As social networks grow and mature it has become inevitable that revenue streams such as advertising have become a key aspect of their long-term viability.
It is now predicted that social media ad revenues will to grow to $11 billion dollars by the year 2017 and so social advertising has become a huge topic of interest amongst marketers. In fact, Facebook alone is expected to make close to $1 billion from its mobile ad revenue in 2013, according to the latest estimates.
As Salesforce Marketing Cloud VP Peter Goodman notes, “Social ads reach the audience in which you’ve invested a lot of money and time into nurturing. You can see which audiences are engaging the most, so you can ensure that your ads are being bought correctly and you’re actually growing your fan base based on true data.”
This new infographic from Salesforce looks at the current state of the social ads ecosystem, including why you should consider using social ads.
Expect a growing wave of complaints and resentment on social networks over the next few years as the likes of Twitter, Facebook and LinkedIn increase their efforts to generate revenue through advertising.
You see, since the launch of these hugely popular social networks many of were under the misguided impression that we were the customer. We enjoyed using these amazing free services, connecting with family, friends, colleagues and new people around the world. Its been wonderful and it has revolutionised the way we communicate.
And its free!!! How good is that?
Hold on, didn’t your parents always tell you “nothing in life is free”?
Well, they were right. You pay one way or another for most “free” services. Payment doesn’t always have to be financial. Sometimes we pay in time or attention. That’s how traditional “free” media like TV and radio works. It interrupts our attention and asks for 30 seconds of our time in return for free entertainment.
And so it will be with social networks like Facebook and Twitter. These are big expensive beasts to run. Free memberships don’t pay for staff, servers, large buildings, Segways and funky cafeterias.
Up until recently Venture Capital was funding the growth of these services and the focus was on attracting users who in turn shared their life, loves and information. Eventually these networks had to start delivering a return to the VCs and shareholders and inevitably advertising would be the solution.
The good news is that the services are still free…. BUT you are now the product. All that information you have shared, all those like buttons you have clicked, all those groups you have joined have helped the networks understand more about you so they can attempt to deliver more valuable solutions to their real customers; the advertisers.
Ask most people what they think Facebook is for and they’ll say ‘it’s there to help me make friends’. Guess what? Facebook’s boardroom isn’t talking about how to make you more friends. It’s talking about how to monetise your social graph.” Increasingly that will be via a range of “targeted” products like Graph Search, Suggested Apps, Sponsored Posts and Sidebar Ads.
Facebook has been doing advertising for a while but its only recently that users have really started to complain about it. That’s because initially the ads were focused on the sidebar and we’d grown accustomed to that style of advertising on other sites and Google search results.
But the shift to mobile forced Facebook, and others, to rethink how they serve up advertising. There’s now room for sidebar ads on the mobile site so now the ads are steadily being seeded into your stream or newsfeed. And that’s not kosher according to some users.
Now Twitter is evolving from it’s Promoted Posts product to unveil its newest ad product, which enables “keyword targeting in timelines” allowing brands to serve up ads to users based on the content they’re actually tweeting. (Read more about it here)
The bottom line is you need to get used to it or unsubscribe. These networks need to make money in order to continue providing you with a “free” service. They will push the limits of your loyalty to their service over time, but as long as they aren’t losing more users than they’re gaining they won’t desist.
Whether you like it or not…you are now the product.
Social media has become ubiquitous and naturally the world’s advertisers and marketers are following the trend and allocating an increasingly larger share of their budgets to the leading social networks.
If the future of advertising is to start participating in the stream that people want to use and around 80% of active internet users are visiting social networks and blogs, then its only natural that the marketing dollars will follow. In fact, in the USA over 75% of brands have already incorporated social advertising into their integrated marketing budget.
So what does the social advertising landscape look like? The team at Uberflip have compiled this infographic to illustrate the increasing adoption of social ads among marketers, the amount of dollars allocated on these channels, and the effectiveness of these paid social media campaigns.
It is hardly breaking news to hear that there has been a massive shift in advertising spending in the last decade. Many traditional media outlets, especially directories, newspapers and magazines were affected early by the rise of online. Others, such as free-to-air TV, subscription TV and radio have seen more gradual erosion of their bases, but erosion nonetheless.
The problem for most traditional media is that the shift is far from over. In fact, its still only early days and the social networks are just getting warmed up in the advertising market.
The following chart is compiled by Borrell Associates and displays the ongoing migration to online advertising in the USA at the expense of many traditional media. There are some sizable falls in ad spend for some media here…and that’s just from last year to this year.
The initial growth of online advertising was in the areas of display (basically replicating magazine and press advertising) and the early online classifieds.
The launch of Google’s Adwords service saw search engines become major players in the advertising market. And they were different, a lot different. Suddenly advertising could be more contextual, more relevant, more cost-effective and much more measurable. And they were self-serve. Anyone could suddenly build and launch their own online advertising campaign in minutes. As a result, Google now owns 44% of the global online adverting market.
