Social has become an integral part of audience interaction, isn’t it time for brands to get control?
Are legacy platforms still an effective sales funnel?
Social revolutionised how brands interact with audiences, gaining traction based on the combination of mass audience adoption, unlimited (free) organic reach for brands and revenue-sharing for content creators able to reach >85% of target audiences. No surprise social acted as a catalyst for a new generation of social businesses.
Social changed in 2015 when Facebook’s audience growth plateaued, and to maintain growth reduced (free) organic reach by 52% in 2016, whilst raising ad costs by 171% in 2017. The lack of formalised content revenue agreements has become a perennial issue for even the largest content creators, and dependent on organic reach, it’s estimated that less than 5% of publishers’ digital revenue now originate from social platforms. Despite serial well-documented controversies, it’s clear from Facebook’s Q1 2018 results that brands remain willing to absorb increasing social marketing costs.
Social is a strategy not a monopoly
While legacy social platforms revolutionised the brand-audience relationship, audiences continue to migrate between different platforms and adopt new ones. Brands have the opportunity to establish their own social structure and go direct to consumers (DTC) whilst continuing to use legacy platforms.
Unlike legacy platforms, DTC requires a switch in focus from volume and traffic to a targeted approach of based on profitability and raising ARPU, creating RoI measured through increased conversions.
An uneven partnership: diversifying channels
Digital media may have been hardest hit by margin pressure on CPMs, but brands too have absorbed spiralling marketing costs been required to respond to shifting algorithms reflecting the needs of platforms and not brands, who face an increasing challenge to optimise social business models.
Over the past 24 months instant articles, then video, now meaningful connections have become the key point of emphasis for generating reach and revenue, making it challenging to strategise even medium-term approaches.
Brands best positioned are those efficiently coordinating diversified channels. The Economist, ft.com, and MailOnline have strong online brands using DTC to constantly expand their use of digital channels.
How to embrace generation social
Brands continue to use legacy social because, despite increasing costs, it has been effective in creating awareness and referral traffic. However shifting business models provide the impetus for brands to evaluate new opportunities to combine legacy social with a new generation of live social business models, enabling them to reclaim control, revenues, and data, to crucially improve conversions.
Own the conversation
Successful online brands will become social entities too, with the agility to operate diversified social business models on demand, fundamentally revaluing the commercial proposition for partners.
Based upon control, revenues and data, social brands can progressively reacquire audiences back from legacy platforms, implement live social business models on demand that may include paid content and services, their own ad inventory, the sale of anonymised data, and sCommerce on demand, alongside legacy social.
Anonymous traffic is no longer enough
Owning conversations and understanding live audiences behaviour enables brands to align content, interaction, and business models, creating resonance where consumers engage, maximising conversions.
Understanding audiences using AI and predictive analytics transforms conversions. The Wall Street Journal are actively using audience data to maintain a dynamic paywall, ranking readers on a likelihood to subscribe model.
Digital media has the opportunity to mitigate CPM pressure by revaluing partner relationships offering providing a window into live audiences enabling programmatic behavioural and contextual targeting.
Fashion retail with up to 78% of traffic arising from generation (mobile) social has conversions as key — increasing costs of simply driving traffic anonymous traffic will not sustain growth, and if conversions are to improve then brands must own conversations, and understand audiences.
If social is an integral part of audience interaction, then shifting social business models, should act as an impetus for brands to get control.
Brands have the opportunity to integrate themselves more efficiently into the social ecosystem, and monetise social audiences for themselves. Legacy social will continue to be available for awareness and promotional campaigns, but the key for brands is to combine these mass audience benefits with new opportunities for audience ownership, monetisation and understanding.
GLOBALDRUM is a mobile social platform enabling brands to monetise audiences. The Company works with brands who become social entities in their own right, returning control, revenues, and data, enabling a new generation of live social business models on demand synchronised with social networks.