latest Axe promotion.
For this to happen, three social media advertising areas need help: scale, distribution and targeting, and format.
Scale: Audiences Lack Concentration
According to eMarketer, Facebook, which credibly claims 500 million users, accounts for half of all social network ad spending. A Nielsen survey, meanwhile, shows that social networks in toto now consume almost a quarter of all time spent online — more than any other category.
But unlike broadcast television, social media’s audience is scattered across millions of individual pages, limiting the effectiveness of mass-reach, simultaneous impact. And unlike traditional portals like Yahoo, Facebook doesn’t really have a home page or major channel hubs to concentrate users. Likewise, even if Twitter has 190 million users, they’re scattered across mostly tiny networks of friends and followers. To mimic the impact of a traditional TV ad, marketers with time-sensitive campaigns must understand what portions of those large-scale audiences are high frequency users, so that a network blast really will hit its required audience counts. Providers need to offer that capability.
Distribution and Targeting: Walled Garden or Bust?
Distribution via ad networks (from Google, AOL, Glam Media, etc.) can alleviate scale issues for social services smaller than Facebook, MySpace, LinkedIn, and Twitter. And re-distribution — that is, viral pass-along — can not only boost marketing reach but also add that “recommended by a friend” characteristic unique to social media.
Social media promises marketers the chance to target audiences by interest and behavior. But is most social network advertising actually doing that? A couple years ago, MySpace had better ad targeting technology than did Facebook, yet the bulk of its impressions were sold as remnant inventory at market-bottom prices. And while both those sites, through third-party tools, have improved their targeting, how many times do you see, say, the exact same dating service ads when you visit Facebook? And much of the promise of social technology is delivered through APIs and loosely linked ecosystems. Like the still-nascent RSS ad feed market, marketers are waiting for vendors and agencies to solve cross-network targeting and measurement issues.
Format: Is It Really “Social?”
Besides targeting, social media’s big marketing promise was tapping into friends’ recommendations. But burned by the creepiness of Beacon, most marketers continue to shy away from anything but opt-in “friend-following.” Social media needs to get beyond product pages, lightly-targeted display ads and remnant inventory optimized by click-through tracking. Especially if it wants to exploit traditional brand advertisers.
We’ve had online branded casual games since the invention of Flash. Twitter @earlybird offers are promising, if small-scale. Facebook may also be ramping up customized advertorial content. All of these represent social marketing as differentiated from what advertisers can do in print or television, or on most other online properties.
The winners in this race to win the ad dollars will be the companies that deliver technologies, services and staffing that can best assist big brand marketers to reach scale, target audiences and measure performance, as well as integrate traditional and online media campaigns with the promise of social engagement. And perhaps ironically, it’s those big portals and traditional media companies that often have more of that talent and expertise in place.
Related Research: Social Advertising Models Go Back to the Future