A new study, the State of the American Consumer report, shows that the public doesn’t think social media advertising on platforms such as Facebook and Twitter are making an impact. The survey by Gallup, released earlier this week, indicated a mere 5 percent of U.S. consumers believe that ads have a big impact on their purchases. It also showed that 62 percent of Americans, and 48 percent of millennials, claim they’re not swayed at all by social media ads.
Are Brands Wasting Money?
By 2017, brands are expected to spend $11 billion on social media ads across multiple platforms. More than 92 percent of businesses use Facebook advertising and more than 23 percent advertise on Twitter, LinkedIn and YouTube. With brands investing so heavily in social advertising, it’s important to consider the true effectiveness of such strategies. Marketers should be reassured that the Gallup examined only how consumers self identified, not how those individuals acted.
“How individuals report on their actions and how they may be influenced or behave online can be very different,” explains ZOG Digital’s Kim Giroux. “Ad lift testing, for example, is an important method for marketers looking to measure the effectiveness of their strategies, as it indicates actions for users that have had no interaction or have not seen an ad versus users that have been shown advertisements.”
Proof is in the Results
If Gallup were to look at customer behavior or compare the actions of users shown an ad versus those that were not, the survey results would look much different. Attribution modeling and metrics that indicate advertising effectiveness are much more complex and accurate than self-identification. In fact, advertising on social media has been proven to be effective. Ninety-seven percent of marketers believe that social media marketing helps their businesses, with 58 percent saying it positively affects sales and 88 percent saying it improves brand awareness.
One great example on Twitter comes from the dating service HowAboutWe. The company used paid advertising on Twitter to promote coupons in five markets around the United States. The company found that leads coming from the Twitter promotion were 20 percent more likely to convert into paying subscribers than leads from any other avenue, including the company’s website and emails.
Evidence that paid advertising on Facebook works can be found in several studies as well. For example, comScore looked at how much money fans of several brands spent compared to non-fans. The study found that fans and friends of fans for Amazon, Best Buy, Target and Walmart spent significantly more, sometimes as much as double, during the 2011 holiday shopping season than people not connected to the brands at all. Facebook and comScore say that this is proof that paying for ads that encourage people to become fans of a brand are effective at increasing sales.
Social media also has one more giant advantage over traditional marketing and advertising outlets: advanced audience targeting and real-time optimization capabilities. Twitter and Facebook advertising allow businesses to drill down into specific audiences, and reach people that are most likely to respond. This is something that cannot be offered by traditional advertising outlets like television and newspapers.
People may claim that advertisements on social networking sites don’t impact their buying behaviors, but case studies and research have repeatedly shown that not to be reality. Brands should evaluate the effectiveness of paid social advertising by doing tests of different options, seeing what works, and building off their successes. Most, if not all, marketers can accomplish a variety of goals through paid ads on social networking sites, it just takes experience in effective audience targeting as part of a comprehensive and integrated marketing strategy.
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