Globally, over 3.6 billion people use social media, with users spending over two hours a day on social networks. The sheer number of people using social media has made it one of the most important verticals for marketing –– but just as it is a fast growing industry, it is a rapidly changing one as well.
With the number of social media users projected to hit 4.41 billion by 2025, it is crucial for marketers to understand how social media marketing works, where it began and where it is going.
A quick history of social media
Arguably, when the first social networks were created, marketing was far from anyone’s mind as a viable business outcome. In the early days of the internet, the ability to socially connect was limited to Bulletin Board Messaging, emails and chat rooms. As the internet became more developed, social network platforms emerged such as Six Degrees in the US, which is widely believed to be the first social network website where people could upload profile pictures and have friend lists. But the lack of people using the internet at the time meant networks were limited. In the UK, FriendsReunited was the first popular social platform in 2000, where users could be reunited with friends from their past. The early 2000s saw the emergence of several platforms such as Friendster (2001), which had over one hundred million users at one point, professional network LinkedIn (2002), MySpace (2003) and of course, Facebook (2004). Different social networks emerged with different functions such as Twitter (2006), which prized brevity, Instagram (2010) for picture-sharing and Snapchat (2011) for disappearing video communication. And just as new platforms emerged, others fell to the wayside as either users or investors lost interest. Take Vine for instance –– despite having 200 million active users, the six-second video social network shut down due to lack of monetisation.
Monetising social media
While social networks were first and foremost envisioned as ways to connect people, there was a quick realisation that the amount of data being generated by users could drive more efficient advertising.
MySpace was the first social network to monetise based on behavioural targeting. It offered advertisers the chance to buy targeted banner ads but, MySpace only had a click-through rate of 4 in 10,000 (0.0004%)— far less than banner ads for non-social media sites, according to an article by Fortune.
Where MySpace failed, Facebook succeeded. Facebook also sought to monetise its network through advertising, using its user data to offer advertisers more targeted opportunities for ad placements. It succeeded in better engagement for various reasons, but amongst them were the fact that it encouraged brands to create pages, which allowed users to have a more emotional relationship to brands and the fact that its advertising product was accessible to both big and small businesses. But most importantly, its Open API (Application Programming Interface), meant advertisers could easily extract data to create better campaigns, which created a virtuous cycle of advertising.
And while this was happening, a watershed moment in the history of the internet arrived: in 2007, Apple released the smartphone. Between 2007 and 2011, the number of internet users doubled and there was a need for a more robust way to deliver ads on mobile devices.
In 2014, Facebook launched its own mobile targeting ad network, Facebook Audience Network (FAN). FAN allowed advertisers to extend their Facebook ad campaigns to third-party sites and in 2016, expanded this offering to mobile websites while having access to Facebook’s treasure trove of user behavioural data. Since then, it has shaped the hallmarks of social media marketing including: in-feed advertising, strong visual assets and videos, and the ability to sync and build lookalikes from customers lists.
Social media & consumer buying behaviour today
Today, social media marketing is one of the most predominant ways for brands to connect with consumers. It is critical to all parts of the marketing funnel, from both consumers’ and marketers’ perspectives. A majority (54%) of social media users use it to research products and 71% are more likely to purchase products and services based on social media referrals.
Social media has shortened the consumer journey. Not only does it make it much easier for people to discover new products and services, but many move from awareness and consideration to purchase quite quickly. A Deloitte report found that a third of social media users are more likely to make a purchase on the same day as using social media, and consumers who are influenced by social media are four times more likely to spend more on purchases.
Instagram, which has in-stream native advertising both in its feed and in Stories, has made it seamless for consumers’ to go from awareness to purchase in a couple clicks. Most recent figures show that 130 million Instagram accounts tap on a shopping post to learn more about products every month. Twitter, meanwhile, is considered a crucial space for product discovery with 81% going to the platform to find out what is happening in the world. And Tik Tok, the newest of the social media platforms, which rolled out ads in 2019, has also found resonance with users. In a survey, 67% of TikTok users said their ads captured attention, thanks to the user experience being in line with how users use TikTok overall: watching one vertical video at a time.
Overall, social media marketing, which tends to favour in-stream advertising that doesn’t disrupt the user’s journey, have been found to be effective in resonating with consumers and more importantly, influencing purchasing behaviour.
The future of paid social: understand your audience
Social media marketing is all about people and understanding their wants and desires. Unlike in paid search, for example, where people are actively searching for products, so the advertising is automatically relevant, the intimacy of social media advertising – which is part of a user’s time spent in a space of leisure and sociability – means it is critical to know your audience, to make sure you are serving them relevant advertising.
But it is becoming harder to get to know an audience across platforms. Cookies, which made it easy to track users across the web and “know” what your customer likes, are on the cusp of extinction. The growing trend towards user privacy means that social media advertising will be limited to “walled gardens” where users are already logged in and provide their identity. But there is no integration between platforms –– so Facebook doesn’t share its protocols with Google for instance –– and the rise of consented data may mean changes to the rules even within these walled gardens.
The breadth of content on social media means it can be hard to reach customers through organic social alone. For instance, organic reach on Facebook is now just 5.2 percent, which means roughly one in every 20 followers sees your page’s non-promoted content. Paid social is crucial to any brands’ strategy, but getting it right means understanding your audience. Fifty uses audience intelligence to understand people, regardless of which platform they are using. It begins by clustering people based on what they care about –– their shared interests and passions. Having an understanding of people, means we can better serve them ads that they will be interested in on social media, making the experience natural and informative, rather than interruptive.
Whether it be a video on Instagram Stories or TikTok or a post on Twitter, you need to ensure you are placing your paid social advertising on the right platform, at the right time for the right audience. Every single piece of advertising should begin with audience insights. Regardless of what the privacy era brings, audience understanding and relevancy will be the difference between the brands who succeed and the brands who get lost in the sea of social posts.
To discover how Fifty can help your brand build an in-depth understanding of your target audience get in touch with our Sales Team or book a free demo today.
