Is it easier for businesses to find their target market via social media?

Recent figure show social advertising is trending….

  • Social Media Ad spend is expected to be on average 19.5% of businesses total marketing budget by 2017.
  • Global Social Network Ad revenues are expected to double 2012 figures and rise from 7 to 14 billion in 2014.
  • 64% of advertisers expected to increase their social media advertising budget during 2013 and 70% of advertisers are currently spending on social media advertising.
  • By 2015 Twitter is expected to net $1.3 billion in worldwide ad revenue more than 60% of which will be from mobile ads.
  • 80% of users prefer to connect with brands on Facebook, while LinkedIn generates the highest visitor-to-lead conversion rate – nearly 3 times higher when compared to Facebook and Twitter.

Social Advertising Platforms

Pay per Click advertising allows marketers to pin point their spend directly where consumers are – engaging on social media.  In last month’s blog we looked at Search PPC, this month we focus on Social PPC.

Leading the social media advertising platforms are Facebook and Twitter followed by LinkedIn, Pinterest and Tumblr to a lesser extent.  A recent AdAge survey ranked advertising platforms, Google was the clear winner followed by Facebook then Twitter.

According to the Amercian Express Open Small Business Monitor, the percentage of small businesses using social media has risen in the past year, with 37% saying they use Facebook (23% more than 2012).  The number of small businesses on LinkedIn and Twitter has increased by more than 50 percent year-on-year.

Last month Twitter opened up its self-service ads platform to UK, Ireland and Canada.  Businesses can now bid on keywords and hashtags similar to the set up of Google’s Adwords.

Facebook quotes that the majority of their 1 million+ advertisers are small and medium size businesses.  80% of users prefer to connect with brands on Facebook, while LinkedIn generates the highest visitor-to-lead conversion rate – nearly 3 times higher when compared to Facebook and Twitter.  LinkedIn offers ‘Sponsored Updates’ to help raise brand awareness and advertise to the LinkedIn audience.  LinkedIn provides a focused Business-to-Business platform, allowing targeting by industry, sector and job title, Ad formats include text and image and video ads.

The Leader – Facebook

In terms of reach Facebook wins hands down with 1.15 billion active users sharing 4.75 billion items daily compared to Twitter’s 232 million active users posting 500 million tweets a day.  So Facebook has almost 5 times as many users and ten times as many daily shares as Twitter.

Cost figures are significantly higher for Twitter with an average cost per impression (CPM) at £2.14 compared to Facebook’s £0.36.

Facebook is a clear winner in terms of market share – holding 15.8% share compared to Twitter’s 1.85%.

Facebook used to offer a wide variety of ad formats but the list was halved in June this year :

This was to simplify the process and streamline the offering.  In the words of Facebook: “Our vision is that over time, an advertiser can come to Facebook and tell us what they are trying to achieve, and our ads tool will automatically suggest the right combination of products to help them achieve it”.

Ad formats include for example: App ads (to get users to download your app) or Page-like ads (increasing followers) etc.  Rumours are however, that many of the original formats did not work or duplicated other options – perhaps another reason for the recent overhaul?

In recent weeks, Facebook has introduced ‘custom audiences’  and ‘lookalike audiences’ which now allow small businesses to find people who have similar interests to their existing fan base.  This investment into new developments to improve the advertising offering and steer towards more of a targeted approach, shows this platform obviously predicts a sharp increase in revenue from ads in the months to come.  The revenue potential is huge if you consider 20 million users have a free ‘page’ on the site; imagine if they all spend on ads.

Too many ads?

Rumours within the advertising industry are that Facebook may be overloading users with ads and should there be an ad threshold?  Facebook has already capped its sponsored posts this quarter to on average of 1 in 20.  Could this be a lesson Twitter can learn from?

One to watch – Twitter

Current figures show that Twitter attracts just 13% of social media advertising budgets compared to 57% spending on Facebook.  Click Through Rates (CTR) are much higher on Twitter though according to AdWeek 1-3% for Twitter compared to 0.119% for Facebook.

In terms of mobile ads, Twitter has an advantage which is the ad appears in the main feed and so is clearly seen on a smaller screen such as a mobile.  Facebook ads on the other hand are off to the right and not always clearly visible when viewed from a mobile device.

In comparison to Facebook’s offering, Twitter’s ad format is simple:

  1. Promoted Tweets
  2. Promoted Accounts
  3. Promoted Trends (not available to small businesses)

Following its recent IPO in early November, Twitter has already begun rolling out new features and as mentioned its self-service ad platform is now available in the UK for the first time.  Could Twitter be the one to watch in 2014?

Emarketer have recently reforcast for Twitter, increasing their original figures.  New predictions show more than half of Twitter’s ad revenues – about 53% – will come from mobile advertising this year, up from virtually no ad revenue from mobile in 2011.

Social Media Best For Businesses To Find Audience? | Blog

By 2015 Twitter is expected to net $1.3 billion in worldwide ad revenue, and more than 60% of that will be from mobile ads.