First, some facts:
- Spending on advertising on social media in just the first half of 2016 topped $7 billion dollars, according to the Interactive Advertising Bureau (IAB) study done by PricewaterhouseCoopers. Spending continues to grow.
- eMarketer projects US 2016 social media ad spend at $15.36 billion for the year.
- Ad Age reports that marketers are expecting to nearly double that investment in the next five years based on results from a Duke University’s Fuqua School of Business / American Marketing Association /Deloitte study.
- Duke/AMA/Deloitte survey said social media spending makes up more than 10% of their marketing budgets and they expect that number to grow to 20.9% in five years
Then, the big question: Does it work?
What’s incongruous to me is that most marketers still don’t know if it works. Seriously. Almost half of all of the marketers responding to the Duke/AMA/Deloitte survey say they have no ability to show the impact on their business.
A whopping 88% of senior advertising/marketing executives say they have no quantifiable results from social media.
Only 11.5% said they can prove a positive impact by social media spend using quantitative measurement – trackable, direct line measurements. About 40% said they can point to some impact through qualitative measurement – you know, things like “my friends tell me they see my stuff.” So even giving social media the benefit of the doubt, less than 12% say they can show it works.
47% say they can’t show any impact in any case.
Advertising has always been about getting the word out, getting people into your place (whether brick-and-mortar or online), and getting people to buy what you’re selling. Digital promised a level of metric transparency never seen before in advertising. It promised a way to views, clicks, and conversion rates.
If it’s so transparent, why can’t we prove it works?
I’m not trying to put down digital advertising. We have plenty of clients that use it well and see results. But people that think it’s the “magic answer” and they can “do it themselves” for a “fraction of the cost” are deluding themselves. The big guys can’t do it and they’ve got all the money in the world to spend. Even when they do, they can’t prove it works.
And that’s before we talk about problems with ad tech, ad fraud, and reporting bad metrics (like these stories I wrote in the past six months):
- Facebook has been providing inflated video metrics for the past two years
- Here we go again: Facebook estimates “bug” overstated unique reach by 55%
- The dirty little secret of digital ad networks
- Twitter now admits flawed video ad counts, some off by 35%
- Biggest ad fraud in history? Hackers stealing $3-$5 million dollars a day using video ads
- Digital ad market could be 2nd largest revenue source for organized crime
Some things haven’t changed over the years
Getting the right message in front of the right person at the right time is still the basic tenant of great marketing. How you get that message and where you show it has changed. Social media, and digital advertising, can be a great alternative to traditional media. After all, it’s all about reaching people in their environment. In some cases, it may represent a better strategy. And we know empirically that combining a consistent message across multiple platforms (traditional sources like TV and various digital campaigns) is the most potent combination of all.
Like anything else, if it seems too good to be true, it probably is. Don’t be fooled by the “bright shiny object.” It’s worth saying again: the key is using the right tools at the right time with the right people.