Tuesday, 20 January 2015

The Billion-Dollar Business of Social Media Advertising

At the end of Q3 2014 Facebook earned US $3.203 billion in revenue.  They beat the Wall Street estimates of US $3.12 billion.  In case you were wondering, according to TechCrunch, US $343 million of Facebook total revenue was earned from ‘the rest of the world’, which includes the Caribbean.

Facebook offers several types of ads, with the most popular being post promotion (boosting) and page promotion.  The other options are pictured here.

Following Facebook's massive success, it’s no surprise that all of the other major social networks are moving to monetize.

Instagram, according to Reddoor.biz, is not quite yet ready to offer ads to the public.  However, the beta monthly pricing ranges from an estimated US $350,000 at lower end to US $1 million at the upper end.

Even though prices are high, the test campaigns yielded thousands of likes and an influx of new followers for the brand using the advertising.

Advertisers have already begun to reap the sweets of advertising on Twitter.  Quora.com explains that users can opt for promoted tweets, promoted trends or promoted accounts.  Promoted tweets and promoted accounts cost between US $0.50- $4.00 per engagement, while promoted trends cost US $200,000 per day.

LinkedIn is also earning substantial revenue from advertising.  Revenue for the third quarter was $568 million.  This was an increase of 45% compared to $393 million in the third quarter of 2013.  
From vacancies to blog posts by senior management, companies are taking advantage of the two ad options on offer: sponsored ads and sponsored posts (Webmarketingtoday.com).  Their rates range from US $10 to US $1,000 or more.  In line with the other networks’ monetization models, users using a set budget can choose to be billed on a pay-per-click basis or incur a set free for every 1,000 impressions received regardless of the clicks received (LinkedIn.com).

Feed the Need
So who is advertising on social media?  Aren't you?

Any business that wants to remain competitive is helping to line the pockets of these major social media networks... ahem is taking advantage of these far-reaching digital marketing channels to promote their products and services!  

The reality is that technology, particularly mobile devices, has made it easy and affordable for persons of all walks of life (think consumers and prospects) to gravitate to social media.  Mobile networks are even offering free access with packages, ensuring that this trend will continue to grow for several years to come.

The question is this: will you make sure it is a win-win scenario for your firm, your shareholders and your clients?  Also, how do you balance this aim with a growing apathy among social media users who feel inundated and see these ads as an intrusion on their?  That is, the ones who have not already migrated to Ello.

Tune in for part two of this blog post when we discuss the best way to benefit from these social media marketing opportunities.  The bottom line though is if your social media strategy does not already include a monthly budget for social advertising, you’re missing the party.