Will Your Online Advertising Dollars Be The Ones Wasted This Year?

January 29, 2020
January 29, 2020 Kate Neale

Will Your Online Advertising Dollars Be The Ones Wasted This Year?

Sales is a numbers game and that is surely the motivation for the mainstream social platforms to encourage their use as a mainstay of any commercial marketing strategy. Don’t get me wrong, digital marketing absolutely deserves its position as a premier marketing channel, but there is a dark side to the big user statistics and glorious promise of results that’s not immediately obvious in the hyperbole of social media discussion, especially for those new to the task of marketing.

The fact is digital is a medium, not a strategy in and of itself and the dark side is the fact that as every business follows suit into the established digital marketing methodologies, the effectiveness of the medium and its most established practices can be compromised by saturation. I expect those that come up with the great content, the new and innovative ways of using the medium will benefit, but the inexperienced, those who follow, lets call them ‘the also-rans’, risk putting their time, effort and money in the wrong direction.

So how is it you might waste your money?

  • You fail to properly research your target market and the best mediums to reach them
  • You base your marketing strategy on ‘I have to be online because everyone is doing it’ rather than a strategy based on your target consumer’s behaviour, needs and wants
  • You buy social media advertising on the wrong social media platform for your audience
  • You spend marketing budget on social media advertising executions that have had their day
  • You don’t use the correct social media platform in the most effective way
  • You copy what others are doing on social platforms when it’s not right for your audience
  • You buy ads on social media platforms or paid search that don’t correlate with the behaviour of your target customer

Digital Marketing Is Popular And Growing, But At Whose Expense?

Global social media ad spend is predicted to grow 20% in 2019 to reach US$84 billion and according to the data, social media will account for 13% of total global ad spend, ranked 3rd behind TV and paid search (Zenith Oct 2019). That 20% would represent US$16.8 billion. 

And here’s one example of an anomaly: It’s estimated 75.3% of US businesses will use Instagram in 2020, yet only 11% of users buy from this platform.

Zenith expect the bulk of that US$16.8 billion to come from SME’s using paid search and social platforms for their targeting and localisation capabilities, automated tools like Ad Manager Dashboard said to drive business objectives and the ability to pair data directly to their website and online consumer behaviour.

However the emerging trend appears to be larger companies are spending their budgets elsewhere. Early in 2019, Facebook COO Sheryl Sandberg said Facebook’s top 100 advertisers accounted for less than 20% of the company’s ad revenue”, siting a more diverse customer base than the previous year. By October 10 2019, Facebook estimated over 140 million businesses were using Facebook, Instagram, Messenger and WhatsApp each month to find customers, hire people and engage with people.

Of 140 million businesses, the top 100 advertisers by ad spend only account for 20% of their revenue! This would suggest the businesses with the big budgets are using their budgets on other platforms, other online content initiatives or in other marketing channels entirely – perhaps even the real world! The observation does however support Zenith’s theory that the surge in social media ad spend is a direct result of ad investment by SME’s. That’s all good if they all know what they’re doing.

But Zenith sees growth slowing as the medium matures and predicts social ad spend growth to level-out over the coming years, decreasing to 17% in 2020 and 13% in 2021. These statistics are crucial for advertisers to evaluate because there is plenty of evidence to suggest that consumer behaviour is not pairing with the dominant digital marketing ethos.

What’s Really Driving The Growth In Paid Social Media And Search?

There are a lot of commercial forces driving the notion that digital is the Holy Grail of marketing, not the least of which are the social media platforms themselves promoting their use, the digital agencies providing services and software developers creating apps to make management easier.

Certainly the usage numbers support a story of growth in use of the established social media platforms, but watch out as you read those headlines – researching for this article repeatedly offered up data that was between two and five years old and still being quoted as current! So be comfortable the stats quoted here are as current as I could find ie. Predominantly from the last 12 months.

However if we look at how the digital medium is constantly changing and the data about what people are doing online, it tells us the increase in paid social and search is contradictory to the trends in user behaviour.

As you formulate the tactical execution of your marketing strategy, consider these salient points:

  • eMarketer predicts 75.3% of businesses will use Instagram in 2020, however only 11% of US social media users shop on Instagram
  • Only one third of the most viewed Stories are from businesses which could reflect the proliferation of Influencers not categoriesed as businesses (although they clearly are commercial)
  • Search engines drive 300% more traffic to content sites than social media (Ironpaper 2015). Search engines are 10 times more effective than social media at driving traffic to shopping sites (SearchEngineLand 2016). Social media marketing has its place in 2020, but SEO is the most effective way to drive high-converting traffic. The most recent search engine statistics highlight the importance of having a search engine optimisation strategy in place. That means adding proper page titles, descriptions, H-tags, meta descriptions, backlinks, optimising for site speed, and conducting thorough keyword research.

