Is Social Media the Ultimate Brand Marketing Channel?

Apr 26, 2012

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In the past month, online brand marketing has become the subject of a lively debate in the marketing trades, specifically AdExchanger  and Advertising Age. Impatient with the slow growth of brand advertising online as well as the persistent absence of a validated method for measuring return on social media marketing investments, marketing services experts are openly questioning the viability of online media as a brand marketing channel. 

Most online marketing professionals have heard these arguments before, but this recent incarnation began with an article in Advertising Age reporting the findings of a study from the Ehrenberg-Bass Institute which found that only 1% of brand fans on Facebook actually engage with brands.  Two weeks later, the New York City-based venture capitalist Jerry Neumann wrote a piece in AdExchanger in which he strongly suggested that online media doesn't work for brand advertising.  The problem with both of these polemics is that they both rely on faulty assumptions about the way that users actually consume online media.

Facebook as a Word of Mouth Marketing Platform

Brand fans actually comprise a tiny minority of Facebook users and, as the research from the Ehrenberg-Bass Institute revealed, they tend to already be heavy buyers of the brands.  Due to this fact, one occasionally hears marketing experts argue that marketing on Facebook only reaches people who are already your customers and thus is not effective for growing brands.  However, Facebook is not simply a network of static web pages but rather a networking platform that enables a broad array of dynamic interactions between individual profiles and pages.  When a user becomes a brand fan or interacts in any way with a brand whatsoever, that action is broadcast across his/her entire social network on Facebook, presumably many of whom are not currently customers of the brand. 

Still, social media marketing detractors will argue that only 1% of brand fans actually interact in any way with the brand.  However, as Andrew Lipsman from comScore points out, 1% is more than sufficient to generate broad reach among prospective customers.  It turns out that brand marketing on Facebook, and arguably social media marketing in general, is actually a digital iteration of word-of-mouth marketing whereby heavy buyers or "brand loyalists" are activated via engaging, creative content and programming to become advocates for the brand among prospective customers.

Brand Advertising Online Did Not End with the Banner Ad

Almost a third (31%) of display ad impressions on websites are never seen by anyone, as a recent study from comScore revealed. This fact, coupled with the very limited choices in ad formats on most web sites that have persisted over the almost 20 years since online media began, has led some to believe that online media is not suitable for brand advertising. However these experts are ignoring the revolution currently taking place in the way people consume online media.

The old practice of flipping through web pages is rapidly ceding its prominent position to streaming audio and video, mobile content, and social media.  The following are just a few data points which evidence this major transition:

  • Web browsing now only accounts for 16% of network traffic according to a recent report from networking equipment company Sandvine
  • Real-time entertainment traffic (streaming audio/video) now accounts for over half (53.6%) of network traffic (Source: Sandvine)
  • People in the U.S. will watch more video from legal online sources this year than they will on DVD or Blu-ray according to a recent study by global intelligence firm, HIS
  • internet video consumption now rivals basic cable according to a recent report from networking equipment company Sandvine
  • Devices other than laptops and desktop computers (e.g. game consoles, set top boxes, smart TVs, tablets and mobile devices) now account for over half (55%) of real-time entertainment traffic (Source: Sandvine)

What all this means is that, while we may have exhausted the potential of the banner ad to grow brands online, we have only just scratched the surface when it comes to the full potential of online media as a brand marketing channel.  Online media is currently morphing into a virtual world of streaming vibrant content that people can consume anywhere at any time, share with friends, discuss with others and even consume with others simultaneously from separate locations.  The branding potential of online media is becoming exponentially vaster because these dynamic, social experiences have the ability to create powerful brand associations, strong brand memory structures and reach broad audiences in ways that never existed for broadcast TV.  The present and pressing task is for publishers and network providers to work with advertisers and their agencies to develop these opportunities.

However, given the nature of the latest iteration of online media, fully capitalizing on the branding opportunities will require a clever combination of earned, owned and paid strategies.  Facebook is already working to facilitate these kinds of integrated strategies through its new tools "Timeline", "Reach Generator" and "Premium Ads".  Moreover, leading global brand marketers like Coca-Cola, Ford and Procter & Gamble are already capitalizing on the myriad of ways to harness online media to build brands.