The Bursting Social Media Advertising Bubble 254
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."
Re:Are customer able to evaulate that objectively? (Score:5, Informative)
Which is why advertising is a poison to society and must be destroyed. The set of advertising that is tolerable: (i.e. makes you think "That is an excellent point and I should reconsider my purchasing") is so heavily outpaced by the kind that's hellbent on being emotionally and psychologically manipulative to get you to do things against your own interest that it would be entirely acceptable collateral damage in my opinion.
People don't understand branding. (Score:5, Informative)
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.
Re:Are customer able to evaulate that objectively? (Score:5, Informative)
Good point. I remember the '60's, and the radio jingles. I was just a kid then, but some of the jingles would stick in my head. Talked to someone who knew about such things, and he told me that even if it pissed me off, the advertisers thought it was a "GOOD THING" when those jingles stuck.
Now, today, I don't see advertising. I know that advertising doesn't influence me. I just don't see it.
When I need or want something, I get online, and start researching. I find a hundred products that claim to do what I need, so I narrow it down some. Compare some specs, and decide which of the specs really feel right to me. Is precision more important, or durability? Do I need tensile strength, abrasion resistance, or what do I need? Find some products with the specs I can live with. Finally, look at the prices. HOLY SHITE!! Reject the highest priced 25% right off the bat. Compare the specs again. Hell, those cheap things barely squeak in to the acceptability picture. I'm usually left with a half dozen or less products to choose from - at this point it's a matter of deciding whether to take the high or low end of the price spectrum.
Research pays off. When I finally get my stuff, it actually works for whatever I need. And, I usually got it for about 60% of whatever my workmates found their substandard items for.
Re:Are customer able to evaulate that objectively? (Score:3, Informative)
Are the customers able to recognize whether they got influenced?
Why not? If their buying patterns remain unchanged regardless of what ads they see, then probably.
Problem is, most people will say this when we know it isn't true. We know as a documented fact that advertising do work as influence, even when (perhaps best when) you don't know it as a consumer/buyer.
Case in point: Most Apple-buyers will credit the quality, design and "just works" aspect of Apple products as reason for their choice, but Apple has and continue to invest an insane amount of marketing dollars in establishing exactly this perception. And, a significant amount of the Apple marketing dollars are actually targeted at customers that just bought the product, eg. they already won them, but by continuing to influence their feeling of having made the right choice, the users become more happy with their choice and more likely to recommend to others and buy again.
Re:What do you think "secular" means? (Score:5, Informative)
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.
Re:"Secular decline" (Score:4, Informative)
"Secular decline" is sometimes used to describe a long-term trend of overall decline. http://en.wikipedia.org/wiki/M... [wikipedia.org]
Re:Tuning it out? (Score:5, Informative)