Guest blog post by Michael Chin, VP of Business Development at SocialFlow:
I remember in the early days of Facebook (and in another life), when I worked on a campaign for a large fashion brand. These were the days when you had to fax in IOs and media plans to Facebook. We delivered a 0.2% Click Through Rate. There was barely any targeting. No data to inform any creative decisions. The customer was blown away. The results were multiples of what they saw traditionally with display. I was puzzled. How could they accept such poor efficiency? How could the industry be OK with it? How could it not be disrupted?
Fast forward a few years and now we regularly hear the industry average on Facebook as being around 0.8% CTR. Yes, I know, in social media CTR isn’t ‘everything,’ but it’s an important one from a sales and revenue perspective, and it’s the most trackable. So, take this as an example to illustrate the point that Facebook and Twitter are good marketing platforms.
I recently had a long discussion with SocialFlow’s product development and account management teams and we dug into some campaign data for customers. Many of the campaigns using SocialFlow’s solutions delivered an average of 7.9% CTR. I’ll say it again. 7.9%.
Why it’s game changing.
As marketing platforms, advertisers can now reach people with an unparalleled level of targeting. We’re all familiar with the power of demographics, or as I like to call it, targeting for dummies. For the first time, we can now target based on interests AND timing. Because of the size of Facebook and Twitter, this can be done at scale.
Think about that for a minute. It’s like asking your parents for that toy you’ve had your eye on and knowing exactly when they’re in the right mood and frame of mind, when your odds of success are significantly higher, to ask. Not only are you more likely to get what you want, but the level of effort and potential cost is much lower.
Amazing. But, it’s very difficult to get right and get maximum return. Why? The human factor. People’s interests and willingness to take an action you want them to is multi-dimensional, ever changing and extremely unpredictable. Not to mention, when there are thousands of pieces of content tugging at your very finite attention, you end up making split second decisions on what you engage with.
Tapping into the variables.
We all understand the value of demographics. It was the best the TV, print, radio era had to offer. It was fine then; just like waiting 48 hours to develop the roll of film I shot was fine back in 1982. By today’s standards, the efficiency it delivers is horrible. Nevertheless, it represents the lowest common denominator of segmenting customers.
With social platforms, we now have the ability to use the interest graph. Admittedly, the industry is barely scratching the surface of what’s possible here. It’s been a massive challenge getting useable data on a repeatable basis but that problem has largely been solved. Now we can layer people and their interests together.
What we’ve learned is that these variables are not static. As an executive at a technology company in my late thirties, living in New York City, and having demonstrated an interest in photography and soccer, when I am likely to pay attention (and convert that attention to action) to a message about the newest sensor technology in Nikon DSLRs, changes. Present that message at the wrong time and at best it’s ignored. At worst, you’re blocked. Present it at the right time and you have my undivided attention. I’ll buy your product and I’ll even tell everyone about it. As with many things in life, the intersection of timing with everything else can make all the difference in the world.
You’ve now got four variables at your disposal: demographics, interest, creative and timing.
Bringing it all together at scale.
For the first time, advertisers have the ability to manage campaigns with multiple variables in real-time. You can experiment with creative variations. Target each differently and even allocate and reallocate budget based on shifting interests and opportunities.
As we saw with paid search, tapping into buying patterns ahead of the curve produces immense price efficiency. Being able to do this in real-time is a game changer at the scale of Facebook and Twitter, with real dollars.
Talk about being able to get the right message to the right people at the right time for the right price.
You are happy with 0.8% CTR. You can get more.
7.9% CTR. That’s what it can mean to get this right.
This is hard stuff. But, clearly it’s possible. At the very least, advertisers can get multiples of what they’re otherwise seeing in traditional digital media. Plus, with a solid content and community program, they can reap all the benefits that social networks and brand advocacy have to offer.
So, the questions for CMOs and those of you that are responsible for getting acquisition and engagement results are: why aren’t you expecting and getting more? Why are you settling? Why aren’t you pushing your people and partners to get you more. It’s there for the taking.
Here’s what I suspect is happening. It’s easy to run campaigns on Facebook and Twitter and it’s easy to beat 0.2%. That’s the nature of the platforms. They’re inherently better than other digital media. But, don’t settle for that. If you get it right the return and results will blow your socks off. It’s there for the taking so go and get it.
From what I’ve seen from the 7.9 percenters, getting it right means:
1. Great content using talent, gut and creativity, but also using data to help inform what to produce.
2. Make full use of targeting and segmentation.
3. Real-time campaign and bid management.
4. Doing this at scale.