Why Social Media Advertising Is Set To Explode In The Next 3 Years
Display ads and paid search ads both have their place, but columnist Sonny Ganguly argues that social media advertising is quickly becoming a powerful player in the online advertising game.
Social media advertising has come a long way in a relatively short period of time. When Facebook launched its first advertising option in May 2005, no one could have predicted that social media advertising revenue would be estimated to reach $8.4 billion in 2015, just ten years later.
Online advertising is a natural choice for modern businesses, but after the decline of the banner ad, businesses began searching for alternatives. Paid search is a great online advertising medium for driving visitors to your website based on user intent (i.e. their search query). But what if there are no identifiable (or affordable) keywords you can bid on to drive traffic? And what about those businesses that want to create brand awareness rather than capturing user intent?
Social media advertising helps businesses find new potential clients by using users’ own shared information to identify interest. Rather than reactively targeting users who search a certain term, social media advertising proactively targets relevant users before they even begin their search.
Social networks are a good option for advertisers because of the advanced targeting options, reliable conversion tracking, and prevalence on mobile devices.
Advanced Targeting Options
Because social networks gather such a larger amount of user information, social media advertising is able to target your audience in a wider variety of ways than other online platforms. Stretching beyond general demographic and geographic data, social media advertising has opened the door to deeper interest, behavioral and connection-based targeting methods.
These advanced targeting options increase your ad’s relevance to your users and provide a level of personalization that is not achievable on other advertising channels. Here are four such advanced targeting options:
- Interest targeting: Reach specific audiences by looking at their self-reported interests, activities, skills, pages/users they have engaged with, etc. Interest targeting is often related to keyword targeting, so some platforms will allow you to enter both. Interests can be as general as an industry (e.g. automotive industry) or as specific as a product (e.g. convertibles). Offered by: Facebook, Twitter, LinkedIn (under “Skill”), Pinterest.
- Behavioral/Connection targeting: With behavioral targeting, you can reach people based on purchase behaviors or intents and/or device usage. With connection targeting, you can reach people who have a specific kind of connection to your page, app, group, or event. Both types of targeting take past behavior into account to help you determine intent. Offered by: Facebook, Twitter, LinkedIn.
- Custom targeting: Reach audiences by uploading a list of email addresses, phone numbers, users IDs, or usernames. Facebook calls its custom targeting Custom Audiences, while Twitter calls its own Tailored Audiences. They’re largely based on the same concept: if you have a known group of people you’d like to target, you can simply upload them and target them directly (provided that the social network can match the data you’re uploading with real profiles). Offered by: Facebook, Twitter.
- Lookalike targeting: Reach new people who are similar to an audience you care about. Lookalike targeting helps businesses extend their custom audiences to reach new, similar users. For those businesses looking to acquire new customers through social media advertising, lookalike targeting can be a fantastic acquisition tool. Offered by: Facebook, LinkedIn.
Improved Conversion Tracking
With all the new options for targeting users, tracking the performance of your social media advertising campaign is even more important for justifying your spend and requesting a budget. While you can still pay-per-click to your website or choose other metrics to measure the success of your ad, most social networks now offer website conversion tracking.
Social media ads that drive the user to take some measurable action, like buying your product or registering for an event, can actually report on how effective the ad was in driving those conversions — as long as you configure it properly. Conversion tracking requires that you add a snippet of code to the page on your website where the conversion will take place, so it does require a bit of technical ability and extra effort, but you’ll then be able to attribute any conversions on that page to the ads you’re running.
Conversion tracking helps your business be smarter about your ad spend and strategy. If your ad is receiving a lot of clicks (which you are paying for) but no conversions, it’s a wasted investment. This information will allow you to better optimize your ad copy and targeting.
With total activity on smartphones and tablets accounting for 60% of digital media time spent in the U.S., there’s no denying that reaching users while on mobile devices is the next big wave in advertising — and social media advertising is the best native option. Mobile users are already checking Facebook, Twitter, LinkedIn and/or Pinterest multiple times a day, so advertising to them while they’re within those apps is the best way to reach them without being disruptive.
The data back this up: mobile advertising was on course to comprise 68% of Facebook’s revenue and 84% of Twitter’s in 2014, and two-thirds of social media advertising spend is forecasted to go towards mobile ads in 2018, creating a $9.1 billion market on mobile. This, coupled with the fact that over half of mobile phone users globally will have smartphones in 2018, means that social media advertising on mobile is a huge growth market in the next three years.
When deciding which channels to use to grow your business in 2015 and beyond, try social media advertising as a supplement to your existing growth strategies.