Why social media marketing is failing to impress in the boardroom
Finding metrics to convince the C-suite about the tangible value of marketing activities can be an arduous task. Anil Malhotra unpacks why purchase behavior targeting is one of the most compelling and effective tools for marketing on social media.
You’re presenting everything, so why does it feel like you’re saying nothing?
Social media marketing. It’s not short of metrics. From click-through rates to conversions, engagement rates to shares. Then there are likes, retweets, applauses, pins, potentials… the list is endless.
And marketers might be tempted to use them all. The more you can show, the more you can justify your marketing activities and prove your success, right? Well, no.
In fact, presenting board members with all these meaningless social media metrics is not only failing to impress, it’s actually making the C-suite question the effectiveness of digital marketing in general.
Let me explain why.
Likes, shares and engagement rates don’t matter to the board
You can argue that a like is valuable. That you can explain to your CEO that high engagement equals interest in the brand, you could even try to convince them that a retweet is akin to free promotion, but at the end of the day if your activity isn’t bringing in paying customers, then the board simply doesn’t care. And the research shows it.
In the Bango ‘Board to Death’ survey of 200 CEOs, 65 percent said that they aren’t interested in hearing about likes. 76 percent said they don’t care about retweets and 66 percent said they’re not interested in impressions.
Overall, 59 percent of CEOs believe that digital marketing metrics that aren’t associated with sales are meaningless to them, while 62 percent feel that too much marketing budget is wasted on activities that don’t deliver meaningful results.
And the thing is, they’re not wrong. You could try and justify your social media activity spend with all the metrics you want, but unless your marketing is making a tangible impact on the bottom line, the board is (quite rightly) going to see it as wasted budget.
Why are social media ads failing?
In 2020, Australian digital marketers spent a mind-blowing $2.5 billion on social media advertising. Those who invested in social campaigns were likely seduced by the amount of data at their fingertips, with popular platforms like Facebook allowing advertisers to target campaigns towards people based on their age, gender, job, likes and even search terms.
It feels like there is a real, measurable, accountable process going on here. But in reality, what people like on socials and even what they search for is not a big enough indicator of what they will actually spend their money on. Anyone can search for #FiveStarHotels but most people will never actually book the vacation, no matter how many times they ‘like’ your resort.
The harsh truth is that social campaigns based on behavioral targeting are largely guesswork, and CEOs are not willing to roll the dice on them any longer. In fact, 60 percent of CEOs believe that the marketing potential of social media has been exaggerated and 22 percent even go as far as saying that social media marketing or digital advertising would be the very first things they cut from their budgets.
But this doesn’t mean that marketers should give up on social media marketing altogether. Social media campaigns are a good idea – they’ve just been poorly executed. And if marketers can prove that their activities are more directly targeted towards those who buy, 71 percent of CEOs say that they would increase their marketing departments’ budgets.
But with conversion rates on major platforms like Facebook (9 percent), Instagram (1 percent) and Twitter (0.5 percent) not even reaching double figures, the question is how can digital marketers make sure their efforts are driving increased revenue?
Three words: purchase behavior targeting.
What is purchase behavior targeting?
Purchase behavior targeting is one of the best kept secrets for effective marketing on social media. Rather than selecting a campaign audience from the standard dropdown menu of likes, interests and demographics, the ‘purchase behavior’ option allows marketers to target campaigns directly at the people who are most likely to buy. Targeting is no longer based on assumption but on proof.
The power of purchase behavior targeting is vastly enhanced by applying third-party purchase data from outside of Facebook. The latest marketing tech is able to analyse payment information from billions of dollars of consumer spending across multiple purchase channels. These tools give marketers valuable insight into the buying behavior of hundreds of millions of users.
This lets marketers target campaigns at people who have bought similar products in the past and are therefore more likely to buy them again. And when people pay for your product, marketing proves itself to the board.
What does this mean for the future of social media marketing?
Facebook has been offering purchase behavior targeting to its clients for years, but as it relies solely on its own first-party payment data to inform the segmentation, this way of targeting campaigns never really took off.
Now that payments providers are entering the world of big data marketing, purchase behaviour targeting is only set to grow in popularity and accuracy.
With this growth, marketers can expect to get see more value for money from their social media ad campaigns and can begin to show a positive return on investment to stakeholders – music to the ears of the C-suite.
Anil Malhotra is the CMO of big data marketing company Bango.