Social Media Advertising: No Direct Response Proposition

This article by Hollis originally appeared in ClickZ on September 11, 2007.

Social media makes headlines almost daily now. With so much buzz, it’s no wonder advertisers feel compelled to jump on the bandwagon. Many concerns surrounding social media advertising that I wrote about a year ago still abound, but advertisers now also ask about ROI. It’s almost as though now that social media advertising has been around a while, quantifiable ROI expectations should be met.

The reality is social media advertising shouldn’t be viewed as a direct-response initiative.

What’s Working

Successful social media ad campaigns are by no means traditional, which means standard display or contextual ads should be avoided unless they’re devised to be entertaining. Try, for example, online video ads.

But for real success, research points to campaigns that focus on building relationships rather than driving immediate actions. Forrester reports about 30 percent of social networking site users befriended made a brand profile to become eligible for exclusive offers, events or sales or because another friend recommended it (the cool factor). Forrester has dubbed this type of marketing “friendonomics,” but to some degree the success of befriending the brand is predicated on prior brand awareness.

Although befriending a brand profile may seem more naturally appealing to younger users, according to Forrester, Gen Y users “show the greatest interest, with 37 percent saying they would be interested in seeing marketer profiles on social networking sites. Gen X isn’t far behind, with 31 percent showing interest.” To capitalize on this interest, unexpected companies have created profiles like Ernst & Young’s presence on Facebook, primarily to recruit new employees.

Some suggest the most successful form of advertising on Facebook is developing a custom Facebook application. If you use Facebook, you can certainly see the abundance of new apps available each day, so there’s substance to this idea.

True advertiser acceptance comes, however, from letting the user shape the brand. Take for example, Second Life. Plenty has been written about it, and traditional advertising doesn’t even exist on it. Social media users respond less to advertisers who try to wholly control their ad message, and users certainly don’t take kindly to interruptive or what they view as deceptive advertising. Just read the reaction to Facebook’s new advertising model in which nondescript ads are served to users in their news feeds, based on what they reveal about themselves.

And how about shaping ad delivery altogether? Google has filed a patent for “user-distributed advertisements” (UDA) whereby the UDA system “facilitates insertion of manually selected ads into a document that is to be distributed (e.g., transmitted, published, and/or posted) such that the document is to be made available to other users.” This is Google’s way of monetizing viral.

Are Advertisers Ready for Social Media Advertising?

Based on my talking with many different types of companies doing online advertising, the answer is still, “it depends,” but those you’d expect to be the last to the table probably will be last. Old-school, less risk-taking or less aggressive marketers still have a lot of brand-control issues. Older upper management often doesn’t get social media, much like they didn’t initially get the Web. Heavily marketed brands or even smaller, atypical advertisers, on the other hand, have made progress and seem far more open to discussions about clever ways they can use social media to better build their brands.

Measuring Social Media Advertising

With social media, the advertiser must also accept less conversion-driven results, instead tracking interaction measurement standards, such as content contribution (the volume of comments/reviews/posts), content use/Web mentions (set up a Google Alert), social bookmarking/-sharing (del.icio.us,StumbleUpon, Digg), subscriptions (RSS feeds, e-mail), and engagement metrics (unique visitors, page views, time spent on site, depth and frequency of visits, etc.).

No Opportunity for Direct Response?

The problem with reconciling direct response (DR) advertising and social media is that to most advertisers, it’s all about a mathematical equation. If the numbers don’t work, they see the campaign as a failure. This mentality just doesn’t jibe with how social media ad campaigns succeed. Social media is about nurturing. In fact, the process is really more marketing than advertising, period. So unless the DR marketer is comfortable with the “D” standing for “delayed,” channel your ad dollars elsewhere.

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