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."
Tuning it out? (Score:5, Insightful)
I'll say we're tuning it out. With AdBlock we don't even receive it.
Are customer able to evaulate that objectively? (Score:5, Insightful)
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 (Score:5, Insightful)
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.
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Two things every bubble has in common... (Score:5, Insightful)
1. It's always different this time.
2. It's not different this time.
Why "Sadly"? (Score:5, Insightful)
Re:Tuning it out? (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
The article actually made two points (Score:5, Insightful)
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.
people don't know themselves very well (Score:5, Insightful)
"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.
Ad overload (Score:5, Insightful)
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.
George Carlin said it best... (Score:5, Insightful)
What's the Influence of Crappy Polling? (Score:5, Insightful)
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.
Re:Are customer able to evaulate that objectively? (Score:5, Insightful)
You selected your soap, toothpaste, laundry detergent when you were a teen or younger (you just use your parents band).
The fact that you are no longer 'in play' doesn't mean you are brand immune.
Re:Tuning it out? (Score:5, Insightful)
If you want to force people into it, then put your content behind a paywall. Then you will find out what it is really worth. If you leave it open on a public facing server, you are implicitly offering it. The internet is not cable tv. You don't get to dictate what happens to your content inside computers that do not belong to you.
Re:Tuning it out? (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.