Facebook achieved a 46% growth in advertising revenue for the first three months of 2021. If you are a marketer who advertises via Facebook or indeed any other social media platform. Similarly, you might be asking yourself why you’ve not seen the returns you’d like.
During Econsultancy Live last month, Michael Duke, chief product officer at Good Growth, set out to explain why social advertising presents a challenge to growth for many brands. His argument is that marketers struggle to understand a fundamental aspect of customer engagement within social.
Social media is underperforming, despite growth
We all know that social media is growing exponentially, explains Duke. “Facebook is knocking on the door of 50 million [users in the UK], TikTok has grown from essentially nothing to 13 million [UK] users in a matter of a couple of years, so more and more organisations are thinking, well, ‘how do we make social work for us?’”
Facebook’s reporting shows that it has grown its global advertising revenue to approximately $25 billion in the first three months of 2021, which is “an enormous amount of growth in social media, paid social media, marketing essentially,” says Duke. In the UK, specifically, social media advertising revenue as a whole is forecasted to reach nearly $12 billion by 2025 – which means it’s almost tripled in size in the space of eight years (according to the same forecast).
A case of the ‘Red Queen’
The most obvious challenge here is the return-on-ad-spend (ROAS) metric. Duke uses Facebook as an example, which typically uses either a 28-day view or a 7-day click attribution model. “It doesn’t really matter which one you use; the objective of the model is to assign as many conversions as possible to your ad spend,” he explains.
“So you have this challenge, the data is not wrong – there’s a difference between data being biased and being wrong – but it’s not trying to help you make the best decisions.”
“Ultimately, what’s the actual result of this?” he asks. “You’re spending more money, and not just that but you’re spending more time. You require teams to run this advertising, data reporting, but – despite that – you’re not moving forward.”
A more nuanced understanding of the customer
So, how do organisations get past this challenge? Duke says that it’s not actually a case of improving performance, but about asking and answering the right questions.
“When you look at social,” says Duke, “the vast majority canadian phone number database don’t say they fail, they simply say ‘I’m not ready to buy’. ‘Oh I’m just browsing today, I’m waiting until I get paid, I’m just looking online to buy later.’ And that’s not failure.” Ultimately, he says, “that value then is really in driving awareness, driving engagement, driving familiarity. So solely focusing on these commercial metrics for the social channel, it misses the point, it deflates the value of the channel, it deflates interest and investment. Ultimately it harms growth, but by that same token, simply increasing investment in social and reporting standard metrics won’t demonstrate growth.”
Four ways to respond to the challenge
Responding to this issue is not easy, of course. Duke says that “it requires a fundamental shift in thinking away from just ‘what’s the return on investment of social’ – as we found, it’s really difficult to define that because of the challenges associated with the nature of the user who reaches us through this channel.”
Duke explained four actionable points:
1. De-prioritise your commercial metrics
“Yes, by all means report them – you really do want a return on ad spend, for example, of social media marketing above 100% – at least that means you’re not actively losing your investment. But for your consideration channels and no, that’s not just social – that’s organic search as well, for example – there are other metrics by which you can assess their success, not just the commercial ones.”
2. Define quality engagement
Secondly, he highlights the importance of defining quality engagement. “…if there’s no relationship between the metric and what you’re trying to achieve, it doesn’t tell the story,” he says.”
3. Think about the entire conversion path
This leads us in to the third step which is, as much as possible, to think about the entire conversion path. “If social media is always that first touch in the user’s conversion path, it’s commercially critical. How do you take that and then factor that into your reporting?”
Finally, and perhaps the most interestingly, Duke suggests remodelling based on different attribution types.