Ad Anatomy of Social Media Giants
July 26th, 2012 by Chris Campaner
If you’re in advertising and marketing, it’s time to focus on the anatomy of ad revenue models for the giants like Facebook and Twitter. You can’t ignore the number of people who have assimilated social networking into their routines. Connect with people where they spend their time. The goal is to participate in the activities that your customers are now very familiar with and truly come to know the platforms they use daily. Understanding all the tactics available can birth creative ways to go about engaging and inspiring your brand’s following. So who is truly #winning in this space?
Users Worldwide
Facebook 900 000 000 +
Twitter 500 000 000+
Advertising Options
a) Premium Ads/Sponsored Stories
b) Logged Out Ads
c) Reach Generator/Promoted Posts
d) Offers
e) Mobile News Feed (NEW)
Some of these are fairly new, with much talk surrounding the “Offers” that brands can now easily push toward fans. These create a tether between the digital and physical, which drives more store traffic, provides a way for consumers to find value in liking a page, and undeniably caters to the mobile-savvy community. (More on Ad Options)
a) Promoted Accounts
b) Promoted Tweets
c) Promoted Trends
d) Hashtag Pages (NEW)
Recently launched, “Hashtag Pages” are built for events, as opposed to brands exclusively. They are an aggregation of public voices surrounding an event (such as a sports match, awards show, season finale, political debate etc.), which can be leveraged by companies to garner impressions and engagement. Check out the #NASCAR page to see for yourself.
Advertising Costs
Facebook operates using a self-serve ad platform where you can place a bid for a specific target group. Facebook operates on a CPC (cost per click) or CPM (cost per thousand) basis, allowing for flexibility when trying to drive engagement or impressions respectively. The ability to set a daily budget limit – or “cap” – exists as well.
Twitter still runs its ad model with internal sales reps, but has announced plans to roll out a self-serve platform – similar to Facebook’s – later this year. This social network sells most of its services using a CPE* (cost per engagement) and CPF (cost per follow) model. You can tailor your budget to align very easily with your needs using this system.
*Cost per engagement includes replies, favourites, retweets or clicks.
Effectiveness
What is the ROI for these social platforms? The single most compelling question marketers have been wrestling with for some time now.
Reports from Spring 2012 indicate that Twitter advertisers are earning more Money Per Impression than Facebook players. But why? Well, it’s seemingly to do with Twitter’s different approach to integrating advertising messages right into its main features. The news feed that people tune-in to now hosts Promoted Tweets, which can easily be recognized as such. Twitter has been testing the market carefully so as to not upset their loyal users with ads spamming the digital landscape. Their newly bolstered “Promoted” tools allow advertisers to better reach their audiences, with limitations in place so that user experiences are never over-flooded with paid-for content.
Facebook’s methods are very straightforward and lead to sales impacts if the creative is compelling (here are some tips). The sponsored stories have traditionally been categorized and separated from a person’s news feed to keep transparency and user awareness a priority. A user must LIKE a page in order to have that content displayed within their stream of news and updates. Impressions insurance can be bought through the “Promoted Post” option, which ensures that more of a page’s fans will see that content.
Facebook is taking steps in the right direction, starting with attention to mobile. They are integrating ads into the news feed and optimizing the function for smartphones, which is necessary in a market that is seeing continued mobile growth. Facebook still accounts for 1 of every 7 minutes spent online globally, which is the stat that’s hard to ignore. And with just under a billion users, Facebook sits atop the social media mountain. For now.
Written by: Chris Campaner