Photo: RetailWire
Has social advertising broken through as a purchase driver?
MarketingCharts staff
Through a special arrangement, presented here for discussion is a summary of a current article from MarketingCharts, a Watershed Publishing publication providing up-to-to-minute data and research to marketers.
Social media ads have seen rapid spending increases in recent years, and that increasing flow of money is having a profound effect on social advertising’s status as a consumer purchase influencer, according to MarketingCharts’ 3rd annual “Advertising Channels with the Largest Purchase Influence on Consumers” report. As a result, social ads now are said to influence purchases for more American adults than radio ads, despite having lower reach among the adult population.
Not surprisingly, social ads have their largest impact on youth. This year, one in five Millennials (18-34) surveyed report having made a purchase in the prior six months due to ads on social networks. That marks a 65 percent jump from the 2014 study, in which fewer than one in eight (12.1 percent) reported such an influence from social ads.
That increase catapults social ads into the realm of the top purchase influencers for Millennials. Ads on social platforms outrank direct mail, radio, print and a host of other media as stated purchase influencers for this demographic and are closing in on TV advertising (cited by 25.8 percent as having led to a purchase).
Part of social ads’ rise in perceived influence can probably be attributed to a greater presence. In a new addition this year, the study ranks the media in which consumers feel most exposed to advertising. The top response for Millennials? Social media.
The next-leading location for Millennials’ ad exposure is smartphones, a result that is likely tied to the prominence of social media use on these devices. One cautionary note on social media’s reach came from a recent IAB study on multiscreen video that showed almost half of Millennials (18-34) felt that there are too many ads on their smartphones, compared to one-third who feel that way about ads on their desktops.
- Social Advertising Makes Big Headway As Consumer Purchase Influencer – MarketingCharts
- 3rd Annual “Advertising Channels With the Largest Purchase Influence on Consumers” Study – MarketingCharts
- How Are Consumers Spending Their Time Online? – MarketingCharts
- Ad Clutter A Bigger Problem on Smartphones Than Desktops, Millennials Say – MarketingCharts
- Traditional TV Viewing: What A Difference 5 Years Makes – MarketingCharts
Discussion Questions
DISCUSSION QUESTIONS: Will social media soon eclipse television ads as the leading purchase influencer? What factors are still restraining social media’s impact as a purchase driver and the ability for stores to capitalize on its reach?
Poll
BrainTrust
Kim Garretson
Advisor, MyAlerts
Ben Ball
Senior Vice President, Dechert-Hampe (retired)
A few comments. 1. Since this was a survey of Millennials I was most interested in the last number for “none of the ads influenced me to make a purchase.” The numbers of Millennials using ad blocking is more than 60 percent. 2. Social ads, especially in Facebook, continue to upset Millennials when items they’ve viewed on retail sites trigger a barrage of retargeting ads for days/weeks, especially when the ads are for purchased products and products out-of-stock. 3. Just read the trade media about the failure of Buy buttons in social ads to understand that the jury is out on purchase influence.
My conclusion: The only reason social ads would eclipse TV ads anytime soon is because Millennials increasingly do not watch TV on TVs, and when they do they often use DVRs to skip ads.
Oh those social ads that refer to stuff I’ve already bought drive me crazy. I did a ton of online searching and buying while building a new home and the incessant ads haunted me for over a year! Ugh.
And imagine the user experience of seeing ads on products you found out-of-stock with many viewers thinking this means the product is back. Then clicking back disappoints you a second time. And retailers and brands continue to spend big retargeting dollars on this crazy way to market. That’s why offering alerting on back-in-stock to then suspend retargeting is the solution.
Survey research is really not accurate on purchase influence because the majority of purchase decisions are centered in the subconscious, which has no “voice box.” So when people are asked what influenced them, their rational brain makes a choice of what to say. Not really connected to the emotional trigger.
Media (ads or otherwise) can and does trigger emotions which do trigger purchases, so I’m not saying ads have no influence. But to rely on just survey stats to say social is more influential than other types of media is not a reliable measure.
This is really interesting. For years we marketers and agency types argued that you couldn’t accurately measure the direct purchase influence of TV advertising. That it was a “steady drip, drip, drip” that created a brand image that pushed our product into the evoked set of possible products to fill a need when the consumer had that need. And that that effect made our ad dollars well spent. (“Please don’t cut my budget Mr. CFO! I promise sales will go up next month when the advertising kicks in!”)
Now that we have a vehicle that can be measured much more accurately and immediately some want to decry its effectiveness and declare it DOA. I think we missed a train that left the station long ago if we do. There are two distinctly different forms of “social media advertising.” That which replicates manufacturer TV ads online should be just about as effective, but they can be much more efficient. Both net cost per impression and the ability to target those impressions drive that efficiency. But the real opportunity is with the second form of social advertising. That form takes the most powerful endorsement — word of mouth — and amplifies it throughout a person’s social network in an instant. That sword will cut both ways of course. But when it is working for you I don’t believe there is any other form of advertising that can be more effective.
I am going to need a bit more information here. I would like to know what is considered an ad in this survey. Millennials have a real adversity to being sold to, however if we are talking about say a brands presence on Snapchat, I can hardly call that an ad in the old sense of the word.
Also, if the consumer chooses to follow a particular brand and that brand has items that pop up in their stream, do we call that an ad? It is something that does not require listening to or losing time on. These micro-moments simply remind us of a brand we already said we liked and we can look at it or not. Not very invasive.
So is this type of advertising going to eclipse TV ads? You betcha! This is much more in line with what today’s consumer prefers.
For my 2 cents.
With the popular use of DVR devices, ads on TV will continue to be sped through and ignored. I think the biggest revolution in influencing buying behavior is Pokemon Go. How will this change habits? It is still not fully realized.
Social ads can have relevance to younger consumers, however, they aren’t all that willing to click on ads as much as one may think, as detailed in this study. The response rates for these ads are not all that impressive. Will social ads surpass TV ads soon in response rates? Perhaps, however, innovators continue to evolve their tactics in social channels to capture the shortening attention of the shoppers … of all ages.
This study reinforces why I continue to state very clearly that I believe it is only a matter of time before Facebook makes the decision to become an e-commerce retailer, probably by acquiring Jet.Com and/or Pitney Bowes. Facebook, their their platform, and membership in excess of one billion people is well-positioned to expand into e-commerce.