By Anil Malhotra, CMO and founder of Bango
There are currently 3.78 billion social media users worldwide, who spend an average of two hours and 25 minutes per day scrolling endlessly through their favourite platforms – from Facebook to Twitter to LinkedIn to Weibo and QQ. It’s this widespread use of social media that makes it a haven for digital marketers, coercing them to spend staggering amounts of money on social media advertising each year to promote their products or services.
But while targeting campaigns at people based on their age, job, gender, search terms and interests sounds impressive on paper, it’s very difficult to tie these factors into whether people will actually spend their money. The sad truth is that social targeting data provides a loose indication of purchase behavior – not a direct link – so the impact on the bottom line is limited.
As a result, the board is very quickly becoming disillusioned with social media marketing and its attraction appears to be wearing off. Bango’s “Board to Death” research surveying 200 CEOs echoes this. The survey reveals 60% believe that the marketing potential of social media has been exaggerated, and only 34% seeing social media marketing as a key source of new customers or sales for their business.
That’s perhaps why 52% of CEOs wouldn’t endorse future spending on Facebook ads, 66% wouldn’t endorse future spending on Twitter ads, and a massive 77% wouldn’t endorse future spending on LinkedIn ads.
As pressure builds for digital marketers to prove that their activity is driving real, meaningful, results, many are turning away from social media advertising as a core promotional tactic. But they shouldn’t give up. The reality is that social media advertising is a good idea — it’s just been poorly executed.
Why is social media advertising failing to deliver?
A lot of paid social media marketing is based on behavioral and demographic profiling. The social media providers who offer this type of segmentation use data sourced from the platform itself or third-party providers, such as websites or other apps, to inform their targeting. But there are two massive pitfalls to this.
First, using demographic profiling means that marketers risk grouping their prospective customers into categories that are irrelevant to them. Secondly, what people search for — and even what they like — on social media is a weak indicator of what they will spend money on.
For example, companies selling pregnancy or maternity-related products have been criticised in the past for targeting adverts towards women aged 18-45, as they assume that they are at the ‘right’ age to have a baby. In a very general sense this is the core audience, however it casts the net too wide, and the products fail to be relevant to a huge proportion of that audience. People that buy pregnancy and maternity products is a much harder indicator. Remarkably, some of those people are men.
Digital marketers need to focus on using data that shows real intent to pay, particularly as 77% of CEOs say that they would increase their marketing departments’ budgets if the activities could be more directly targeted towards those who buy.
The answer lies in Purchase Behavior Targeting.
Target based on purchase behaviors
Purchase behavior targeting is an emerging online advertising trend that allows marketers to target campaigns directly at the people who are most likely to buy.
Instead of relying on demographic data — or even targeting people based on what they like, browse, search or share — purchase behavior targeting looks at purchase data to identify patterns of buying behavior.
While platforms like Facebook can offer you their first-party payment data to aid with purchase behavior targeting, an even wider set of purchase data can be applied to online marketing campaigns by combining Facebook’s own user data with purchase data derived from reliable third-party sources.
The first online marketplace has emerged that provides purchase targeting data derived from the analysis of payment activity across billions of pounds of ecommerce activity. This ensures much more meaningful targeting, better linking social media and digital marketing activities to the business outcomes that truly matter – conversions and direct sales.
As Purchase Behavior Targeting continues to grow, digital marketers can expect to get better value for money from their social media ad campaigns and deliver positive returns on their marketing investment – much to the delight of the CEO and board. Meanwhile, social media users will receive better targeted offers and ads, not just based on what they like, but on what they actually want to spend their money on. Let’s face it, there’s no need to dig into people’s personal characteristics. The best proof of relevance is propensity to buy.