In today’s blog, I will be investigating the use of advertising on social media platforms, and whether companies are getting a return on their investment.
In the past year it has been well documented that social media users do not make purchasing decisions based on what they have seen or read on these various platforms, with a whopping 62% of Americans claiming that it has ‘no influence at all’ (Gallup, 2014).
Is this really the case though? Are consumers sub-consciously buying based on what they have seen and read? What do the businesses say? Do they see an increase in sales as a result of a social media campaigns? Or are they just throwing money away?
Fisher (2009) had reached a different conclusion five years earlier. In a study of 17,000 internet users, 70% of them used social media to get information, and 49% have made a purchase decision based on the information they found through social media sites. When you consider Facebook has 1.3 billion active users (Statista, 2015), half of these is a big potential target audience. Leung, Bai & Statura (2013) found that in the hotel industry, social media was a very effective marketing tool. Perhaps not so much from advertising, but certainly reviews and customer feedback.
AdRoll, cited in Marketing Land (2014), found an interesting statistic shown below. Last summer, mobile accounted for 6.51% of ads on Facebook, but contributed 8.25% of click throughs. They also found that advertising on social media were 8.1x more effective when using a desktop, and 9.1x when using a mobile. Given that there is currently a rapid shift towards mobile (Twitter, 2015), web advertising on social media is a no-brainer.
$5.1 billion was spent on social media advertising last year, with Facebook claiming $2.96 billion in advertising revenue (Altimeter Group, 2014). Not figures that suggest an ineffective industry. Could it possibly be that companies cannot afford to not have a social media presence? Dao et al (2014) found that in South East Asia, social media advertising was having a positive effect on the consumers’ perceived value of the company, in informativeness, entertainment and credibility. Maybe there is a case that if your competitors are using social media, you will simply be left behind.
Salesforce, cited in Adweek (2014), surveyed 5000 companies across the US and found the following trends about their marketing strategies:
- 71% said mobile marketing is now a ore part of their business
- 68% include mobile marketing in their larger business strategy
- 66% say social media is integral to their business
- 66% have a dedicated social media team
All of these point towards a general trend in increased advertising use across social media.
From a personal point of view, I know I am more likely to respond to advertisements on social media than any other web format, whether that be through Facebook, Twitter, or others. On the other hand, I would also classify myself as someone who is not responsive to social media advertisements, one of the 62% that Gallup claims.
A lot has been made over the years of the sub conscious effect that adverts can have on purchasing decisions. Maybe this is what marketers are aiming for when they spend $5 billion on advertising, maybe they are trying to avoid being left behind by competitors, or maybe social media advertising really is an effective and measurable way of reaching your customer base.
References
Adweek, 2014. Accessed 29 March 2015. Available at: <www.adweek.com/news/technology/70-marketers-will-spend-more-social-media-ads-year-162291>
Fisher, T. (2009) ROI in social media: A look at the arguments: Journal of Database Marketing & Customer Strategy Management (2009) 16, 189–195. London: eModeration Ltd
Gallup, 2014, Accessed 29 March 2015, <http://www.gallup.com/poll/171785/americans-say-social-media-little-effect-buying-decisions.aspx>
Leung, X, Bai, B & Stahura, K. (2013) The Marketing Effectiveness of Social Media in the Hotel Industry: A Comparison of Facebook and Twitter. Accessed 29 March 2015. Journal of Hospitality & Tourism Research
Statista, 2015, Accessed 29 March 2015. <http://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/>
Twitter, 2015. Accessed 29 March 2015. <https://about.twitter.com/company>
Van-Tien Dao, W, Nhat Hanh Le, A, Ming-Sung Cheng, J, & Der Chao, C 2014, ‘Social media advertising value’, International Journal Of Advertising, 33, 2, pp. 271-294, Business Source Premier, EBSCOhost, viewed 29 March 2015.