Why social media
is such a challenge
It significantly changes the rules of advertising
By Diego Vasquez
Jul 7, 2010
Social media has been growing very quickly over recent years, to the point where everybody and their grandfather seems to have a Facebook account. But advertising growth on social media has not kept pace with the growth in users. Marketers have been stymied in large part because social marketing plays by a whole new set of rules that are often changing day by day or hour after hour. That is one of the major challenges to growth in this area, according to a new study from Borrell Associates, the Williamsburg, Va.-based research firm. Borrell estimates that marketers spent some $4 billion last year on social media sites, evenly divided between national and local companies and including spending on advertising, promotions and public relations. This year Borrell figures spending will jump 68 percent, to $7.5 billion, with 11 cents of every online dollar going to social media. By 2015, Borrell figures marketers will spend some $38 billion on social media. By that time, Borrell predicts, social media will account for 29 cents of every national marketing dollar and 44 cents of every locally targeted marketing dollar. Still, there is lots to figure out about social media. Kip Cassino, vice president of research at Borrell Associates, talks to Media Life about the boundaries between advertising, promotions and public relations, what's fueling social media spending, and why social networking is not a fad.
What did you find most surprising or most interesting about this report?
The growing overlap between advertising, promotions and public relations. We expect these shifting boundaries to become even more uncertain in the future.
Why is social networking a fad that is not going away?
If social networking were a fad, it would quickly be replaced by "the next new thing."
It is not. Instead, it achieves the single purpose the internet was originally designed to fulfill: a platform for people to talk to one another.
Why have marketers been relatively slow to jump onto social network advertising?
Most of us have been trained to use a mass-marketing point of view. Social media reverses that knowledge. It's not about the number of people you reach any more. It's about how your message resonates with those you reach, and how many of those pass it on to others.
What factors will be the three biggest drivers of social network spending and why?
One: the development of metrics and measurement tools that allow marketers to see the value of their social network efforts. Two: the increased adoption of social network marketing by local businesses. Three: the development of increasingly sophisticated segmentation tools.
What are the major measurement issues facing social network advertisers?
Lack of knowledge is the biggest obstacle. The idea that 50 separate campaigns, each with its own specific segmentation, are more efficient than a single effort with one segmentation is not necessarily intuitive.
How and why are social network marketing rules different than traditional mass marketing?
The difference lies in the way each medium links to its audience. Newspapers, TV, and other "legacy" media -- as well as run-of-site online display -- all let many see the same message.
Social media -- if it is used properly -- can present messages specific to a single contact, or a small group of them.
How is targeting users on, for example, Facebook easier for marketers than with other mass media? Why is it still somewhat imperfect?
Facebook is not mass media. If anything, it is the reverse of it. Targeting is easier if marketers take advantage of its unique strengths: the ability to send specific messages to concentrated groups of very interested individuals.
How will mobile usage impact social network marketing over the coming years?
According to comScore, social networking is currently the fastest-growing activity among mobile device users--up more than 200 percent since last year.
Nothing grows forever, but these increases point to the continuing movement of online access away from static computers toward mobile devices.
The social networking arena changes so quickly. Do you think it will ever be possible to have "expertise" in this marketing arena?
Expertise may become a matter of weeks or months of exposure, not years or decades as in the past.
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