Why Brands Should Overhaul Their Social Media Strategies

By Eric Covino, president and founder of Creative Signals

Was I the only one who wasn’t shocked when GM pulled its $10 million ad budget with Facebook last year?

Despite all the hype, social advertising is not yet the golden goose for direct response, and it may never be. The attractiveness of large amounts of eyeballs at cheap prices is not enough to overcome the psychological aspects of why people interact on social media.

While social networks are diversifying their ad offerings (as Twitter did late last month when it started testing out advertising cards for lead generation), brands should first understand what makes those ads inherently appealing.

Consider these statistics from a recent Nielsen report:

• The three biggest reasons why users interact on social media are to connect with new friends, connect with people they already know and keep up with what’s happening with their social media “friends.”
• Advertisers continue to be turned off by the lack of universal metrics available to track the effectiveness of these ads.
• Advertisers and agencies see “brand lift” as the most appropriate metric versus actual ROI.
• A third of users found social media ads more annoying than traditional online ads.

There is a significant difference in ad tolerance by ethnicity:

• Asian-Americans: 41 percent reported as most likely to “like” a social media ad. Another 31 percent reported to have bought an item after seeing a social media ad.
• Hispanics: 22 percent made purchases after seeing a social ad; 21 percent shared ads after seeing them.
• African-Americans: 29 percent were said to “like” ads after viewing them; 18 percent made purchases after seeing an item socially.
• Caucasians: 13 percent shared ads, while another 12 percent made a purchase after seeing an ad on their social network.

The three pillars of success
Companies that can mash together the three pillars of a search campaign (SEO, pay-per-click and social media) effectively and profitably are ahead of the game. Social networks are trying to capitalize on the increasing interest in their ad offerings, and allowing lead generation from a Twitter stream is attractive at first glance and fairly inexpensive (similar to Facebook ads). That said, brands should keep the following thoughts in mind:

• Social might not work for a particular business in a profitable way; you must make a business case for it.
• Ads on social sites are much cheaper than SEO campaigns and PPC campaigns for a reason (ad blindness and general ad apathy).
• Given the recent swing in Google’s search results and PPC pricing (see below) businesses might have a tendency to rush into a social ad campaign based on the pure cost of “traditional” online marketing efforts.

Google is moving at lightning speed
Google has made more major updates to its algorithm in the past two years than it has in the previous decade. This can introduce some uncertainty in the market especially for sites that weren’t playing “by the rules.”

Google saw close to a double-digit growth in average CPC and is currently showing double-digit increases in January 2013 vs. January 2012 for both desktops and tablets (which combined control about 90 percent of the ad click shares).

When you combine the scenarios mentioned above, social starts to look attractive, and it certainly can be. But each brand needs to make a business case for it. Budget permitting, this strategy is certainly worth experimenting with as it will be a home run for some companies but not for others.

The attractiveness of offers like these sometimes rest on the sheer size of the audience, the uncertainty of traditional SEO campaigns based on an ever-changing and elusive algorithm, and increasing CPC costs.

Make sure it measures up
Tracking is the key, especially for small businesses. It’s generally built into a brand’s budget to spend X on “branding,” but small businesses have to take a more scalpel-like approach.

Online advertising opportunities will continue to become more fragmented as the consumer base moves into a post-PC era. Advertising on social channels will likely morph into aggressive mobile ad plays and in-app advertising will continue to grow as the world moves to an environment where stationary desktop PCs and laptops give share away to hybrid mobile devices.

However, the enthusiasm on the direct-response side should be tempered because of the differences in effectiveness of interruption marketing (inserting ads into social streams) versus permission marketing (traditional search), specifically in the case of small to midsize businesses that may not have huge “brand” ad budgets to pull from or the resources needed for the management of social campaigns.

Eric Covino is president and founder of