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.
by Ben Plomion
VP, Marketing & Partnerships
In this metaphor, marketers play a crucial role in digging for and collecting data about users—from the pages they visit, to the items they search for, to the social graphs they share with—and refining it to deliver unique and relevant messages. We call this new practice “programmatic marketing,” and it’s the future of digital advertising.
How Programmatic Works
You may already be familiar with one of the most common types of programmatic marketing: retargeting. This marketing tactic allows you to target past visitors to your site with relevant display ads as they browse the Web, and it’s the go-to strategy when you want to extract maximum value from an existing customer.
However, retargeting has evolved during the past few years or so, and there are now more than seven types to retarget users. The most exciting of these is programmatic site retargeting, or PSR. By crunching an array of data points, such as traffic source, some retargeting companies are building a PSR score for each visitor that tells them how much to bid to serve that visitor a display ad.
When you want to attract new customers, another type of programmatic marketing is search retargeting. With search retargeting, you can target people—including people who have never visited your site—with display ads based on the keywords they’ve entered into search engines. The technique is uniquely effective because, as with standard search engine marketing, it leverages the power of intent that’s revealed by online searches.
Media buying, however, is only one application of programmatic marketing. For B2B marketers, it can also be a great way to optimize the content you serve prospects during their first visits to your company’s site. For example, if a potential client lands on a design agency’s site after reading an article the agency’s CEO wrote about HTML 5 vs. mobile apps, then the agency might display information on the home page about its mobile Web expertise, thus increasing its chances of landing the prospect.
This same strategy can also work across multiple company sites. Years ago when I worked at GE Capital, my team was looking for ways to increase conversions on our credit-card page. Our plan was to show our credit-card offer to users on our various company sites who had visited our credit-card section without converting. Frustratingly, the technology wasn’t quite ready at the time, but today savvy companies can easily tailor their offerings to specific customers.
One of the key advantages of programmatic marketing is the ability to eliminate display waste. When done right, programmatic marketing helps you serve ads to only those users who are likely to convert, increasing media efficiency and driving down media costs in the process.
In addition, programmatic marketing allows you to optimize the user experience on your site. As mentioned above, the content on a site can be tailored to a user’s browsing or search history. This is the future of business sites, where every visit is as unique to visitors as their very own Flipboard.
Last, the potential for hypertargeted email marketing is astounding and currently underestimated. When you marry behavior data (the products consumers see on a retailer’s site) with CRM data (previous transactional data), it’s a recipe for a big boost in sales.
Programmatic marketing is an exciting, new technology, but it doesn’t come without challenges for CMOs. At many companies, CMOs will find themselves wrestling for control of first-party data—crucial for programmatic marketing—with their CTOs.
Once you take control of your data, data aggregation becomes the next hurdle. Data management platforms (DMPs) are a good solution for this because they skillfully integrate the first- and third-party data you need to successfully execute your programmatic marketing plan.
Next, you want to avoid hiring multiple retargeting vendors, even though it’s tempting to do so in order to achieve scale. When you have multiple retargeting vendors working off of the same data, they’ll end up bidding against each other and driving up the price of impressions.
A few retargeting companies recently partnered with Facebook to allow marketers on FBX, the Facebook ad exchange, to target users based on the keywords they’ve entered into search engines. While the venture is new, the early returns have been very promising. Since Facebook accounts for 25 percent of all U.S. page views, advertisers can expect that FBX will carry search re-targeting into the mainstream.
Programmatic marketing, in other words, can no longer be ignored. CMOs must embrace it, implement it, and become comfortable with it.