Social media advertising on sites like Facebook and Twitter is still evolving and competition is fierce. As more social media advertising options are launched, prices for ad space drop. Social media sites are moving from a premium-priced, small quantity of ads model to a lower-priced, large quantity of ads model.
This week, a few key stories made the news about social media advertising that create a clearer picture of what’s coming for brands that want to invest in social media advertising in the short- or long-term.
Organic Reach on Brand Facebook Pages Plummets
First, Cotton Delo of Ad Age reported that a new study from Social@Ogilvy found that organic reach of content published on brand Facebook Pages is dropping quickly and steadily. Delo reports that the average reach of organic posts that brands publish on their Facebook Pages, which are not supported by any type of advertising investment, is half of what it was in October 2013 (down from 12.05% in October 2013 to just 6.15% in February 2014). Note that in 2012, Facebook stated publicly that average organic post reach was 16%.
What’s causing the rapid decline? Speed and clutter could be the biggest factors according to the Social@Ogilvy report. News feeds move very quickly with a massive amount of content published by huge numbers of people. That means Facebook users can’t keep up with all of that content and non-ad-supported posts get lost. The report warns brand marketers to prepare for a time when organic reach on Facebook will be zero—a sentiment that Facebook supports. Delo shares a point made in a Facebook presentation given at last year’s fMC event in New York where Facebook warned brands to look at Page fans as, “a way to make paid advertising more effective, as opposed to a free distribution channel.”
Twitter Ad Rates Plummet
Another social media site seeing a drop in a key ad revenue metric is Twitter. According to Arif Durrani of Campaign, Twitter is attracting more ad buyers and ad revenues grew by 110% in 2013, but ad rates plummeted by 67% in 2013. Looking back a bit further, ad rates were down by 81% from 2012.
Twitter offers more advertising inventory for ad buyers, but in keeping with the laws of supply and demand, all of that added inventory brings prices down. Twitter explains the positive aspect of this decline in prices as providing lower cost advertising options, such as Promoted Products, which attract small businesses, international advertisers, and advertisers with smaller budgets to Twitter.
Tumblr Looks to Expand Sponsored Posts
Since Tumblr was acquired by Yahoo! last year, it was only a matter of time until the site that once boasted it was against monetizing through ads would roll out a full-scale monetization process, including ads. The monetization has begun and this week, the Wall Street Journal reported that Yahoo! plans to take those efforts to the next step by setting up an ad network that would distribute sponsored posts to third party sites. The first stop on the sponsored posts distribution train would be other Yahoo! sites and other sites that Yahoo! owns with expansion to third-party sites as the next logical expansion.
According to Harrison Weber of Venture Beat, Tumblr might also roll out an ad exchange were advertisers can target audiences using demographic data, similar to Facebook advertising offerings.
One thing is certain, social media advertising will keep changing. Brand marketers need to view social media advertising as a single tactic within their social media marketing and content marketing strategies. Test, analyze, modify, and test again until you find the right marketing mix to drive the results your business needs.
Image: Wagner Magni
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