The State of Social Advertising
Posted by Nick O'Neill on August 26th, 2008 4:47 PM
Over the past few months I have been speaking with countless professionals in the social media space about the state of advertising within the industry. Over the past year I have attended countless conferences and spoken to countless individuals all of whom appear to have a firm grasp on what’s taking place in regards to social advertising. Over the past few months I have tried to articulate it on this blog but I don’t think I’ve succeeded at aggregating all of this information into a single post.
While this post is not an attempt to aggregate all the various offerings, I hope that it sufficiently articulates the dynamic between advertisers and social networks currently.
Poor Job of Advertiser Education
“Have I got an opportunity for you! Imagine being able to reach out to your exact target audience and influence their conversation about your product or service,” the social networking sales professional says to the brand manager. “How do I correlate these advertisements directly to my sales,” the brand manager asks.
“You can’t! This is a new form of engagement advertising which is changing the way your customers interact with your brand,” the sales professional replies. “Well I’ll tell you what,” the brand manager says cautiously, “since your name is Facebook, we’ll give it a shot with $5 million in advertising and see how it goes. If good results are produced, perhaps we’ll try it out again.”
While this may not be the exact exchange that takes place between the average social network sales team and the advertisers, this is essentially what’s taking place in the industry today. While it was a great day for the sales person that closed the deal, the sustainability of this type of advertising is questionable especially when the advertisers don’t understand what they’re buying.
Ask anybody what results they are producing from social advertising campaigns and the response is usually along the same lines: “We are getting great client feedback and many have returned to run new campaigns.” What was the rationalization of their clients decision to return? You’ve got me but whatever numbers are being produced they appear to be sufficient for a select few.
What types of numbers are being produced for those clients though?
Inconsistent Offerings
Companies from Meebo to Facebook to MySpace are all coming up with new types of offerings for clients in which engagement hold a high value. Some reports will count the numbers of conversations about a topic, while others will determine how many new “fans” a company attracted. Whatever the model, they are not traditional and they are not the same from one company to the other.
While there is the urge of the social media/social network expert to produce new types of metrics for clients, “Most every ad agency in the U.S. and Europe are still 100% attached to impressions and clicks” as Ted Rheingold of Dogster pointed out in the comments earlier this week. Ted continued with a great statement, “They are becoming less scared of non-traditional clicks (such as contests, Groups, virtual gifts, etc.) but that’s only because they can still tie it to a user and a click.”
There are currently CPM, CPC and CPA advertisements that the advertisers are aware of but there is no current metric that are used for “engagement ads” (which is what leading social networks are currently offering). In order for the industry to move forward as a whole, some sort of standard metric needs to be developed for social advertising. Otherwise, each service is simply competing against the other and the reality is that we are competing against search and traditional advertising.
Social Advertising Can’t Beat Search Anytime Soon
Absolutely everybody in this industry is looking to “revolutionize” the way advertisers interact with consumers. We all sense the increased connection that can be generated between brands and consumers via social media and social networks but most can’t seem to find the perfect solution. When Facebook reverts to “engagement ads” as their “new offering”, it becomes clear that everybody (even Facebook) is struggling to find an answer that will help advertisers better relate to this new form of advertising.
While I personally cannot answer whether better advertiser education or better offerings by social networks (and social products in general) is more important, it’s clear that advertisers still don’t understand what’s being offered. If those selling social advertising can’t even track the diverse offerings that exist, how can the advertisers?
If I was an advertiser looking into social advertising offerings, I would most definitely end up reverting back to my other advertising solutions (search and more traditional channels). That’s because for now, social advertising is inconsistent and overly diverse. The real question now is do we just continue down our own paths unassisted or is there a way for competing social advertising providers to work together?
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I also think advertisers fail to consider one important aspect of online advertising--intent. They get context, and both contextual ad networks and social media can deliver that. But meeting consumers at the corner of context and intent (when they are explicitly looking to find and act) seems to only occur consistently in search marketing. I think that's why your conclusion is right on.
Chris Brogan just decided to table his consideration of adding an ad banner to his blog in view of this reality. I think that's noble. He could get a few bucks, but he knows the value to the advertiser is so low (and that there is a small inconvenience to the reader) that it's not worth it (http://www.chrisbrogan.com/the-old-advertising-...).
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