Paid search advertising will grow at 8% p/annum to reach US$107 billion by the end of 2019, then US$123bn in 2021, when it will account for 18% of total ad spend, but here’s the thing:

  • 90.88% of pages get zero traffic from Google search (Ahrefs 2018)
  • 80% of users ignore sponsored search results. (Search Engine Land) This shows the advantages of ranking organically instead of paying Google to pin your page to the top of search results. Not only do most users ignore sponsored search results; they’re also more likely to distrust the brand that’s advertising itself.
  • 51% of content consumption comes from organic search. That means more than half of all content on the web is accessed through an organic search.
  • 92% of traffic goes to the results on the first page of Google. More than nine out of 10 users will select a result from the first page of Google. If you’re on page two or three of Google, your chances of being found are extremely low.
  • 70-80% of search engine users are only focusing on the organic results. (MarTech, 2018)
  • 75% of users will not scroll past the first page on Google (Hubspot). Page one rankings are attractive to users because they’re viewed as being more trustworthy and likely to have the most relevant content result. Three-quarters of searchers don’t go beyond page one when searching.

What Do You Need To Know TO Maximise The Value Of Your Digital Strategy?

When analysing data, a balanced perspective and clear objective is essential. If I’m evaluating any medium as a strategic tactical tool, I want to evaluate in terms of my target audience behaviour and the medium’s relevance to them. On Instagram alone there are 95 million posts a day, so you want to be sure you’re in the right place with the right content to capture some of the average 28 minutes your target audience spends on Instagram each day…

When it comes to deciding how to spend your marketing budget, if you’ve decided after diligent consideration that online is the place for you to be, you’ll want to consider whether you spend your money on paid ads on a social platform, paid search ads eg. Google, paid ads on a programmatic marketing platform, paying an Influencer and/or becoming an influencer in your own right, or investing in SEO (Search Engine Optimisation) .

Evaluate each of the social media platforms in terms of user profile, how it’s being used by businesses AND then how people use it, to evaluate if it’s a good fit for your business.

Influencer Mikaela Testa has 50,000 followers

For instance Instagram is the platform of choice for many Influencers because the visually oriented medium is currently largely used by people for aspirational or voyeuristic purposes – both drive eyeballs. If we view Influencers as ‘individuals’ rather than businesses and we recognise that only one third of Stories are from businesses (Instagram), we can begin to gain some insight into who is using this medium and what for – currently.

In Australia Instagram’s dominant audience is females 25-34 yrs, and men and women use the platform in different ways, but savvy marketers will begin to use the medium as Influencers do, to build followers on a relationship of value. By all means have a digital tactical approach, but don’t get caught up in the hyperbole of the medium. You need to know how your audience behaves online in relation to your product, how and where to capture their attention.

Influencer Jessika Power has 215,000 followers

For Example: As at December 2019 of the 9,440,000 users make Instagram the third most popular social media platform in Australia (Napoleoncat.com). The users are 57.3% female (52% in the US) and while 75.2% are aged 18-44 yrs, the largest group are women aged 25-34 yrs (3,100,000).

If we explore a correlation between these demographics and the nature of the platform,  there will be a cue to how and what you communicate to them. We can get an insight into what these women are using the platform for, what they’re looking for and why. I suspect chief among their motivations and they’re looking for products, inspiration, demonstration and benchmarks for family, lifestyle, health and beauty.

Influencer Tammy Hebrow has 10 million followers

As with YouTube, how to videos are in the top category of most watched content on Instagram, but the content is largely aspirational and voyeuristic – viewers want to look like, be like, live like the people they see showcased in the posts. The fact remains that Influencers built their Instagram profiles on volumes of Likes and that’s difficult for ‘advertisements’ to compete with (which is part of the reason Instagram removed the Like button…), so while tens of millions of businesses have profiles, only a few million buy ads.

It’s difficult to get Likes on your ad and it’s hard to compete with what are essentially unrestricted ‘personal’ posts of all kinds…

A quick heads-up on Influencers:  In Australia an Influencer with 3,000-20,000 followers could ask between $75-400 per post, while those with 100,000-250,000 can ask around $550-800, so you can expect to pay thousands if they have over 500,000 followers. However you will need to check the authenticity of these numbers (you can check out my other posts on Influencers for more information on this.)

  • Subject to the age and stage of your business and your commercial objectives, consider whether your marketing effort and resources are better spent in optimising your website’s organic SEO appeal to direct people already searching for your product category.

Where Is The Smart Money Going? This post is not a tutorial on how to formulate a digital campaign strategy, it purely seeks to address how statistics can be misinterpreted and to encourage more diligence when deciding how to deploy a marketing budget.

The innovators understand digital is a medium that lends itself to constant reinvention in terms of how your audience finds, interacts and ‘relates’ to you. The smart media manipulators are not ‘also rans’ – they’re learning about their target people and instigating ways to use any or all mediums to relate to them. I’m seeing a definite upsurge in authenticity, empathy and emotional connection as surging trends. Whatever they do, it’s driven by a detailed and an innate knowledge of the target people, and that knowledge drives the creative ideas behind their use of any medium.

If you would like to identify the right way to approach digital marketing in your marketing strategy, contact Wanted Consulting – Reward Offered.

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