Companies’ Approach to Advertising on Social Media

Since the arrival of social media platforms, companies have tried to figure out how to best use them to get their messages to consumers, often with mixed results. Some brands have embraced the notion that social platforms like Twitter allow constant interaction, for better or worse, with their customers.

Others have turned away from some strains of social media, as General Motors did last spring when it stopped advertising on Facebook while raising questions about the return on its investment. The move had a ripple effect in the advertising world, with many brands questioning whether the costs of being on social media were worth it.

A new report issued Tuesday by Nielsen and Vizu, a research company owned by Nielsen, shows that brands think they might be turning a corner, specifically when it comes to paying for their use of social media.The report examined the opinions about social media marketing among more than 500 digital media professionals — including brand marketers, media agencies and advertisers — from September to October 2012.

The study found that that

  • 89% of advertisers continued to use free social media products. Nielsen did not release the names of specific social media platforms mentioned by the respondents, but they are likely to include Facebook and Pinterest, as well as Twitter.
  • 75% of the companies surveyed said they were also spending more for social media content, which could include paying bloggers to write posts about a product or using third-party technology to push videos on to the Web in the hope that they become viral.
  • 70% of the advertisers surveyed said they dedicated up to 10 percent of their budget to paid social media advertising, while 13 percent dedicated more than 21 percent of their budget. Those numbers are expected to increase in 2013.

The results come as companies like Twitter and Facebook are making more diverse advertising options available to brands. Last year, Twitter announced a number of advertising and media initiatives, including a survey product that enables marketers to ask Twitter users a handful of multiple-choice questions. Facebook began testing a new advertising mechanism using a technology called real-time bidding, which allows advertisers to place bids on ad space at specific times.

“Advertisers are starting to look at social media as an integrated part of their advertising strategy,” said Jeff Smith, the senior vice president of product leadership for advertising effectiveness at Nielsen.

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Social Media Influencial in Food Decision

According to a new survey by eMarketer, social media influences purchasing decision when it comes to food:  36% bought a new brand after seeing a close friend’s recommendation, 30% after not so close friend recommended it, 20% after they saw products highly rated by users in their network and 17% after they read highly rated reviews from people they do not know

Leading Sources that Influence US Internet Users

In addition, the survey shows that when it comes to food, users are primarily sharing two thing: photos and recipes.

A May Blogher survey shows that recipes are one of the most sought-after pieces of food content online with 89% of internet users interested in food content going online for recipes.

Ina another survey, Allrecipes.com found that 65% of females who regularly used recipe sites bought branded ingredients called for in the recipes at least sometimes. 21% said they “usually” did this.

In yet another May survey, Compete found that food was by far the leading topic category for interactions on Pinterest leading to conversion.  25% overall had bought a product after discovering it on Pinterest, and surprisingly, considering Pinterest’s reputation as a female stronghold, 37% of male users were spurred to buy, compared to just 17% of female users.

US Female Bloggers* vs. Internet Users Who Go Online for Select Food-Related Content, May 2012

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Visual outperforms text when it comes to social media engagement

According to a new study from M Booth and  Simply Measured, visual content is not only taking over the digital and social media landscape, it’s also outperforming all other mediums when it comes to engagement!

  1. Videos are shared 12X more than links and text posts combined on Facebook
  2. Photos are liked 2X more than text posts on Facebook
  3. 48% of all Tumblr posts are photos.
  4. On YouTube, 100 million users are liking, sharing or commenting on videos every week.
  5. Pinterest refers more traffic than Twitter, StumbleUpon, LinkedIn, and Google+ combined
Graphics and videos drive engagement in social media

Reviews Are Key To Build Consumer Trust

Gaining consumer trust is an important issue for marketers seeking to ensure that they’re not scaring prospective customers away. In fact, a March to June survey of US adults conducted by About.com found that 84% of respondents felt that brands needed to prove themselves trustworthy before they would interact with them or other information sources. Moreover, the study found that there were 10 primary trust “elements,” or cues, that brands must establish in order to engender trust, including accuracy, expertise and transparency.

In a social media context, customers wanted to see that brands had a significant number of positive reviews, and that they didn’t go out of their way to hide the negative ones. The survey found that 41% of respondents said the ability to see reviews on social networks added to their feeling of trust in a brand. Reviews played a bigger role in cultivating trust than seeing that friends had “liked” or recommended a brand, or that the brand had accumulated a large tally of “likes.”

Video was found to improve trust the most when it served as a complement to other types of content. This ties back in to consumers’ hunger for useful information. Brands can build trust with potential customers by demonstrating expertise through quality owned content that is also devoid of a hard sales message.

Social Media Marketers Must Provide Disclosure

Advertisers who make claims about their products on social media sites like Twitter, Facebook and Pinterest need to be mindful of the fine print they use, or forget to use, in their postings and provide disclosure.

