Can paid media pay off on Facebook?
Facebook has quickly become a pillar of many companies' social media marketing strategies. With more than 800 million users registered with the social network, it's a no-brainer to create an account for a small business on the social site, especially given that membership is free.
In order for Facebook to turn a profit, however, it needs to sell paid advertisements to companies. Several major brands have expressed disinterest in using paid options, citing poor return on investment. However, marketing gurus have also suggested these companies may not know how to properly leverage Facebook's paid options, which is hindering the success of their campaigns.
Paid versus earned
Facebook has traditionally been used as an earned media platform, meaning brands tap the social site as a way to get free publicity and promotional attention. By conducting customer service and using their profiles to drive followers to homepages, email marketing newsletter sign-up pages and other online platforms, a number of companies have been able to achieve tremendous success with Facebook.
As an earned media platform, Facebook has always generated results. Citing research from Reuters and Ipsos, eMarketer notes that approximately 20 percent of Americans have purchased products or services from a company after seeing comments or other brand-related content on Facebook. Among the Millennial generation (consumers currently between the ages of 18 and 34) this number is even greater at 28 percent.
A separate study conducted by comScore and Facebook further highlighted this fact, noting a 0.7 percent lift in purchase intent after a consumer saw brand-related content on the social site.
Entrepreneurs may see this and ask themselves, "If I can get these results without spending a dime on Facebook, why would I invest in paid advertising?" Indeed, this is a question that many companies have debated.
According to the Facebook/comScore study, leveraging Facebook's paid media offerings is key to maximizing results. One retailer noted that exposure from Premium ads (those placed on exclusive Facebook spots) caused a 16 percent lift for in-store purchases and a 56 percent increase in online purchases. To put it in layman’s terms, Facebook is asserting that while earned media is good, paid media is even better.
"As Facebook puts more emphasis on ad formats that include social data, such as whether a user's friend 'liked' or commented on the brand, the company will need to put out additional research showing the value of these types of ads," said eMarketer principal analyst Debra Aho Williamson.
Small businesses and paid advertising
For many small businesses, balancing budget with ROI is a very important consideration. When even big brands such as General Motors cast doubt on Facebook's paid services, it's understandably concerning to small businesses that have a fraction of the marketing budget.
The key is to remember that different businesses serve different markets. Just because it doesn't work for one company doesn't mean it won't pan out for another. Part of any successful marketing effort is the willingness to experiment, so entrepreneurs should be up to try anything once – you never know when it could help you uncover a new niche for your company.
"Social media has a variety of uses," explains Erika Kerekes, social media product manager at Deluxe. "Small business owners should consider fully investigating their options on any given marketing platform, regardless of whether it's Facebook, Twitter or any other social media site."This entry was posted in Beginner, Social Media. Bookmark the permalink.