Advertising on Social Networks Ineffective
New research into the effectiveness of different advertising mediums has revealed that advertising on social networks has had very little impact on consumers so far.
The survey of 1,000 UK adults was conducted by direct marketing company Response One. It examined the relative effectiveness of different advertising media in driving consumers to visit a company’s website and ’seriously consider making a purchase’.
Advertising on social networking sites ranked marginally above unsolicited email and unsolicited text messages when it came to encouraging customers to visit a particular site. Speaking to NMK, Amanda Ling, data intelligence director of Response One, advised marketers to evaluate their goals before using social networking sites as an advertising channel.
"Marketers need to have a more precise idea of what social network advertising has to offer before they commit serious budget to it. Marketers need to realise the risks of overly intrusive marketing messages if they are to succeed in communicating positive brand messages," said Ling.
"On the positive side, there is an audience who are obviously very keen on social networking and as a result are very responsive to advertising on these sites - namely the 18-24 age group. This obviously represents the vast bulk of social networking users and frankly, in the short-term, there is easy method for social networking sites to change to appeal to older age groups. The real question is whether, in the medium to long-term, people will continue their social networking activity as they grow up," she commented.
Advertising on more traditional forms of media such as TV and newspaper came second and third respectively. This was followed by sponsored search links. According to Ling, the research shows how businesses should be taking a holistic approach when it comes to pushing brand messages.
"The dominant position occupied by traditional advertising media - above-the-line and direct mail - is the result of two main phenomena. First, legislation such as the EU Directive on Privacy and Electronic Communications has outlawed unsolicited emailing to prospective customers. This immediately limits the ‘reach’ of direct email to opt-in only lists, which only cover a smaller proportion of the population. Of course there are private opt-in email lists of enquirers or other kinds of not-quite-yet customers gathered through company websites. These are particularly powerful for driving web visits and purchases, but need to operate in conjunction with a company’s other advertising. But the reach of TV advertising and direct mail is virtually universal. It is also non-intrusive, unlike unsolicited email marketing - so they perform better.
"This study punctures the received wisdom that online advertising is the best means of driving web visits and purchases. Marketers still need to be using a mixture of direct mail and above-the-line advertising, as well as ensuring that they are communicating in a relevant and compelling fashion with their existing customers over the email and through existing lines of communication such as bills and statements," she continued.
The report also found that an email to existing customers was the most effective advertising medium. The tactic was 52 per more likely than average to initiate a web visit and serious purchase consideration. When asked whether the survey actually revealed anything new (after all, emails to existing customers suggest that they had a strong interest in the first place), Ling said:
"The clear conclusion from this research appears to be that, when the consumer economy is viewed as a whole, marketers cannot afford to go all-electronic in their marketing. In fact, they cannot afford to go largely electronic at the moment. The web is showing itself performing very well as a rich response handling medium but, at least as far as attracting new customers is concerned, the main marketing spend needs to be in more traditional advertising media. In short, the transition to a new advertising media balance in the 21st Century is certainly happening, but it is happening much more gradually than people imagine. Just because spend is going into online does not mean it is always delivering the required results. The successful marketers of tomorrow will be those who find the right media combinations."
However, Duncan Parry, Director of Strategy at Steak Media questioned the validity of the findings and warned marketers not to read too much into it.
"Comparing two entirely different types of advertising, targeted differently and used in entirely different parts of the purchase process is both unprofessional and misleading. Of course email to existing customers has higher response rates than other forms of digital (or any channel of) advertising. These consumers have already engaged with the brand, spent money and had a positive experience - they will always respond at a higher rate as a result. This is basic CRM and nothing new," he commented.
"A fairer comparison would be between different channels targeting current customers, such as customer magazines, email, phone and direct marketing, or online advertising that is targeted only to people who have bought products on a website. This would provide a much more valid basis for research. For new customer acquisitions a combination of on and offline media has always been, and will continue to be, the best strategy to adopt - anybody who thinks digital is at its best in a silo with no offline activity is simply wrong.
"Social media, by its very nature, works best for younger target audiences - that is obvious. But, this research alone should not be used to justify never looking at these sites for other age groups - the targeting options some social media sites offer means that different age groups and demographics can be targeted successfully," explained Parry.