Yesterday, Facebook reported blow-out earnings that handily beat Wall Street analyst expectations. The world’s largest social network generated $6.24 billion in ad revenue last quarter, and has seen ad revenue from mobile grow 81% in the past year alone.
While some social platforms, like Twitter, have struggled recently as fast-growing upstarts like Snapchat command more ad dollars, Facebook’s success isn’t surprising in light of the fact that, as detailed by Social Media & Marketing Daily’s Joe Mandese, a new Social Media Advertising Report published by Advertiser Perceptions finds that nearly a quarter of digital ad spend is now directed at social.
But while social is proving to be a formidable, lucrative channel, advertisers might not be using it to its full potential.
The Advertiser Perceptions’ study, which polled several hundred ad agency and marketing executives, found that the majority of advertisers are using social to drive brand awareness, not performance.
In fact, just 38% of those surveyed indicated that they’re using social in an attempt to drive offline sales.
What’s more, under half said their organizations have sophisticated infrastructure and strategy for social, and just 10% said their organizations have “expert” knowledge of social media marketing.
This begs the question: are advertisers using social to drive brand awareness because it’s the best use of the medium, or are they doing so because they don’t have the knowledge, skills and tools to deliver performance?
Surprisingly, despite the fact that Facebook gives advertisers a plethora of ways to segment and target users, 20% of advertisers in the Advertiser Perceptions survey indicated that they are prioritizing reach and engagement. For comparison, only 4% are prioritizing geographic targeting.
Facebook’s geotargeting capabilities are very powerful and are a real boon to performance marketing when employed in the right fashion. Facebook’s other targeting options, which include Interests, Demographics and Behaviors, can be equally powerful.
The good news is that Facebook is confident that its ads drive actions, such as sales, and has been working on the attribution challenge for some time.
As advertisers become more sophisticated and gain a better understanding of how their campaigns are influencing customers, it’s likely many will become more aggressive in using Facebook with a performance marketing mindset.
What are some of the major developments that are likely to shape multi-channel marketing in 2017?
Brands have been upping their investments in new ad products from popular social media services, but are they getting their money's worth?
Instagram is determined to introduce as many new features as possible in 2016 and that's why it has launched Live video on Stories, as well as ephemeral posts on direct messages.
Audience targeting can be challenging in social media, especially when brands make quick assumptions about their target users. How can you avoid generalisation and what are the real benefits of it?