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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.
Not in decline and certainly not for over a decade. They have been going up in both volume and price. Look at google's revenue numbers, of which a big portion is banner ads. Sure, they might not be the buzz word of the day, but banner ads still rule.
-- these are only opinions and they might not be mine.
As opposed to a holy increase as in "Holy shit, we're actually making money with these ads?"
Spectacular, perhaps?
"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
Informational: This is what most people think advertising is all about. It provides you with information about a product. It might be telling you a new product exists, or just a new flavor/kind of an existing product. It might tell you about what it does, or the price, at heart it is simple and easy to understand - people can't buy it if they don't know about it.
Branding: This type of advertisement is not about information, it is about a feeling. It's what most of those 'cool' superbowl ads are trying to do. It's why Coca-cola and Apple keeps advertising (everybody already knows about Coca-Cola and they rarely talk about price/new products). This is about creating the feeling that this product is the kind of product that people like you buy. It also makes people believe the product is higher quality, because look, they can afford to advertise. (which also implies they have insurance to pay out if they accidentally put lead pain in your toothpaste, as opposed to that store brand you never see on TV).
Because lay people don't understand branding, they routinely underestimate the value of advertising.
excitingthingstodo.blogspot.com
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."
In English, it means "from age to age" or "generational." This meaning is actually older than the meaning you're probably thinking of.
It ultimately comes from the Etruscan word saeculum, via Latin. In Etruscan & Latin, it meant the amount of time needed for a complete renewal of the human population, and if I'm remembering correctly, it was eventually standardized at 110 years.
I believe that all Romance languages use some variant on seculo as their word for century.
Secular as in "generational" or "over long periods of time." It's a perfectly valid use of that word, if a bit uncommon. In fact, that meaning of secular is much, much older than the (non)religious meaning you're thinking of.
Coke isn't a billion times tastier than Joe's cola. It sells a billion times as much because it's been advertised a billion times as much.
It sells a billion times better because it's available just about everywhere and people know that it tastes like crap, but they don't know whether Joe-Bob's Home Cola tastes better or is recycled pig slurry. Joe-Bob could spend billions advertising Joe-Bob's Recycled Pig-Slurry Cola, and it still wouldn't sell as well as Coke does.
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.
....since I suspect it's based more on consensual delusions & back-scratching within the industry than actual data.
Does Nike *actually* get $3 million more profit if they have a superbowl ad, than if they didn't? If they don't, then do they really need to pay that cutie-pie that is the assistant to the assistant director $85k/year to fetch donuts and sort the mail? Or the still photographer an annualized contract rate of $160k/year to shoot the 'making of the commercial' art book pictures? Aside from the shlubs who sling lights and mikes and do the tech work, the media industry is generally staggeringly overcompensated. I wonder when someone will notice?
-Styopa
Most advertising doesn't really affect buying decisions. Sometimes you might see something new, but mostly it's Coke, Budwiser, etc., things that everyone has known about for decades.
The funniest online ads I see are when I search for or buy something... and then see an ad for that exact thing a few minutes later on some sidebar ad. Hey, dipshits, I already know about that thing you just advertised BECAUSE I JUST WENT ONLINE TO LOOK FOR IT AND BUY IT!
This is a little bit like paying someone to hold up a sign for Ford cars to show to people that have just left a Ford car lot.
I honestly don't understand the effectiveness of advertising, but that's just because I ignore most of it, and of the stuff that gets put in front of me, none of it influences a single purchase decision I make. I would much rather see a product for myself or rely on a non-sponsored recommendation from an acquaintance.
It boggles my mind that there are humans that are controllable enough to fall for the "Oooo, here's an ad!" --> "Let's click on it!" --> "Psychologically engaging content designed to sell me something" --> "Let's buy that!" chain of events. It must work, otherwise there wouldn't be a whole science behind advertising / consumer psychology, but I don't get it.
It seems to me that if you have a good product, it will sell itself and all you need to do is get a few people to try and recommend it to their friends. If you can do that, then you're just wasting money on traditional ads. Everybody knows Rice Krispies exist, and some people find them tasty. Why does Kellogg's have to tell the world over and over again that they exist?
Oh well, I'm not looking forward to the 40+% drop in stock market values that's coming with the next bubble pop, but I guess that's the way the new new economy goes.
I have clients who have basically thrown their money into a facebook toilet; and I also have clients who have reaped huge benefits. The key for the ones where it worked was that they knew exactly who their customers were and very carefully measured the results and could then compare the value they got from facebook as compared to all other media including billboards. Facebook was the hands down winner and was more than 100x cheaper than things like radio on a per customer generated basis. On a side note billboards were far less effective but the best of the traditional media.
But that only applied for a few narrow products. I don't think it would work very well for a high commitment product such as a car. I would not be surprised if the car companies have tried facebook and spent more in advertising per customer generated than they got back in profit per car. For instance I would recommend facebook for a TV show on tonight, and as a reminder to listen to some radio show. But it would require highly targeted advertising. So for Game of Thrones it probably isn't too hard for them to nail GOT watchers on Facebook with pinpoint accuracy and to make sure the ads were even episode specific. But for NBC to remind people to just watch NBC in general, probably a waste of money.
So basically I would dismiss anyone who makes any generalizations about social media advertising as either being good or bad. It is a very specific tool that is very good for a narrow range of jobs.