With the idea of earned media in the rearview mirror, social media networks are focusing on optimizing their commercial value to advertisers and brands and driving social commerce.
Led by Facebook and Google, social media are working hard to segment, target, package and continuously monetize their users. With gross ad revenues of $80 billion for Google and $36 billion, there are many sets of eyes on the prize.
Social engagement opens up an array of new opportunities for brands to improve sell-through, loyalty and maximize social commerce revenue. In a 2016 survey by Internet Retailer, social media placed second, behind email, in terms of expected ROI with an average cost-per-order of $16 according to Forrester Research. This implies that social networks are more cost efficient than behavioral targeting, retargeting, mobile display ads and paid search engine marketing.
Social commerce is in its infancy. Facebook garners the lion’s share of online business, though consumers turn to the full range of social outlets for product and service recommendations. With order values ranging from $66.75 on Polyvore to $37.63 on Reddit, much turns on the price and value of goods and services offered.
Here are 6 prime tactics defining this shift in strategy.
Video First. Recorded and live streaming video is becoming the preferred creative medium on social networks and across the Internet. The appeal and value of Facebook Live, or Twitter’s Periscope has yet to be fully explored. Achieving significant visibility is still a hit-or-miss proposition. Links to cultural, sports and music events will be obvious starting points. But formulas for bringing people into live branded experiences are likely to emerge as more and more brands experiment with going live.
Mobile First. The majority of social network traffic is on mobile devices. This gives social networks the potential to identify key inflection points, track customers through time and space, and interact meaningfully with offline experiences. Theoretically a competitive advantage, the key to leveraging mobility, is understanding behavior patterns, frequency of access, as much as 60 times per day according to some studies, and developing sophisticated and automated targeting methods.
Content is a gating factor. Consumers have seen their fill of cat and unboxing videos. Graphic expectations are high. Breaking through requires something striking and different. YouTube stars and celebrities with huge Twitter followers will be enrolled as presenters and influencers. But capturing serious attention from large audiences will not be easy.
Given the torrent of social content and its attendant baseline level of grumbling about commercial intrusion, snackability, easy to grasp bits of illustrated information, will be the deciding factor. Messages with attention-gabbing graphics, punchy headlines, and limited copy will be necessary to stop someone from scrolling long enough to claim a few seconds to stop, look, and click.
Intensified Personalization. Matching documented audiences and developing prospect audiences based on brand criteria are new tactics, high on the social networks agenda. Led by Facebook, social platforms can now import and match a CRM database and/or a list of customers and prospects and then deliver advertising directly to the news feeds of those people.
In addition to a standing set of hundreds of custom audiences, social networks are willing and able (for a premium price) to create distinct unique audiences based on psycho-demographic and/or behavioral specifications from brands. Ideally, this reduces waste and zeroes in on those with the highest likelihood to respond to the message. Beyond delivering the branded message, this approach adds to the consumer perception of social media as personally relevant, useful, and valuable.
Using Big Data. Propensity and behavioral modeling, on the order of Facebook Signals, will drive the content and the frequency of messages each individual receives. Social networks are actively using artificial intelligence and machine leaning to fine-tune audiences for advertisers. Social networks are able to track and aggregate which sites a person visits, which retailers a person favors, which apps are active and which content they see, click, or download. These are inputs into models that predict the likelihood of response and conversion which defines a new level of dynamic ad serving.
New Units. A number of networks are developing display and mobile units geared to featuring specific products and prices. Aimed at taking retail share from Amazon and Google, these efforts will enable retailers to zero in on high demand or high-margin items, spotlight sale items, and improve targeting for new product introductions. By leveraging mostly mobile audiences, social networks are seeking to modify consumer behavior by improving the impact and the mechanics of mobile advertising by making real time on-the-go commerce easier.
The next phase of social network development is monetization of large and niche audiences, competition with Amazon and Google for ad dollars and the quest to find the right balance between organic and commercial messages designed to retain and delight consumers while driving more commerce. Look for networks to compete with and compliment each other as they roll out new formats, units, planning tools, and pricing.
Danny Flamberg, EVP Managing Director of Digital Strategy and CRM at Publicis based in New York, has been building brands and building businesses for more than 30 years.Prior to joining Publicis, he led a successful global consulting group called Booster Rocket, as Managing Partner. Before becoming a consultant, he was Vice President of Global Marketing at SAP, SVP and Managing Director at Digitas in New York and Europe and President of Relationship Marketing at Amiratti Puris Lintas and Lowe Worldwide.