Study: Social Media May Be Free, But Marketers Have to Pay to Get Optimal Results

Many marketers adore social media because it’s viewed as a mostly free channel for driving engagement and sales. But a recent study from Kenshoo Social, conducted by Forrester, has findings that make a strong case to see social media more as a paid channel.

Social tactics: free vs. paid
According to the study, which is titled “The Key to Successful Social Advertising: How to Choose the Right Tactics to Achieve Your Social Advertising Objectives,” 87 percent of the 105 large social advertisers surveyed say they use social networks for their marketing efforts, followed by 67 percent who use microblogs and 51 percent who use business-focused social networks. Just 6 percent say they don’t use any of the three social media channels listed above.

When Kenshoo Social delved deeper into how the surveyed advertisers use social media platforms, it found that 73 percent say they create branded pages on social networks and post messages on them. Meanwhile, 56 percent say they buy ads on social networks, while 52 percent say they create branded accounts on social networks and post messages to them, and 51 percent say they pay to promote content on social networks.

The study also pinpointed 69 respondents who say they’re satisfied with their paid social media advertising to see what tactics they use. The tactic that was most used by these satisfied paying social advertisers is paying to promote content on social networks, followed by creating branded applications on social networks, creating branded tabs on social networks and paying to promote trends on microblogs.

The least used tactic among this set of paying advertisers is creating branded microblog accounts and posting messages to them, followed by creating branded groups on business-focused social networks.

Keys to success
When asked, “Which of the following practices do you use when buying ads or paying to promote content on social media properties?” 60 percent of respondents say they rotate through multiple creative (e.g., images, copy); while 35 percent say they target many small, specific audiences; and 35 percent say they use A/B testing to determine the best targeting or creative for ads.

Meanwhile, when it comes to targeting when buying ads or paying to promote content on the three social media channels (social networks, microblogs, business-focused social networks), 50 percent say they use demographic targeting on social networks, 43 percent say they use geographic targeting on social networks, 41 percent say they use targeting based on users’ interest on social networks, 38 percent say they target their fans on social networks, and 37 percent say they target based on user actions on social networks.

Kenshoo Social laments the fact that though social channels offer robust targeting features, the majority of social advertisers are stuck using the most elementary form of targeting of them all: demographics.

The power of paid social tactics
The main thrust of the study from Kenshoo Social and Forrester is that paid social tactics demand more attention and implementation. However, there are different strokes for different folks.

Take, for instance, what 69 social media/advertising professionals who say they are satisfied with paid social media advertising say is the primary objective of promoted content on social media channels. According to this segment of respondents, creating awareness is the top objective, followed by driving new social fans or followers, driving purchases, creating word-of-mouth, and increasing the loyalty of existing customers.

For social ads, the top objective is driving purchases, followed by driving new social fans or followers, and increasing the loyalty of current customers.

Four takeaways
The study imparts four key recommendations:

1) “Start with clear marketing objectives: Marketers must define their most important priorities and objectives before they choose social advertising tactics and then focus on the tactics that will help them reach their objectives. For brand-focused marketers whose primary goal is to drive awareness, promoted content is the easiest way to create success. For response-focused marketers whose primary goal is to drive purchases, paid advertisements represent the surest way to meet your objectives.

2) “Promote your brand and your content. Many marketers still think of social media as a free channel. But the data is clear: Marketers who used paid social tactics – be it paying for social advertising or paying to promote social content – say that they’re more successful than those who don’t. The lesson? Social marketing can be free – but if you want it to deliver results, it shouldn’t be free.

3) “Take advantage of robust targeting. One of the greatest benefits of advertising on social networks is that marketers can set very specific targeting criteria – reaching users based on their interests, activities, friends, and more. This type of granular social targeting enables brands to increase the ROI of their advertising efforts on social networks.

4) “Develop a holistic approach for greater success. Successful marketing programs accomplish a range of marketing objectives – for instance, creating brand impact to drive discovery, offering deep product information to convert prospects, and building relationships with existing customers after the point of purchase. While different paid and organic social advertising tactics play different roles, smart marketers will consider how all of their social opportunities fit into the customer journey and into their broader marketing initiatives – and then take a holistic approach to managing and measuring those programs.”

With so much competition from friends, brands and other users in the update streams on social media properties, it makes sense that paid promotions will become increasingly necessary for advertisers to ensure that their messages are discernible.

According to BIA/Kelsey, social ad revenues in the U.S. are set to hit $6.1 billion this year. By 2017, this figure is expected to climb to $11.0 billion.

A separate piece of research from Nielsen’s Vizu found that 89 percent of advertisers used free social media tools, while 75 percent used paid social media (e.g., paid ads, sponsored blog content). However, 64 percent of advertisers said they expected to boost their paid social media budgets this year.