It's not just the advertising, it's what you do with it that counts
In response to Jim Marshall's latest article, Will Ashton, MD of Alchemy Social, argues that social advertising will prove hugely beneficial and cost effective for brands and will, in all likelihood, contribute to revenue like Facebook envisages...
Jim Marshall from Aegis Media raised some interesting questions last month in his article - Facebook - Is it worth it? - in which he presented his thoughts on the real value of Facebook. In the wake of the social media giant's IPO, the business world buzzed with conversations around its record valuation and where Facebook would derive its revenue from. Naturally, the mantle fell to advertising.
With recent platform developments around the Open Graph and Facebook Timeline, Facebook is making serious steps to ensure that advertising via its platform is as appealing to businesses as possible.
Facebook itself realises that the advertising landscape is still developing. In Facebook's S-1 the company highlighted that:
"Our advertisers typically do not have long-term advertising commitments with us... many of our advertisers spend only a relatively small portion of their overall advertising budget with us. In addition, advertisers may view some of our products, such as sponsored stories and ads with social context, as experimental and unproven.
"Advertising on the social web is a significant market opportunity that is still emerging and evolving. We believe that most advertisers are still learning and experimenting with the best ways to leverage reach, relevance, social context, and engagement offered by Facebook."
As Jim rightly points out, Facebook delivers one of the most powerful forms of marketing communication: word of mouth. But to properly harness the possibilities that this medium presents, brands need to look beyond the platform and assess the tools that are available to create campaigns that work for their audience and help make the most out of their social advertising spend.
Recent research from Econsultancy indicates that social media marketing is the fastest-growing channel in terms of investment, with almost 70% of marketers planning to increase their budgets for off-site social media in 2012, yet the paradox remains that it is the hardest to measure.
First, let's look at the audience. Demand for advertising in this space is growing at more than 100% per annum as more brands begin to recognise the added value of targeting and customer engagement - yet the growth of social media users is beginning to plateau and take on a more organic gradient. The market has now entered a phase: there is no longer super growth in user numbers to dilute the increases in cost caused by demand increases. To put it simply - there are not enough 'new' users in this space to absorb the higher demand costs.
So what should a brand do in this situation? How can a brand succeed when a platform is nearing maturation? In order to make social advertising 'worth it', brands needs to do more than just implement campaigns - they need to analyse their strategy and make changes accordingly.
Campaign management through a network as vast as Facebook needs to address two key areas - implementation and management. Get this right and the numbers become less of a daunting task - they become a true wealth of opportunity and a chance to target the right people with the right content.
Specific Facebook advertising platforms that are now widely available offers brands the technology to quickly and easily navigate across Facebook's wide targeting options. In a couple of clicks targeting groups can be selected at scale or for pin point accuracy - for example targeting the United States as a whole or segmenting down to a City; radius around a city; State/Province or even ZIP code.
Through features such as budget controls and one-click campaign implementation, Facebook ad platforms allow marketers to group together any number of locations (country level, regions and cities) and target groups (based on a range of information from keywords to relationship status etc). These centralised tools ensure that marketers have full control over budget spend - avoiding the need to create multiple campaigns.
Once you've figured out who needs to see your ads, the next thing to conquer is the continual management of these campaigns. By leveraging tools such as automated rules-based optimisation and ad management, marketers can monitor and amend a whole campaign based on its performance - anything from spend to CPC and CPA. If your campaign is under-performing, you can simply shut down or change tact without having to re-implement a campaign from scratch. This level of freedom can be the difference between success and failure; something that marketers need to be aware of.
The current social media landscape means that marketers need to be able to advertise on Facebook to suit the specific needs of each campaign - so brands need to make the most of the tools and information available to them to create the most complex and diverse campaigns.
The way social advertising needs to be approached has changed, in the same way that television advertisers were forced to change the content they produced when their medium of entertainment matured. Social advertisers are now finding that they need to produce ad cycles that allow users to interact and even socialise with brands within a platform, rather than direct traffic away from it. Done correctly, social advertising will prove hugely beneficial and cost effective for brands and will, in all likelihood, contribute to revenue like Facebook envisages.
So in answer to Jim's question - yes it is worth it, you just need to have the tools to do it properly.
 Marketing Budgets 2012, Econsultancy report