Social media marketing – the next generation of advertising
By Graduate Consultant Emily Dunn
Why is the iPhone the best thing since sliced bread? With a double dose of cynicism it could be argued that our increasingly idle, small-attention-span lifestyles have created a demand for products that give us instant gratification and everything we need in one package. Yet looking at it from a glass half full approach, the consolidation of our communication, planning and entertainment needs can be seen as an example of progression – why carry around a separate mobile phone, calendar, radio, music player, computer, camera, voice recorder and best friend when you can have it all in one pocket-sized device!? When you start to think about it, progression can be seen everywhere, from transition lenses to ‘jeggings’ (that’s jean leggings, though their position as progressive is debatable…).
When considering the relationship of progression and advertising, one needs to look no further than an analogy of the primary school playground. In the playground, everyone wants to hang out with the cool kid with the trendy shoes, but as soon as a new, ‘cooler’ kid enters the playground, ‘Mr Trendy Shoes’ becomes replaced and thus loses his popularity status.
In this instance, paid advertising takes the role of Mr Trendy Shoes, who, through the nature of popular culture, is faced with the challenge of maintaining his popularity, while the group of school children are the advertisers looking for the best place to invest their assets. Through the plight of maintaining popularity, creators of pop culture consumables (such as smart phones and digital entertainment) are forced to continually innovate and refine their products, in order to stay on top.
With the rise of the digital age, traditional forms of advertising, such as print and television, are faced with a tough decision – adapt to the new environment or be sent packing. For the most part, the transition into the digital age has been well recieved, with news sources such as daily newspapers now selling ad spaces on their online platforms to combat the declining interest in print and broadcast advertisements.
According to leading professional service firm PwC, the majority of Australian marketing departments are moving their spending away from traditional advertising towards digital spaces. They argue that digital spaces have driven this trend by diluting the reach of traditional platforms, such as television and radio, and therefore, combined with its affordability, digital spaces become an appealing choice for advertisers. Whether it’s because it’s shiny and new or truly effective, digital advertising is thriving, with sellers of digital advertising continually finding new ways to commodify and value-add digital spaces.
However, the winner of the online advertising arms race goes to social media. Social media has entered the digital advertising landscape bright-eyed and bushy tailed, and it wasn’t long before social media providers like Facebook, YouTube and Twitter realised they could use their popularity to their advantage by offering marketing and advertising opportunities. In fact, in 2013, according to leading global media company, Mashable, social media advertising officially overtook news source advertising, with advertisers spending $6.1 billion on social media. In 2014, Facebook made $11.5 billion from ads alone, and an overall profit of $12.5 billion, jumping 58 per cent from the previous year – not a bad result for a medium with minimal offsets!
With the innovation of ‘side-bar’ and ‘newsfeed’ advertising on Facebook, we’ve also seen the development of ‘sponsored’ Facebook posts, which are essentially ‘boosted’ posts you can pay for to target a larger number of people. This ‘user-led’ advertising option is perfect for small to medium sized businesses who just simply want to reach people in their extended network. For $7 a post, you can reach roughly between 700-2000 people (depending on your current exposure), and with no lock-in contracts, this is one of the cheaper forms of advertising.
However, while Facebook ‘insights’ (webpage analytics) can determine how popular your advertising and sponsored posts are on an exposure and ‘click’ basis, it is yet to be determined how effective this form of advertising is at engaging people compared to more traditional forms of advertising such as radio, television and newspaper ads.
So how is Facebook making so much money off advertising? It’s simple, businesses pay for advertising to spread a message to a lot of people. Advertising costs are predominantly determined by the amount of people the ad will be exposed to, and to date, Facebook states it has 1.4 billion active users. That’s a quarter of the entire planet on one networking platform.
In efforts to keep Facebook users happy in the wake of their newsfeeds being spammed with ads, Facebook recently cut down the amount of desktop ads on offer, making ads more exclusive…and in turn, more expensive.
If history has taught us anything, it’s that technology and pop culture is always changing, so it will be interesting to see how social media advertising plays out over the next few years – watch this space!