But now the social networks are ready to stake their claims.
Last year Facebook had 3.1% of the global online advertising market, despite never having been in a hurry to build their advertising business. Now they’re starting to take it seriously. Anyone who has used the Facebook Ads Manager tool will know it is very easy and intuitive compared to Google Adwords. Facebook’s Promoted Posts feature is even easier and can deliver great micro campaigns in the click of a button. Their new Graph Search feature is a clear signal that Facebook is about to step up even more in the advertising market.
Then there is Linkedin, quietly bubbling along with another easy-to-use advertising product aimed squarely at the employment market. Last year advertising on Linkedin accounted for 25% of their revenue, and that’s before they opened their API to marketers at the end of 2012. That will grow substantially in the next few years.
Now Twitter is muscling in on the action. The new Twitter Advertising API is a way for companies to automate more of their ad spending. The initial list of advertising partners isn’t very long, but is expected to grow quickly. The API, combined with Twitter’s self-serve ad platform, will allow advertisers to promote tweets based on what is trending and where the activity is.
In effect Twitter is heading in a very similar direction to Facebook. Google+ is presumably not far behind.
For social networks, in which the content generated by users is almost indistinguishable from the advertising offering tools that let advertisers automate their spending based on hard data will be far more lucrative than another generic banner ad.
The rapid rise of mobile usage is also another reason the social networks will grab even greater slices of the advertising pie. Their “integrated” advertising solutions are well suited to mobile display, whereas the display advertising of other media are not.
The shift away from traditional to online advertising will only continue to grow in the next few years as the social networks refine their offerings and mobile becomes our main screen.
The future of advertising27Feb13
The future of advertising is to stop trying to advertise to people, and instead start participating in the stream that people want to use. People will follow your brands if you contribute to whatever it is the people are up to.
This is a modified version of a statement Stowe Boyd made recently in a post. He was talking about the future of advertising on mobile but I feel it applies everywhere now.
In fact it nails it.
Stop advertising. Start participating and contributing.
Online display advertising is a tricky area. So many eyeballs, so much potential but is the model going to succeed in the long-term for big players like Facebook and Google or are there new threats looming? This infographic from Prestige Marketing nicely summarizes the global online display market, it’s trends and it’s best performing sectors, and throws in some nice tips for your own online advertising success.
Remember the classic John West salmon television commercial with the fisherman intercepting leaping fish from clutches of a hungry bear? The spot received 2.6 million views on YouTube when it first ran years ago and became a very successful campaign for the company. Here it is as a reminder.
Well now John West is returning to this happy hunting ground in the hope of repeating the success with a sequel. Starting Sunday 7 October, John West will launch a new TVC where the iconic John West fisherman is pitched against his long-standing nemesis, The Bear, and cast alongside a beautiful heroine for the first time.
We all know that “viral” success involves more luck than planning. The first commercial took off like a house on fire but is it possible to manufacture repeated success? The company is certainly giving this its best shot with high production values, cliffhanger endings and a Facebook page to follow the progress.
Will you be hooked or do you think its a it fishy?
Since the down of the commercial internet in the early 1990′s banner ads have been the default form of advertising. Google shook things up massively with their Adwords program but most media sites still rely heavily on banner ads for revenue.
Banner ads have always stuck me as old media imposing their old models on new technology. However, measurement is different as advertisers were encouraged to look at clicks rather than exposure, as they would have done with press display ads. Branding became less important and click-through became the goal.
The question is do banner ads really work? Are they effective? This nice infographic from the team at Prestige Marketing explains who’s clicking, who’s not clicking and why.
This blogsite has never existed as a money spinner. Sure, I sometimes promote the activities of my various businesses and that can be beneficial, but I have never tried or expected to make a dollar from publishing blog posts.
I’m also a big advocate of inbound marketing and tend to believe the rather funny recent study that found its more likely your will survive a plane crash or win the lottery than click a banner ad. That’s because we don’t go to our favourite websites to look at ads, we go for what that site offers; information, advice, entertainment etc. And its very rare that we are actually served up advertisements that are relevant to us.
Advertisements are pointless and annoying unless they are actually relevant and of service to readers. So that’s why I haven’t included any ads on Media Hunter or even on Urban Insider….until now.
There seems to be a lot of action this year around finally monetizing the communities and traffic that have grown around major social media networks. From day one, many have wondered where the revenue would come from amongst all the wonderful free services and networks we enjoy online. In 2011 it appears we’ll find out.
The biggest social platform of all, Facebook, has never been in a rush to monetize, preferring to build the base, grow the connections and steadily accumulate data on its members. Sure, over the last few years they have steadily added advertising which is increasingly targeted due to your Facebook “Likes” and activity. Now Facebook have announced that they are jumping on the group buying bandwagon with Facebook Deals. We heard at Social Media Club Sydney this week that Facebook Deals will be launching in Australia in the 2nd quarter of 2011. I believe you’ll start to see a lot more revenue streams appearing on Facebook soon.