Social Media Advertising Squabble: Helpful or Hindering?

                                                Jason Howie,  Instagram and other Social Media Apps  , September 1, 2012 via Flickr, Creative Commons Attribution

                                               Jason Howie, Instagram and other Social Media Apps , September 1, 2012 via Flickr, Creative Commons Attribution

InQuery Podcast with Grace Smith

Topic: The effectiveness of ad remarketing with social media opposed to more traditional methods

[Podcast Introduction]

Grace Smith: Hello everyone, my name is Grace Smith and I’d like to take this time to talk about and explore something that I’m sure we’ve all come across at one point or another in this social media heavy world that we are all so accustomed to now. First, with a little back story. I’d been doing homework non-stop all day that day. Staring at the computer screen. Eyes dry, brain focused, no time to blink let alone sit down for a meal. A few long hours later and I was finally done my work for the week. To celebrate, I wanted to treat myself to as much junk that I could stomach. It started off with one tab, probably domino’s pizza. Which led to another tab, KFC maybe, and another tab, and another tab… and soon I had a browser filled with almost a dozen different food choices.

Grace Smith: This is probably as bad as it gets when it comes to me and problem solving. So, when my mom called me and asked if I wanted her to bring home some pizza like 20 minutes later, I felt like that choice was destined to be.

Grace Smith: So, I closed all my tabs, and went on with my day. Mindlessly browsing through Facebook and Twitter, when some advertisements on the side caught my eye. I can’t really recall which company it was, but I know it was at least pizza related. There was pizza, fries, all of that good stuff. At first I just thought it was just a coincidence, but the next day I spent a good few hours researching about a gaming system that I was planning on buying, and after refreshing my Facebook feed I saw an ad that corresponded to the same system I was looking at earlier. It turned into a sort of game after that, I’d open up a bunch of tabs and search for certain items, close the tabs, and wait to see how long it’d take for the items to show up on the side of my Facebook page. But it wasn’t until recently when I started to wonder why this happened.

Grace Smith: After a bit of research, I found out the basics. AdRoll, a company that works with Facebook helps to pair off advertisements to people who’ve searched for the product or something similar. It’s pretty straightforward on their website. “Someone visits your site, but then they leave without completing your desired action. While browsing Facebook, they see and engaged with the retargeted ads, and (if all goes well) they click on the ad and return to your site to complete the desired action.” Sounds simple enough, right? But was it really that easy? I could think of many reasons why this 3 step process won’t work hitch free every time. So, I decided to find out for myself. Do retargeted ads help companies more than they hinder them? Let’s find out.

Grace Smith: Let’s look at a survey produced by AdRoll themselves for a minute, one of the most popular and successful ad retargeting companies out there. They work with over 20 thousand brands to basically force consumers back to websites they’ve visited and similar products. According to a World Advertising Research Center article done in San Francisco, almost 75% of US marketers spend up to half of their digital ad budgets on just retargeting in 2014. It seems almost crazy to possibly spend that much money in one place.

Grace Smith: But, according to a poll ordered by AdRoll, consisting of a thousand of those US marketers, it works. Just about 9 out of 10 of the respondents stood by the statement that retargeting preformed equal to or better than the search, email, and other digital display campaign’s done prior for multiple reasons. The brand awareness seems to be a big one, along with social engagement, customer control, and driving sales. And don’t expect retargeting to mobile to perform any less. After analyzing clients’ campaign data, AdRoll found that there were more impressions, more clicks, and more conversions when they added mobile to their retargeting regime.

Grace Smith: Should we just take these numbers and put our full trust in them then? Of course not. So, I decided to provide my own personal research to put towards the big question.

Grace Smith: After surveying 20 of my friends and peers, I got some very interesting results. Most of them backing up the claims and the survey I just mentioned. Most of the advertisements that my friends have come across came from social networking sites like Facebook, Twitter, and YouTube. The three biggest social media websites out there. And guess what? They are all partnered with AdRoll. Shocking.

Grace Smith: 70% of the participants have come across an ad that corresponded to something that they had searched for prior, such as hotels, audio production gear, clothing and jewelry brands, and more. While the people who actually purchased or were interested enough to actually interact with the ad and the people who don’t bother was split right down the middle; fifty percent have, and 50 percent have not. 60% of the participants also prefer using their smartphones over their desktops and laptops when it comes to browsing on social media. Why? Probably because of the accessibility of it.

Grace Smith: This all seems to add up quite nicely: retargeted ads on social media are easy to produce, while earning a lot of impressions so that equals a lot of money. To get these ads across to more people, these retargeting companies needed to get with the times and move onto mobile retargeting which they have. But has this broad attempt of reaching people actually deterred some potential buyers in the long run? Quite possibly.

Grace Smith: 65% of the participants I surveyed have admitted to installing Ad blocking software to their devices. These programs such as AdBlock Plus and AdBlock for Google Chrome are programs that even I am guilty of using.

Grace Smith: A World Advertising Research Center paper constructed in Dublin, Ireland refers to Ad blocking software as a “viral phenomenon” causing the amount of revenues lost to double every year. “The number of ad block users worldwide has increased 41% in the past 12 months” according to PageFair. Mentioned in this paper, Dr Johnny Ryan, the head of ecosystem for PageFair explained to Business Insider just how insane the amount of users are installing these programs and sees it as “a viral phenomenon that will continue”.

Grace Smith: According to this article, the websites that are directed to a more youthful audience do much worse, which is evident in the survey that I devised considering the sample I used was teenagers from ages 17-19. The older the person is, the less likely they will be to have something like AdBlock installed which is completely understandable. But as time progresses, doesn’t that mean that the amount of AdBlock users will skyrocket? Globally, over 21 billion dollars will have been lost by the end of 2015. Rising to over 41 billion dollars in 2016. What will the future for companies like Retargetter and AdRoll look like a year from now? What about 10? So many questions, so little time.

