posted: 2014-09-11 by Steven Grinberg

The marketing landscape has evolved dramatically with advent of search engines and even more so with social media. Traditionally, attention was purchased through advertisements presented across channels that offered one-way interactivity. People listened to the radio ad, watched the TV commercial, or saw the print ad and that was it. These advertisements might have been discussed later if they were exceptionally entertaining or influential. The effects the advertisements had on consumers were measured by researchers through various interviews and surveys throughout the ad-campaigns timeline. Search engines allowed consumers to perform their own research on company products and services before making a purchase. It beat the crap out of using the Yellow Pages for consumer needs, but it still followed the traditional model of organizations purchasing ads and displaying them on the search engine sites.

Social media allows for a more personal approach to marketing as it opens the door to two-way interactivity between the marketer and the consumer. It also allows the customers to discuss, promote, and share information about the product or service being offered, as well as the organization offering it. While this has increased the level of overall complexity for the marketers, it has also produced an incredibly large amount of information that can be utilized for across-the-board improvements.

The social media industry provides two channels of communication between marketers and their customer base. The first channel is the community, which marketers can use to have conversations, develop relationships, and gain followers. An example of a marketer interacting with the community would be a personal response to customer tweets. Some companies have entire teams dedicated to social media communities. The second channel is social media marketing, which allows marketers to advertise to the end-users. Both channels are immensely valuable, but they require different methods for undertaking and provide different outcomes. Being unnecessarily pushy or "salesy" within the community might have a negative impact on a marketers brand and it may even be counterproductive if the goals are sales-related. The advertisement channel is an even more complex monster.

The ad campaign has expanded from a set of small, entertaining, or eye/ear-catching spots to long, themed, conversations and followings. Storytelling is now the important approach to marketing. The effects of these new ad campaigns can be measured and modifications made to see what can be improved. These measurements and modifications can be made in real time thanks to various technologies offered by SNSs advertisement platforms and third-party tools.

Marketers Goals

Marketers have many simultaneous goals when they utilize social media, the top being to increase their customer exposure and loyalty and to increase traffic to their website. The remaining social media goals and objectives are also important. For example, link sharing is a technique used in search engine optimization (SEO). They are able to reduce budgets by automating marketing procedures and build relationships with other businesses. Top performing marketers invest significant amounts of resources into gaining insights about their customers through research and performance measurement techniques.

Even before a product or service is anywhere close to being available for purchase, short ad campaigns, part of the proof of concept phase, can be run on SNSs to determine several key factors such as ideal target customers, how much they would be willing to spend, and best marketing approaches. The incredible magnitudes of data available to marketers has become so important, yet such a logistical nightmare, that marketers have had to depend on data mining and business intelligence professionals in order to filter through it all and gain value from it. As the image shows, there are a lot of reasons for marketers to use social media. Let's take a look at how an ad campaign can be developed.

The top social media platforms used for advertising provide a bidding system that allows marketers to define a budget to be spent on an ad campaign over some period of time. The ad campaigns are based on keywords or key phrases that the marketers hope the social network site users will query. While Facebook and LinkedIn use this keyword model, Twitter uses a "following" model that gauges the number of people that follow the marketer's advertisement tweets. The bid prices applied to keywords are dependent on popularity of the keyword. That is, keywords that are queried at higher levels end up costing more than keywords that are not seen as much by end-users. If you have wondered what the back end of an ad campaign on a leading SNS looks like, today is your lucky day.

Fusebed Ad Campaign Overview

The above shown provides an overall summary of a Facebook ad campaign including the start and end times, the daily bidding budget, total spent, and statistical information about the results of the campaign. This was during the proof of concept phase for Fusebed, an event management platform, which was carried out during the 2013 holiday season. An August 2, 2014 New York Times article by Vindu Goel, very nicely describes the effort put into an ad campaign on the leading SNS: Facebook. The time and effort with tests and adjustments are outlined perfectly. The tests and measurements can be incredibly complex and the data being process extremely vast.

Fusebed Ad Campaign Statistics

Marketers analyze many aspects of performance during an ad campaign. Advertising expenditures are high and there is no room for mistakes. Here you can see what is being analyzed. Big indicators are Clicks and Cost, which would be based on a cost-per-click (CPC) or cost-per-mille (CPM; this is per 1,000 views of the ad) model; and click-through rates (CTR), which is the ratio of the number times an ad was clicked to the number of times the ad was displayed. The targeted demographics are outlined and you can see an example of the ads that the end-users might see. This is the type of analytical information offered by all the leading SNS with an advertisement platform. There are many other important metrics that usually aren't measured by the SNSs as this would be the responsibility of the marketer. These might include:

  • The customer acquisition cost (CAC), how much was spent in marketing dollars per customer
  • Viral coefficient, how many new visitors do current visitors bring to a site
  • Conversion rates, which measures the rate of site visitors turning into signed-up members or paying customers

There exist a number of tools that can be integrated into the marketer's websites in order to gauge these and other metrics, as well as tools and services to manage the entire social media marketing process. Google Analytics is a leading solution used by website owners across the globe. A bit of code is added to the website and Google is able to provide an abundance of information such as audience characteristics and behavior, cross device measurements, or advertisement campaign performance. Other analytics solutions by large companies, such as Adobe and IBM, are available as well as more affordable options from smaller companies, such as KISSmetrics or Woopra. HooteSuite is a leading social media management tool that allows users to create, schedule, track, and analyze social media campaigns across multiple SNSs. Other excellent tools that offer similar or related capabilities include HubSpot and Moz Pro.

The SNSs, end-users, and marketers do not live in a vacuum with no outside forces. There are major exterior pressures that have positive and negative effects on SNSs. Next, we try to understand what might be some of the big external influences and trends that can help us predict where the industry might be going.