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The Bursting Social Media Advertising Bubble
schwit1 writes One of the great "paradigms" of the New Normal tech bubble that supposedly differentiated it from dot com bubble 1.0 was that this time it was different, at least when it came to advertising revenues. The mantra went that unlike traditional web-based banner advertising which has been in secular decline over the past decade, social media ad spending — which the bulk of new tech company stalwarts swear is the source of virtually unlimited upside growth — was far more engaging, and generated far greater returns and better results for those spending billions in ad bucks on the new "social-networked" generation. Sadly, this time was not different after all, and this "paradigm" has also turned out to be one big pipe dream. According to the WSJ, citing Gallup, "62% of the more than 18,000 U.S. consumers it polled said social media had no influence on their buying decisions. Another 30% said it had some influence. U.S. companies spent $5.1 billion on social-media advertising in 2013, but Gallup says "consumers are highly adept at tuning out brand-related Facebook and Twitter content."
I'll say we're tuning it out. With AdBlock we don't even receive it.
Are the customers able to recognize whether they got influenced? I thought that current advertising methods are predominantly trying to influence subconsciousness rather then consciousness decisions.
No one is ever influenced by advertising, ask around. People say "no, I'd never buy something because it's on TV" but those infomercials stay in business for a reason.
So polling people and asking them if advertising is effective on them is a bit of a red herring. Like IQ tests - logically half the world has IQs less then 100. Oddly, I've never met any of them.
Now the question 'is social advertising effective' is certainly open for debate, but not because some survey says people believe it's not effective on themselves.
Min
On the whole, I find that I prefer Slashdot posts to twitter ones because I don't get limited to 140 chars before
1. It's always different this time.
2. It's not different this time.
Why can't we celebrate how the Internet continues to resist freighting information with advertising? That's one of its best attributes.
1.) Social media advertising isn't as effective as advertisers hoped.
2.) Social media can be mined for data about your products, what people think of them, and overall opinions about your company. It is also a tool for engaging with customers.
Point 2 is much more useful to companies that 1; which means the real money in Twitter et. al. is data mining, not advertising.
I'm a consultant - I convert gibberish into cash-flow.
"According to the WSJ, citing Gallup, "62% of the more than 18,000 U.S. consumers it polled said social media had no influence on their buying decisions."
I suspect most people would answer a poll saying advertising NEVER influences their buying decisions. Independent analysis may prove otherwise. Coke, GM, or whoever don't spend billions on advertising because they think it helps. They have done lots of tests and analysis, and they know it helps. Sure, lots of advertising is a waste. But targetted advertising at the right time and place can have a ROI.
Ninjas don't carry tic tacs
The reason the bubble is bursting is no doubt another case of ad overload. It's a cat-and-mouse game that's been going on forever - advertisers flood a given communication medium with advertisements and people find a way around it. TVs have things like the DVR (and earlier the VCR), one of the key selling points of which is being able to record a show and fast-forward through the commercials. There's also the TV culture of using commercials as a time to get a snack, go to the bathroom, or do something else and then come back afterward.
The internet is becoming the same way. First it was pop-up and pop-under ads, which caused all of the mainstream browser developers to implement pop-up blockers as an integrated component of the browser. Sure, they're not 100% effective and many advertisers have tried to find workarounds for it (such as ads embedded into the website layout that cover content unless clicked away) but for the most part, the pop-up is nowhere near as effective as it used to be.
The same thing is happening for banner and flash ads. In the days when Internet Explorer had near-100% market share, it was comparatively difficult to install an ad blocker, as most of them came as third-party programs that had to be installed separately. Now, most of the major browsers (IE still doesn't to the best of my knowledge) have a modding interface that allows for easy installation of things like Adblock.
Advertisers have to learn how to advertise smart, rather than try to be as intrusive as possible.
"Every time you're exposed to advertising in America, you're reminded that this country's most profitable business is still the manufacture, packaging, distribution and marketing of bullshit. High quality, grade-A, prime-cut pure American bullshit."
I hate polls that take some factual statement that is either objectively true or isn't, and then ask people whether they think it's true, as if that tells us anything about the factual matter rather than just the biases of the poll sample.
Social media advertising either influences or it doesn't. And it will influence or it won't regardless of whether zero, half, or all of the country thinks it does.