Grace Smith: Well, we might be unsure of the future for the ad retargeting world, but let’s take a look at something we know all too well and probably are starting to forget about. The television. We’ve seemed to all move on to bigger and better things such as Netflix and Shomi but even I find myself forgetting that the TV exists. For a very long time, the TV was the go-to place for all of your favourite ads that you could repeat by heart along with all of the ads you found most annoying. It didn’t matter how you felt about them, because you just knew by that first frame what product was apparently much more important than finding out if spongebob was going to make it to the Krusty Krab on time that day. Brent Gleeson, a Forbes contributor that manages leadership and marketing for entrepreneurs gives us some insight in this article to just how big TV advertising was opposed to digital marketing back in 2011 and 2012.

Grace Smith: The potential TV audience to reach in the first quarter of 2012 was over 283 million, while those browsing the internet during this quarter was a promising but a significantly less 211 million people. The average usage in a day watching TV in the first quarter of 2012 was 5 hours and 16 minutes, while the average amount for browsing the web was just one hour a day. How insane does that sound? Just one hour of internet for a whole day. I don’t even think that that’s half of the average movie durationp on Netflix. The obstacle of Ad blocking software is also mentioned here as well, with 176 million downloads of Ad Block Plus on Firefox and over 5 million users worldwide on Chrome back in 2012 (which we see now has grown way beyond that).

Grace Smith: Social Control, an agency that uses social influence to connect consumers to their favourite brands is a full-service social media agency that gives brand marketers the entitlement to create their own change. In their article, “Television or Social Media Ads? That is the Question” they also go over the potential audience reach and comparing the costs that television has in contrast to social media. Social Control argues that several brands have had a great spike in sales because of these TV campaigns, but some publications state otherwise claiming that the majority of TV advertisements generate a negative ROI. “This is not the case with social media campaigns,” they say, “ad dollars here can definitely be stretched to the last penny.” And what I found most intriguing in this article is the following sentence: “Depending on the type of goals you set for your social media ads, the budget will only be used for the interactions working towards your goal. “The example given takes Facebook into consideration, saying that if you set the Facebook ads to strictly use your fixed budget if the users have a particular interaction after coming in contact with your post, or if they click a link, and so on. Something impossible to do with TV campaigns. So what’s the winner here? Can there even be just one?

Grace Smith: Well, when it comes to winners, right now AdRoll definitely is one. The reason I am focusing on AdRoll so much is because of the following they have and the ridiculous amount of money they make from what they do for social media. A FORTUNE article by Dan Primack delves into AdRoll and their incredible growth, tripling their revenue run rate in just a little over a year. But, as mentioned before, they still have some major loopholes to attempt to close because of the increased internet awareness that comes with such a tech-savvy aging generation.

Are you considering using an Ad Retargetting platform to get your product across? Then, you may find Derek Singleton’s “5 Lessons Learned in Site Retargetting” helpful. Here he goes through the top 5 things you should probably know before jumping into one of these methods. Number one, choosing a platform with the correct amount of control you need. Here Dereck comments on what he liked and what he felt limited by with each program. For example, a program like Google AdWorks Remarketing was good for its more selective audience grabbing techniques by giving you the options to control which audience you wish to target, where the ad might show up on the page, and excluding the websites you’d rather your advertisement not appear on. The limitations to this platform though, is that you may only access Google’s DoubleClick ad network. Derek notes that although this is the largest ad network out there, it’s possible that you may miss out on other opportunities to bid on ad placement for websites that aren’t a part of the DoubleClick network, like Facebook. That’s a huge one.

Why does Facebook compatibility seem to be such a deal breaker for these kind of things? Let’s look at the facts.

Over 1.4 Billion people use Facebook to connect with and share what they care about, while 900 million of those users check Facebook every single day. Facebook Staff assures us that When you run a Facebook advert, the audience being able to see them is determined by location, age, interests, and more. With Facebook Adverts, we (meaning the ones trying to sell the product/brand/etc.) choose the kind of people we want to reach and Facebook delivers the advertisements to them. This is said to make the advertisements more relevant for the people who see them, so way better results.

Facebook seems to have jumped onto the mobile device ship at full force. More than 700 million people visit Facebook every day on their phones and tablets, and Facebook makes sure that they see the advertisements along with their typical stories from family and friends. “Because Facebook adverts are placed in the stream of information people view on Facebook, they’re more likely to see your advertisements and take action.”

Facebook promises “Real business results” when you partner up with them. Saying that advertising on Facebook is easy for you and your customers” The advertisement brings you straight to the shop, to the download page for an app, to view your videos, and allows you to add an item to online shopping baskets and more. It all sounds too good to be true and too easy to be true, but the results from it discussed earlier really stand for themselves.

Grace Smith: In closing, can we conclude that a retargeting platform such as AdRoll is effective? Yes. All of the numbers are there, and for the most part everything adds up. Is it effective enough for a long foreseeable future? That, I don’t know how to answer. I don’t even think that AdRoll themselves knows that. As long as there are advertisements popping up left and right there will always be new people looking to download an ad blocking software, and there will always be new devices coming out that companies like AdRoll will have to keep up with to implement their sneaky advertisements into, but Adam Berke, Co-founder and president of AdRoll seems to recognize these hurdles and identifies them as “Challenges that the company is beginning to solve.” I guess only time will tell.

Grace Smith: Once again, my name is Grace Smith and this has been my podcast episode for InQuery.

Grace Smith: Thank you so much for listening.


 Music (In order) Little Idea, The Elevator Bossanova, Badass, & Slowmotion from:

DrumRoll.aif by HolyGhostParty on (Posted 04/15/2009)

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