Trends: Social Media Advertising

The reasons why social is set pay dividends

While social networks amass huge audiences and are the most dynamic sector in digital advertising, they tend not to bring in revenues to match. Luckily for brands, that’s beginning to change—and we have the four reasons why.

More metrics. For advertisers wondering whether their efforts are paying off, new social analytics services seem to be launching every week. Facebook, for instance, recently unveiled a new measurement tool called Insights, which has stats like “Friends of Fans.” The social networking company also says advertisers will soon be able to aim their messages at users even more carefully using data from Facebook’s integration with media services like Spotify and Hulu.

Content is advertising is content. Facebook and Twitter have both emphasized turning regular user content into ads—Facebook through its Sponsored Stories unit and Twitter through its Sponsored Tweets. But that doesn’t mean the death of traditional advertising copy. In fact, Facebook has a new ad unit that blends a friend’s activity (e.g., “Anthony likes Movie X”) with a message from the advertiser.

Social blindness less blind. The bad news: Some, like Altimeter Group principal analyst Brian Solis, believe “blindness or deafness” to brand messages is going to increase on social networks as they’re flooded with promotional content. But there’s good news, too: Some companies are working on ways to fight the clutter. Facebook, for instance, announced that it’s starting to organize user newsfeeds based on an algorithm that it calls Graph Rank—so brand activity that’s actually generating user interest won’t get buried.

It’s not just about Facebook. Yes, Facebook claims the majority of social ad spending, but other services are starting to make progress, too. For example, an advertiser survey conducted by The Pivot Conference found that 16 percent of respondents had run campaigns with Foursquare, and another 26 percent planned to do so in the next year. And eMarketer is projecting that LinkedIn’s ad revenue will grow from $79 million last year to $250 million in 2013.

Recommended articles