Social Media Advertising

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Social Media Advertising

Sep 13, 2017

Social Media Advertising

Ads tailored to fit your interests

Ads on social media are kind of like dinner at KFC: cheap and effective. Because of this, it's no surprise that the number of companies advertising on social media is skyrocketing. Over the past 2 years, social media advertising budgets have gone from $16 billion to $31 billion worldwide and are still on the rise.

Social media advertisement isn't just for brands that allow skinny jeans at work. Every one of the global top 100 brands has run an ad on YouTube within the last year. So, what's going on with these social media ads? Why are top companies so eager to push product in this non-conventional method?

The answer comes when we look at the very nature of social media. You and I both know that when we started tweeting about our doctor appointments that we as a culture gave up on anonymity. This means that social media platforms have access to all kinds of fun information about you, the potential consumer, that is invaluable marketing data. For example, instead of just knowing semi-useful information like where you are regionally or what age bracket you belong to, they know more relevant things through your selected interests and through your search history, like if you are into fashion and shopping online. Then they can display an ad about the latest summer dresses knowing that you are more likely to be triggered by that ad than someone who only cares about golf. If you really want to know what someone has been up to online, I suggest looking at the ads on their social media.

Pushing ads based on the habits of consumers is called "behavioral targeting" and it allows social media platforms to show you ads that pertain to you and that you are more likely to pursue. Facebook ads have a 9.1x higher click-through rate than traditional web advertising.

So, it's effective. Big deal. So is a Maserati, but talk to me about the cost. As it turns out, advertising on social media is a big bang for your buck. 50% of surveyed business to business (B2B) marketers said that social media advertisements were "very low cost" or "somewhat low cost", this is compared to only 42.5% who said that search ads and the 41.7% who said that display ads were low cost. Advertisement on social media is a good price and works well.

There are other ways to advertise on social media besides the direct "targeted ad popping up in the consumer's feed." Another popular method to the madness is via social media influencers or people on social media who directly influence other's opinions. You know how you are more likely to buy the same laundry detergent your mom does because you know her and trust her opinion? Word of mouth marketing influences somewhere between 20-50% of all purchasing decisions according to McKinsey Quarterly. The thing is that word of mouth marketing is no longer limited to only people who we have direct contact with. It now includes a whole world of social media influencers. In fact, according to Twitter's research, 49% of consumers look to influencer's opinions before making a purchase and 40% of consumers made a purchase because of an influencer's tweet. Marketers spend over $1 billion on Instagram influencers. And here you thought that millennials weren't making any money.

Advertisement on social media is growing quickly and for good reasons: it is affordable and it gets results. Because advertisements can be tailored to the individual, either because an ad was selected for them or because of an influencer who they chose to follow, they are more likely to bring in a consumer than a traditional method.


Jon Pfeiffer is an experienced entertainment and copyright trial attorney practicing in Santa Monica. Jon is also an adjunct professor at Pepperdine University in Malibu, California where he teaches Media Law. COM 570 covers First Amendment issues as well as copyright, defamation and privacy.

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