Rise of the Social Geeks: the Evolution of Social Media Marketing

It’s funny to think about now, but there was a time not long ago when people were seriously wondering whether it was worth it to spend money advertising on social media.

If you’ll recall, General Motors decided to stop running ads on Facebook in 2012, saying it would instead create content for its brand pages without paying for promotion. A few months later, Mashable echoed this sentiment when it published a popular post entitled, Let’s Face it: Most Social Media Marketing Is a Waste of Time.

Back in those days, neither General Motors nor Mashable were far from the mainstream in their thinking. If you were a social media marketer in 2012, you likely spent nearly all of your resources creating content—maybe it was a funny image or a coupon offer—that your fans would want to share with their friends. If you were lucky, some of those friends might have even “liked” your brand themselves, allowing you to show them your content in the future.

Today, things are incredibly different. In fact, you could say that social marketing has evolved into something else entirely.

No More Free Lunches

In the years since GM briefly backed away from paid promotion, Facebook has throttled brands’ ability to share for free—and odds are that networks like Snapchat, Pinterest, and Instagram will follow its lead sooner rather than later. If you post something on Facebook now, you can expect that a few as two percent of the people who have liked your page will actually see it in their News Feeds. In essence, you have to spend money on media just to reach the fan base you have spent years persuading to “like” you.

As a result, social marketing is no longer about simply creating content people will enjoy. Rather, it is now just as important to be highly sophisticated about optimizing your media spend. To break through in this highly competitive environment, in addition to the great content and messaging (that are eternally important) you need to have three things:

  • Phenomenal audience segmentation
  • World-class targeting
  • A deep, data-based understanding of how much your customers are worth to you

Determining Value

Let’s start with measuring the value of your customers. In the old days, it was fine to chase fans indiscriminately because it didn’t cost you anything to reach them. But now that you need to pay to get your brand in front of new people at any sort of scale, it’s crucial to determine how much your company benefits with the addition of each new fan.

Though “likes” are not as valuable as they once were, they can still save you money over time because Facebook allows you to pay less to reach fans than non-fans. A big question, then, becomes “What is it worth to me to add a new fan?”

The answer is that it depends on the person, based on their likely lifetime value, or LTV, to your company.

Measuring Marketing ROI through Lifetime Value - Ben Legg / 02-26

Three Letters Lead to Success: C-R-M

Answering the LTV question starts with building a great CRM database that allows you to track your customer interactions. By doing this, you give yourself the knowledge of whether you are about to add a fan who is a frequent customer and a brilliant brand advocate, or whether you’re about to overpay to acquire someone who bought your product once and never returned.

If you’re able to collect email addresses in your database, you can also use Facebook audience targeting to customize the perfect message for a group of people who, for instance, have all bought a Jeep that is now three to five years old. With more and more brands flocking to social media in pursuit of its massive audiences, the only way to break through at scale is to use these tactics to achieve the highest possible return on investment.

Measuring Success

Measuring Social Media Marketing SuccessGranted, measuring social media ROI is not always easy, as evidenced by the many marketers who say they are unable to do it at all.

The trick here is to refrain from trying to link your social marketing efforts directly to sales. People generally use Facebook, Twitter, and Instagram when they’re bored and not actively shopping. Therefore, getting them to pull out their credit cards and make an instant purchase should seldom be the goal.

Instead, you should try focusing on getting people into your marketing funnel by offering them something free in exchange for their email addresses. Or you can use install ads to drive people to a free app, while ensuring that your cost-per-install is lower than the user’s predicted lifetime value. In both cases, a successful campaign is not defined by the number of direct purchases made, but by the number of qualified people you are able to pull closer to your brand.

Content Versus Promotion

The final challenge for social marketers in this new environment is figuring out how much of their budgets to devote to creating content, and how much to spend promoting it. One marketer I know found out the hard way how important this is when the large retail brand he works for spent 70% of its budget creating content and just 30% on media.

For all of the time, energy, and money that went into making the best content possible, the result of that brand’s relatively small media investment was this: a staggering 90% of the content was never seen by anyone on Facebook. Needless to say, you’ll want to try something different.

Personally, I recommend a split that devotes something like 20% of resources to creating content and 80% to distribution (i.e., media spend). This way, if you have $1 million, you can spend $200,000 to create three or four high-quality videos that people will love, and then you can use the rest of your money to make sure that everybody gets to see them.

While this resource allocation might be difficult to swallow for marketers who prefer the creative work of making content to the rigorous data collection and testing required to master campaign optimization, there is no denying that the social marketing game is fundamentally different from what it was just three years ago.

As is frequently the case when it comes to evolution, marketers have no choice now but to adapt or face the consequences. And make sure you have some data geeks on your team…

About the Author

Ben Legg

Ben Legg is the Group CEO of Adknowledge. He has served at executive levels at Coca-Cola, was COO of Google Europe and spent a decade as an officer in the British Army. Ben is a civil engineer, and takes great pleasure in nurturing the ROI-obsessed culture which permeates Adknowledge. In 2016, Ben wrote a book entitled Marketing for CEOs: Death or Glory in the Digital Age that focuses on helping C-suite executives understand the changing landscape of marketing. Ben is based in New York City.

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