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Is Social Media Actually Helping Your Company’s Bottom Line?

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MAR15_03_socialdaily

When it comes to business, we talk too much about social media and expect too little. It’s like the old joke about sales people: one person says, “I made some valuable contacts today,” and the other responds, “I didn’t get any orders, either.” Companies measure the market results of their sales investments. But few have measures or even have accountable managers in place for their social media investments, and only 7% say their organizations “understand the exact value at stake from digital.” Meanwhile,according to a Gallup survey, 62% of U.S. adults who use social media say these sites have no influence on their purchasing decisions and only 5% say they have a great deal of influence.

Consider:

  • The most common metrics for evaluating social media are likes, tweets, reviews, and click-through-rates (CTRs) for online ads — not cause-and-effect links between the medium and market results. The basic investment logic is typically no deeper than a version of “Fifty million tweets or likes can’t be wrong” . . . or can they? There is justifiable skepticism about this data. Farming services spike these numbers, with evidence that one in three online reviews is fake. For $50, you can buy 1,000 Likes, 5,000 Twitter followers, or 200 Google +1s. With real people, moreover, 8% of internet users account for 85% of clicks on display ads, and 85% of social media updates come from less than 30% of a company’s social-media audience. One online reviewer, Harriet Klausner, has reviewed more than 25,000 books.
  • A Forrester study found that posts from top brands on Twitter and Facebook reach just 2% of their followers (note: that’s followers, not new customers) and only 0.07% of those followers actually interact with those posts. As others have noted, people are more likely to complete a Navy Seal training program or climb Mount Everest than click on a banner ad.
  • There are, as always, opportunity costs. Since 2008, according to a McKinsey study, companies have devoted more time and money to social networks and 20% less to e-mail communications. Yet, the same study found that humble e-mail remains a more effective way to acquire customers — nearly 40 times more effective than Facebook and Twitter combined. Why? Because 90% of U.S. consumers use email daily and the average order value is 17% higher than purchases attributable to those social media.

Technology changes fast — remember MySpace and Friendster? — but consumer behavior changes more slowly. As a result, people tend to overhype new technologies and misallocate resources, especially marketers.

When banner ads first appeared their CTR was 10%, but that soon fell due to heavy usage by firms, and clutter. Research has long demonstrated that ad elasticities are generally very low, that firms often persist with ineffective ad media (because they have the wrong measures or no measures), and that companies routinely over-spend on ads (due to ad agency incentives, the fact that ad expenses are tax-deductible, and companies’ use-it-or-lose-it budgeting processes). Other research indicates that traditional offline consumer opinion surveys (when they use representative samples) are better at predicting sales than clicks, number of website visits or page views, positive or negative social media conversations, and search (although online behavior is good at tracking the reasons behind week-to-week changes in sales.)

With new media, therefore, great expectations are common and missing the goal is understandable: it takes practice and learning. But changing or dismantling the goal posts is a different story.

It’s now common to say that social media is “really” about awareness, not sales. Companies that “get” social media should be “relentless givers [who] connect instead of promote.” In fact, forget “traditional” ROI (that lovely qualifier), focus on consumer use of social media and, instead of calculating the returns in terms of customer response, measure the number of visits with that social media application. How convenient: to be evaluated with a metric without tangible marketplace outcomes. But it’s wrong, a circular argument, and smart companies should not follow this flawed business logic.

The value of any advertising, online or offline, depends on what effects it has on purchases. As Bill Bernbach, David Ogilvy, and other ad execs have emphasized, “our job is to sell our clients’ merchandise, not ourselves.” Those effects are difficult to measure, because consumers buy (or not) for many different reasons and even good ads in the right media have both carryover and wear-out effects that vary over the product life cycle and an ad campaign. But to justify an investment by activity and not outcomes is a tautology — we advertise because we advertise — not a meaningful business argument.

Even an activity measure, moreover, assumes the consumer can see the ad. Did you know that a display ad is deemed “viewable” if at least half of each ad is visible on your computer or smart phone for a minimum of one second? Data released in 2014 by comScore indicated that more than half of online display ads appear on parts of a web page that are not viewable. In response, the Interactive Advertising Bureau noted that for various reasons 100% viewability is “not yet possible,” but the industry should aim for 70%. In other words, hope that “only” 30% of your intended ads are not seen by anyone for at least a second!

Further, what we now know about shopping and social media activity says that online and offline behavior interact. They’re complements, not substitutes, and you ignore these interactions at your peril. The vast majority of communications on social media sites are between friends who are within 10 miles of each other. The same is true about the available data on buying behavior. As Wharton professor David Belldocuments, the way people use the internet is largely shaped by where they live, the presence of stores nearby, their neighbors, and local sales taxes.

For years now, we have heard big talk about the big data behind big investments in social media. Let’s see who is behind the curtain. It’s time to expect more from social media and prove it. The Association of Advertising Agencies has refused to endorse the 70% goal and wants 100% viewability, which means if an advertiser buys 1 million impressions from a site, that site must display that ad as many times as it takes to ensure a million viewable impressions. In 2014, The Economist guaranteed those who buy space on its apps and website that readers will spend a certain amount of time there. For instance, it will guarantee that a site containing an ad appearing for three weeks will receive X hours of readers’ attention — documenting, not assuming, engagement with the medium.

