Nielson Report Gauges Companies’ Approach to Advertising on Social Media
By TANZINA VEGA
Since the arrival of social media platforms, companies have tried to figure out how to best use them to get their messages to consumers, often with mixed results. Some brands have embraced the notion that social platforms like Twitter allow constant interaction, for better or worse, with their customers.
Others have turned away from some strains of social media, as General Motors did last spring when it stopped advertising on Facebook while raising questions about the return on its investment. The move had a ripple effect in the advertising world, with many brands questioning whether the costs of being on social media were worth it.
A new report issued Tuesday by Nielsen and Vizu, a research company owned by Nielsen, shows that brands think they might be turning a corner, specifically when it comes to paying for their use of social media.The report examined the opinions about social media marketing among more than 500 digital media professionals — including brand marketers, media agencies and advertisers — from September to October 2012.
The study found that that 89 percent of advertisers continued to use free social media products. Nielsen did not release the names of specific social media platforms mentioned by the respondents, but they are likely to include Facebook and Pinterest, as well as Twitter.
Three quarters of the companies surveyed said they were also spending more for social media content, which could include paying bloggers to write posts about a product or using third-party technology to push videos on to the Web in the hope that they become viral.
Seventy percent of the advertisers surveyed said they dedicated up to 10 percent of their budget to paid social media advertising, while 13 percent dedicated more than 21 percent of their budget. Those numbers are expected to increase in 2013.
The results come as companies like Twitter and Facebook are making more diverse advertising options available to brands. Last year, Twitter announced a number of advertising and media initiatives, including a survey product that enables marketers to ask Twitter users a handful of multiple-choice questions. Facebook began testing a new advertising mechanism using a technology called real-time bidding, which allows advertisers to place bids on ad space at specific times.
“Advertisers are starting to look at social media as an integrated part of their advertising strategy,” said Jeff Smith, the senior vice president of product leadership for advertising effectiveness at Nielsen.
Still, companies retained some skepticism about social media strategy, the survey showed. While companies may expect to spend more to market their brands, they also want to be able to quantify the results of their campaigns. A third of the advertisers surveyed said they were unsure about the effectiveness of social media. The same percentage said they were unsure how to measure the return on their investment.
The majority of advertisers surveyed, 42 percent, said they wanted to measure their online campaigns using the same tools they use for offline campaigns, like sales generated and gross ratings points, while adding more measurement tools specific to digital campaigns, including “likes” and click-throughs.
Advertisers are able to tailor ads to specific groups of online users using cookies and other technologies, but they have often relied on whether consumers click on those ads as the main form of measuring how effective those ads have been.
At the Advertising Week gathering last year, Facebook announced that it was moving away from counting clicks as a metric and moving toward a measurement similar to the gross rating point used in television. The company said it was able to tell whether an ad was effective by combining data on when the ad was shown to a user with data about whether products had been sold. The move is meant to help what is known as “brand advertisers,” whose goals may be less tangible than those of direct response advertisers.
A Facebook representative declined to discuss the company’s paid advertising business. Facebook will announce its fourth-quarter earnings on Wednesday.
Facebook ad tools record modest uptake
NEW YORK: More than two-thirds of US advertisers are yet to use the various new products Facebook has introduced during the seven months since it went public, new figures show.
Advertising Age, the magazine, and CITI, the bank, surveyed 701 marketers and media executives in January to garner their views of the social network, following up a similar exercise undertaken in June 2012 after Facebook’s IPO.
Some 70.7% of respondents said they had yet to use a ‘sponsored story’ in a campaign.
But of the 29.3% that had used ‘sponsored stories’, the great majority were pleased with the results.
Over 84% said they would use the product again, while 79.6% were ‘very’ or ‘somewhat’ satisfied with the return on investment (ROI) they had received from campaigns utilising this channel.
This performance stands out against a more general question asking respondents to compare Facebook ROI with other platforms like Google or Yahoo. Some 29.3% felt it was inferior, a further 46.7% thought it was about the same, and the remaining 23.9% said it was superior.
Just 12.8% had used Facebook Exchange, where brands can bid on ads targeted at specific Facebook users based upon data from third party demand side platforms.
Overall, 85.1% of respondents used Facebook as a marketing tactic, the same as the June 2012 survey. But more are now choosing to buy ads there – 61.5% compared to 55% seven months earlier.
And 58.2% expected to ‘significantly’ or ‘modestly’ increase their Facebook advertising budget in the coming year – a slight increase on the earlier survey figure of 56% – while 37.2% indicated the budget would remain unchanged.
Facebook’s mobile alignment also appears to be paying off. “We have basically retooled and focused the company around mobile,” Mike Schroepfer, Facebook’s vice president for engineering, said in the middle of last year.
And now 68.5% of marketers now say Facebook’s mobile app is ‘somewhat’ or ‘very’ important compared with 63% seven months ago.
Data sourced from Advertising Age; additional content by Warc staff , 26 February 2013
Here’s A Diagram Of How Facebook’s FBX Ad Exchange Works
Jim Edwards | Jan. 3, 2013
BMO Capital Markets analyst Dan Salmon did the world a favor on New Year’s Eve when he published a note to investors that included a diagram of how Facebook’s ad exchange, FBX, actually works.
FBX is a real-time bidding ad exchange in which advertisers drop tracking cookies on users’ browsers as they surf the web — shopping, for instance — and then retarget those users with ads once they enter Facebook , perhaps to remind them to come back to the sites they were shopping on.
Sounds complicated, yes? This pretty picture should help: