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Why Social Media Lets David Kick Goliath's Ads

  |  November 18, 2010   |  Comments

It is the quality of the content and interaction, not the quantity of big dollar ad placements that drives success.

Common wisdom among traditionally-minded marketers is that big brands have all the muscle and use their scale to capture a disproportionate share of voice, overwhelming smaller players. Organic and paid social media, with its user-driven traffic and performance-oriented paid advertising turn that notion on its head. Small companies that have the skills to engage their customers and drive positive return on their social spend can slay the marketing giants.

Organic social traffic driven by Twitter followers, Facebook fans, or a YouTube video message going viral cannot be bought or scheduled. It has to be earned. The good news for smaller advertisers is that this levels the playing field. It is the quality of the content and interaction, not the quantity of big dollar ad placements that drives success. Players that have worked the organic social media space well include the mighty and the mini. We are all aware of the Old Spice Guy and many have heard of Virgin Atlantic's Twitter success. But organic social media has also benefitted smaller brands. The brand Tipp-Ex, with its "Hunter Shoots a Bear Campaign," has seen its YouTube videos go viral attracting massive audiences. Similarly, online broker Zecco saw a 300 percent increase in ad engagement rates after working with Twitter. It would be a mistake to attribute social media success to company size. Any advertiser, big or small, with the creative chops and social media savvy to engage users can be the BMOF (big man on Facebook).

Like the organic side of social media, success in paid social depends less on an advertiser's overall budget and more on the performance - both engagement and financial return - of their ads. Ads purchased on the Facebook platform show up on the right side of the page and have notoriously low response rates. However, if the user community "Likes" an ad, it will be moved to their news feed and can easily be shared with friends. Once an ad is "Liked" it also gets preferential treatment in the Facebook search results. Focusing on engagement helps both organic as well as paid social media efforts. But there is more to the paid social media success story than engagement.

The advertiser that can afford to outbid the competition for clicks on Facebook is the advertiser that can optimize their program to create more profits from each click. Winning social advertisers, the marketers that can outbid the competition for the right audience, will drive efficiency and results by measuring their efforts and continuously optimizing the elements (bids, targets, creative, offers, etc.) of a campaign. Yes, it's true that advertising giants can outspend the little guys and lose money trying to buy share. But that is not a sustainable strategy. Fortunately for the little guys, driving higher ROI on a paid social media campaign is less dependent on the scale of the buy than on the skill required to optimize the program.

According to published forecasts, social media spending is poised to explode with revenues rising to the multi-billion dollar level by 2012. As this market grows, the burgeoning power of social media as an indispensible part of an integrated marketing program will become clear. Social sites like Twitter, YouTube, Foursquare, and Facebook will be essential components of all advertiser media portfolios. The good news for advertising underdogs is that in the social arena, size does not matter. The winners in social will be the advertisers that are better at engaging the audience and optimizing results.

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ABOUT THE AUTHOR

Jonathan Shapiro

Jonathan was CEO at MediaWhiz until July 2011. He was responsible for guiding strategy and operational execution, including overseeing the integration of the company's suite of marketing services, leading the development of new and unique capabilities, and ensuring the organization delivered better results for its performance marketing clients.

Before joining MediaWhiz, Jonathan was president of Lillian Vernon Corp., where he was responsible for the management of the company and its subsidiaries. Lillian Vernon was sold to a group of investors in July 2006.

Previously, Jonathan was the chief strategy officer of DoubleClick, where he was in charge of setting strategy and overseeing M&A. He began his tenure at DoubleClick as vice president responsible for the company's Internet Advertising Network before being appointed senior vice president of the company's Abacus online division, where he created DoubleClick's data strategy and oversaw development of new online targeting products and services.

Additionally, Jonathan was the executive responsible for developing United Media's original Web businesses (The Dilbert Zone, Snoopy.com, and Comics.com), and was a senior consultant with McKinsey & Co.

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