Last week, Yahoo executives told several news outlets that, counter to earlier speculation and rumor, it was not going to sell its Right Media online advertising exchange, and that it was recommitting to ad technology investments. For all the product-focus talk surrounding new CEO Marissa Mayer, Yahoo appears to be continuing on a content plus ad network strategy similar to that of Aol. Or to MSN, for that matter. While not quite in the category of re-arranging the deck chairs on the Titanic, these machinations are peripheral to the real engine of online advertising – search – and the potential ad growth accelerator – social media.
Google comfortably dominates search right now, but Facebook is getting hammered for not growing social media ad revenues fast enough. A few months ago, I pointed out some of the realities of social media advertising: its volume comes from cheap inventory, big advertisers often spend more on their Facebook pages than on Facebook ads, and spending hasn’t exploded because the industry hasn’t really figured out how to harness social media for brand advertising.
But there has been some recent progress on the social media ad front. Nothing like a major breakthrough, but some promising steps forward, including:
- Targeting. Facebook raised some eyebrows recently when rumors leaked out that it would allow marketers to target messages by personal information like phone numbers and email addresses. It turned out that what Facebook was really planning was a way for companies with already established customer relationships to integrate their CRM data into their Facebook campaigns. That’s a useful response to marketer demands, but it’s not nearly as big a deal as Twitter’s official roll-out of interest targeting that same week. Twitter will enable advertisers to fine-tune its canned list of topics by adding their own followers and named tweeters into a mix for modeling potential ad targets. Twitter isn’t revealing the secret sauce behind its algorithms, but you can be sure Facebook will be watching closely. And Facebook bought Threadsy, a maker of Klout-like influence ranking service that it will no doubt add into its targeting and monitoring tools mix at some point.
- Cleaning up Likes. Besides working on targeting and thinking about influence, Facebook has fessed up to the fact that bots are polluting its network. It announced some strategies around protecting the integrity of user identities and actions, including a policing system for false Likes. While some brands may see their total Like count decline, their data will be better. Perhaps then they can shift focus on monitoring truly useful metrics like conversions and lifts in brand awareness and consideration.
- Showing effectiveness. Proving social media marketing effectiveness still remains challenging. Facebook has sponsored some comScore studies that help prove its case, a necessary step in addition to providing its own analytics tools. And the services firm Webmarketing123 surveyed B2B and B2C marketers who said that social media seems to be gaining ground compared with pay-per-click ads as a means of lead generation. But search engine optimization remains by far the most effective lead gen tool, even though it, like social media, remains difficult to measure, according to those surveyed.
Still not search
Social media has something of an inferiority complex. Much of the advertising that runs on social media is pay-per-click direct marketing that, even with targeting, suffers in comparison with search. It always will, as search is such a powerful indicator of active intent. Facebook knows that, but its search dabbling is just that – dabbling. Marketers can’t buy keywords yet, and unlike its display ad business, Facebook search advertising doesn’t offer scale.
App makers and brand page marketers are figuring out a few ways of getting value out of Facebook’s first paid search efforts, but Facebook is no threat to Google. While social signals can be a useful input into search results ranking, they’re no substitute for the heavy lifting of indexing and analyzing the content of the web. Facebook is smart to experiment with search, but it’s even smarter to focus its technical and support resources on brand advertising.