Last week, the National Advertising Division, an investigative unit of the Advertising Self-Regulatory Council, reviewed photographs that Nutrisystem had “pinned” on Pinterest boards and determined that the photos were testimonials requiring disclosures. The photographs in question showed people who said they had lost weight by using Nutrisystem, but there was no disclosure that the people had been paid or that the results of their weight loss were not typical. Instead, the photos simply said, for example, “Christine B. lost 46 lbs on Nutrisystem.”

The self-regulatory council conducts independent reviews of marketing and advertising on all platforms, including social media. The group often responds to complaints brought by competing marketers who accuse others of violating advertising guidelines, like making unsubstantiated claims. Following a review, marketers often comply with requests to modify or settle the claim. If they refuse, the claim can be sent to the Federal Trade Commission for further review.

Andrea Levine, the director of the National Advertising Division, said the organization tends to monitor advertising in categories like health and nutrition, dietary supplements and cosmetics closely. “Those are categories where companies are not watching each other as closely and bringing their own challenges,” Ms. Levine said.

In the Nutrisystem case, the company immediately agreed to add disclosure statements to its photographs, Ms. Levine said. “As long as their stories are truthful and as long as the advertiser discloses what is the normal weight loss range, which is 1 to 2 pounds a week, that lets the consumers put the success story in context,” Ms. Levine said.

Advertising on Twitter and Facebook is also monitored closely by the investigative units in the Advertising Self-Regulatory Council. In November 2011, for example, 1-800 Contacts challenged claims made on Facebook by a competitor, Coastal Contacts.

Coastal Contacts encouraged Facebook users to “like” its page and in doing so, promised them a free pair of glasses. It also promised discounts of 70 percent on contact lenses. The rival, 1-800 Contacts, said that Coastal Contacts did not disclose the shipping and handling fees associated with the offer for free glasses and that not all styles of glasses or lenses were available in the offer.

In addition, the company contended that users who “liked” the Coastal Contacts page in order to get the free glasses were inadvertently endorsing the company.

The National Advertising Division ruled that all claims for free merchandise must clearly disclose any hidden fees and conditions at the outset of the offer, including increasing the font size of the message that “conditions apply.” Facebook likes can be interpreted as “conveying a message of general social endorsement,” the ruling said.

“If what you are offering them in exchange for likes is not real, then those likes were obtained through deceptive advertising,” Ms. Levine said of the ruling.

One of the first social media cases taken up by a related organization, the Electronic Retailing Self-Regulation Program, involved Twitter. In July 2010, the program recommended that Liquid HCG Diet discontinue using testimonials that it made on Twitter — such as, “Becky and husband lost 14 lbs in 2 days!” — and claims on Facebook that said “Lose around a pound a day” and “Lose 30 lbs in a month, it’s easy and quick!”

Twitter now offers advertisers options like promoted tweets that make it more clear to users which posts are advertisements and which are authentic content.

“It’s kind of a reminder to advertisers that even though the medium changes the rules stay the same,” Ms, Levine said.

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Twitter: Brands Can Now Target Promoted Tweets

Twitter continues to expand the effectiveness of “promoted tweets” (also known as ads), and today they are announcing a pretty significant new feature for advertisers.

Brands can now target Twitter users by location with their promoted tweets. For instance, if a brand wants to promote a tweet concerning a promotion that’s only taking place in Los Angeles – they can promote the tweet to their users in the L.A. area, or California or however specific of a location they wish.

From the Twitter Advertising blog:

Today we’re introducing targeted Tweets, an enhancement that enables brands to reach specific audiences on Twitter without first sending a Tweet to all followers. Now global brands that have different launch dates for several countries can send tailored messages at different times, customized for the users in each country. Mobile app providers who only want to reach customers on one device can do so without also sending the message to desktop users.

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Foursquare Lets Businesses Talk to Users

Foursquare will start letting businesses capitalize on the enthusiasm of customers who’ve checked in repeatedly by rolling out a way to message them, starting today.

Through the “local updates” tool, businesses can send their updates to a pool of users who will be picked by Foursquare’s algorithm based on the frequency and recency of their check-ins and the businesses they’ve “liked” (a feature Foursquare made available with its redesign last month).

It could give the nearly 1 million businesses that have claimed their listing on Foursquare a stronger incentive to be active on the platform, since they can place messages about specials and events for free in the activity streams of users who’ve likely already spent money in their stores and had enough of an affinity to want to broadcast their visit to friends.

“Now with local updates, it’s hopefully a tool that merchants engage with every day,” said Noah Weiss, the Foursquare product manager who oversees all merchant-facing tools, who noted that users will also have the ability to opt out of receiving updates from a business.

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