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The Bursting Social Media Advertising Bubble

Posted by samzenpus on from the cost-of-a-tweet dept.

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."

7 of 254 comments (clear)

  1. Tuning it out? by XanC · · Score: 5, Insightful

    I'll say we're tuning it out. With AdBlock we don't even receive it.

    1. Re:Tuning it out? by Anon,+Not+Coward+D · · Score: 5, Insightful

      i do use it... but i'd like to see statistics regarding how prevalent it's usage really is. I mean beyond the geek circle :)

      my guess is that adbloc isn't really an issue (unless firefox and chrome make it a default plugin).

      of course the point that marketing effect on consumer behavior is largely unconcious remains.. so that's the real handicap on this study

      --
      Sometimes it's better not having signature
    2. Re:Tuning it out? by Znork · · Score: 5, Insightful

      Social media advertisement is the sales guy sitting down at your table in the bar and trying to sell you a new refrigerator when you're hanging with friends because he saw you looking at refrigerators two weeks ago in a shop.

      Search or content related advertising is the sales guy trying to sell you a new refrigerator when you're looking at refrigerators.

      One of those has a chance to make a sale and might even be appreciated. The other is just irrelevant.

      For sales, it's pointless to know what a customer is interested in if you don't know when they're interested in it, which means you're always better off targeting content over people because content has both temporal targeting as well as interest targeting implicitly right, while person profiling and social media presentation only gets a generic long term interest profile and implicitly targets people doing something other than being interested in products.

  2. Are customer able to evaulate that objectively? by rastos1 · · Score: 5, Insightful

    62% of the more than 18,000 U.S. consumers it polled said social media had no influence on their buying decisions.

    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.

  3. Two things every bubble has in common... by Anonymous Coward · · Score: 5, Insightful

    1. It's always different this time.

    2. It's not different this time.

  4. Why "Sadly"? by unamiccia · · Score: 5, Insightful

    Why can't we celebrate how the Internet continues to resist freighting information with advertising? That's one of its best attributes.

  5. George Carlin said it best... by JoeyRox · · Score: 5, Insightful

    "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."