Social Media as Free Advertising
$72 Billion. That is the amount of money spent on digital advertisements in 2016. Annually, companies spend around $70,000 of their budgets on internet-based advertising. Why? Internet advertising allows for targeted campaigns (only show ads to people who would be interested in them), it is often cheaper than its counterparts in the print and television world (pay-per-click, per-impression, etc.), and more and more people are turning to the internet for their shopping needs.
This has led to a surge in internet-based marketing and advertising efforts, with Forbes noting that in 2016, digital advertising revenue surpassed television for the first time. The majority of this ad revenue comes from mobile users, according to a recent report from the Internet Advertising Bureau. This is clearly a large industry, and for good reason, but what if brands could shave a significant amount of money off of their advertising costs by using social media as a free advertising platform? What if, instead of spending $70,000 on digital advertising, businesses invested in social media teams capable of producing relevant content for social media users? This would not only reduce costs, but it would also increase the effectiveness of the advertising efforts.
Before we can convince brands to shift their advertising resources, we must first see where traditional digital advertising fails. A study from market research firm, Kantar Millward Brown, found that “Gen Z”(those born between 1996–2010) were not fond of digital ads. Only 26% expressed preference for digital advertising over other possible options (i.e. cinema ads, billboards, etc.) An analysis of this study discussed the possibility that people feel close to their smartphones, and that they “consider them a personal device that is an extension of themselves, they don’t want this space cluttered with ads.”
This is not an isolated finding, with a Gallup report from June 2016 reporting similar results. that among millennials, the level of digital customer service had a significant impact on their perception of the brand and the venue.
So, how do we solve these brand and platform perception issues? The answer is not more paid advertising, rather it is for businesses to move towards conversational social media usage as a venue for their marketing/advertising needs. Instead of creating ads and then posting those ads online, business owners should treat their social media accounts as advertisements themselves. If people feel that they are looking at an advertisement, they are more likely to ignore it. Conversely, if they feel they are looking at a personality, they are more likely to continue looking at it and even interact with it.
Businesses should strive to make customers feel that they are a part of a larger community. This costs nothing except time and effort. Showcasing exceptional employees and the unique personalities of a brand help to build a sense of intimacy, an emotional connection that more traditional advertising strategies simply cannot provide (not for a reasonable return on investment, anyway).
So, instead of going full force with tens of thousands of dollars towards online paid advertising, brands should explore the possibility that they might be better served by investing time into their (likely already existing) social media accounts. The cost-reward ratio might astound them.