Other companies try to trace the links (or not) between online platforms and sales outcomes. They buy point-of-sale data from retailers and have systems that purport to match Facebook or Twitter IDs, for example, with a given campaign and subsequent retail sales for a product. The validity of these approaches is still to be determined. And the FTC has raised concerns about privacy issues and disclosure practices, and has urged Congress to pass legislation to give consumers the right to opt out. But shining light on what does and doesn’t happen here will be a good thing.

Business success requires linking customer-acquisition efforts with a coherent strategy. You can’t do that if you are not clear about the differences between hype and reality when it comes to buying and selling. And we should care about this distinction for reasons that go far beyond making even more ads more viewable. Companies’ abilities to make better use of their resources are important for society, not only shareholders. It spurs productivity, and productivity — not just tweets and selfies — is what spurs growth.

 

source:https://hbr.org/2015/03/is-social-media-actually-helping-your-companys-bottom-line

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Massive change coming to WhatsApp with introduction of ads

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WhatsApp will see a massive change by 2020 with the introduction of adverts into the instant messaging app.

It’s been rumoured for a while and now WhatsApp looks set to finally bring adverts to its popular messaging app.

The Facebook-owned firm revealed the news during its annual Marking Summit in the Netherlands, with a rollout expected next year.

Photos of the way these new adverts will look have even been posted online with attendee Olivier Ponteville, giving fans a closer look at what’s to come.

The image, which can be seen on Twitter, shows how ads currently appear on Facebook and Instagram with a WhatsApp screenshot then revealed with a full-screen advert.

According to technology website BGR, once the message appears users will be able to “swipe up when an ad appears for more information about the product or service being advertised.”

Adverts in WhatsApp have been spoken about for a while but this is the first evidence that things are changing within the popular service.

How fans react is yet to been seen but it’s unlikely to go down well with its billions of users.

The bad news is that it seems there’s nothing that can be done to stop this new feature from arriving within the app.

It seems almost certain that there will be no way to switch them off or hide these paid-for messages which may prove to be hugely irritating.

Source: https://www.thenewsguru.com/technology/internet/article/massive-change-coming-whatsapp-introduction-ads/

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Facebook Messenger finally adds quoted replies

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Today Facebook Messenger has added a sorely missing feature – quoted replies. This allows you to reply to a specific message in a conversation, and is incredibly helpful when you’re engaged in chats that have a big range of topics. Using the new feature, the people you’re talking to will now know exactly what you were replying to with that “LOL”, for example.

This has been a feature in WhatsApp, which is also owned by Facebook, for a very long time, and it’s always been sort of a baffling omission in Messenger. So it’s good to finally see it there too.

In order to quote a specific message, long tap on it and you’ll see a new Reply button to the right of the reaction emojis. Tap that, write your reply, and, just like in WhatsApp, the message you’re replying to will appear above your reply. Easy. This potentially means you’ll have less misunderstandings with your friends as to which message was referencing what.

The feature is rolling out now on both iOS and Android.

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Internet

Facebook’s new privacy tool is a gamble that could backfire on its ad business (FB)

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  • Facebook finally plans to launch its “clear history” privacy feature in 2019.
  • It was announced by CEO Mark Zuckerberg back in May 2018.
  • CFO Dave Wehner talked about it at a conference on Tuesday and warned that it could damage Facebook’s capacity to target users with ads.

Facebook says its long-awaited “clear history” privacy feature will finally launch at some point in 2019 but it could prove problematic for its business.

Back in May 2018, as the Silicon Valley social networking giant battled with the aftermath of the Cambridge Analytica scandal, CEO Mark Zuckerberg announced the company was building a “clear history’ feature that would let users instruct the social network to delete its records of what websites it had visited and links it had clicked.

Since then, the company has said little, but at a Morgan Stanley conference in San Francisco on Tuesday, CFO Dave Wehner confirmed that it’s still in the works. And, he added, it could damage some of Facebook’s efforts to target users with adverts.

Wehner brought up the pending feature after being asked about privacy headwinds facing Facebook. “Later this year, we’ll be launching clear history which will also affect our ability to do third-party targeting for those who would clear history,” he said.

The exec added: “So I think broadly, it’s going to give us some headwinds in terms of being able to target as effectively as before.”

It’s not clear here if he’s specifically talking about the feature or the consequences of privacy issues more broadly; a Facebook spokesperson did not immediately respond to Business Insider’s request for clarification.

“That being said, I think we’ve been able to navigate relatively well so far, and we’ve had some headwinds … we’ve been able to do better than expected in Q4, so I’d say the landscape is definitely changing in a direction that make sit more difficult for us to grow, and gives us a little less visibility in how this will actually play out,” he said.

The remarks indicate that the feature is, to some extent, a gamble: Facebook is betting that the goodwill the privacy measure is taking will offset any damage it does to its revenues.

In May 2018, as Facebook battled with the aftermath of the Cambridge Analytica scandal, CEO Mark Zuckerberg announced the social network was building a “clear history” feature that will let users instruct the social network to delete the info it holds on them. The extent to which it is a reactionary PR move was revealed by BuzzFeed News last week, when it reported that Zuckerberg decided to announce it in response to the Facebook’s mounting scandals, and that it “didn’t exist; it was barely an idea” at the time.

If Facebook has underestimated the popularity of the tool, of the damage it does to its ad targeting capabilities, it could be another self-inflicted black eye for the company.

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