Are big social media platforms such as Facebook and Instagram really worth the vast amounts of money brands currently hand over to them? Greg Consiglio, CEO at Connectt, examines where mainstream social media has gone wrong in serving brands’ needs and how they’re consequently turning to new forms of privately owned and community-focussed social media.
On the face of it, the giants of social media appear to be ever closer in the quest for online advertising domination. Twitter and Facebook both recently published their second quarter results for 2019, and both showed substantial advertising revenue growth, with a year-on-year increase of 23% and 32% respectively. Further, recent figures from database company Statista revealed that in 2018, spending in the social media advertising segment amounted to $73.834mn globally.
While, for many this will come as confirmation that the status quo is not changing anytime soon, there are nonetheless reasons to doubt the longevity of the current incumbent platform’s primacy in the online advertising sector.
Brands continue to throw immense amounts of money at mainstream social media platforms but they have increasingly vented frustration with their shortcomings. Several companies have made headlines in recent months for stepping away from their commercial social media channels entirely. One of the more notable instances was cosmetics company Lush, who cited fatigue with having to continuously fight with algorithms to reach their audience as a key factor in their decision.
There is also a big question mark around the return on investment that traditional social media provides. A 2019 Sprout Social report indicates that measuring ROI in this space is one of the top hurdles for marketers and that only 63% say they frequently discuss social media metrics or ROI with executives.
It appears that upon closer inspection cracks are beginning to appear about the long-term future of mainstream social media and how it delivers on the promise of social engagement for brands.
In the eyes of many, social media platforms have betrayed the trust of their users. In the post-Cambridge Analytica era, consumers and brands alike are questioning whether social media channels behave in a way that represents their own brand – particularly when it comes to user data. While Nick Clegg may have said Facebook was ‘rocked to its very foundations’ the company is paying a record £4bn fine to settle privacy concerns with the US Federal Trade Commission (FTC), and at the same time announcing the launch of a new digital currency.
In addition, social media giants have further put advisers off by messing around with their algorithms and abandoning organic reach. Now, unless companies are willing to pay to play, they’re out the game. Not only do they now have to compete with other advertisers but they’re are also working around a seriously cluttered newsfeed.
This puts a strain in the relationship between social media platforms and advertisers – with the power only seemingly in one group rather than both. What happens next?
We predict an evolution in the relationship, rather than a divorce. While many are disgruntled, brands have not forgotten the promise that social platforms offered in their previous incarnations. There is a huge appetite among marketers for the stripped back, community-driven and personalised social media of yesteryear, it’s just that they can no longer rely on self-serving mainstream channels to provide this.
Consequently, what we are now seeing is a gravitation towards owned and operated, dedicated networks to reach targeted audiences. Organisations with cult followings like Sephora Beauty, Lego, Starbucks and Xbox, have all invested in their own nuanced brand communities with tremendous success. Meanwhile, lesser-known brands like Young Foodies and a financial advisory firm have teamed up to launch their own community to support small business owners at their most critical growth face – YF Funding. It’s time brands stop outsourcing an important asset – their social connections with their customers.
This approach comes with many advantages. Brand-owned communities give marketers a way to own and develop positive relationships with their most passionate audiences, away from the negative connotations of the social media giants. Without the pressures of having to cut-through noise from competitors or beat the algorithm, brands can focus on providing people with quality content, information and help and a two-way dialogue with customers can emerge. Further, brands no longer have to fret about the misuse of their data or the overregulation of their content from above, as they are now gifted with complete control.
Social media is always going to have a major role as a tool for advertisers and marketers to distribute content, but focus is shifting. There is, right now, an interrogation over whether vast networks that have dominated the landscape are still fit for purpose. Brands want to reclaim control and insight, and smaller communities where like minded customers, fans and audiences gather are emerging as an avenue to realise this.
By Greg Consiglio