Traditional advertising is becoming less effective in attracting and engaging potential customers. The same cannot be said about social media.
A recent study by the McCarthy Group suggests that 84 percent of millennials don’t trust traditional advertising. The study found that millennials trust products and services they discover on their own or are shared their friends on social media more than what they see in traditional advertisements.#Adidas has dropped tv advertising entirely and plans to grow by $4 billionClick To Tweet
Another evident effect of the decline in traditional advertising effectiveness is the drop in profits of ad agencies. 50 of UK’s top ad agencies have all seen a drop in their profit margins.
If that’s not enough evidence, here’s why you should spend your ad budget on social media:
Companies Shy Away From Ads
Earlier this year, multinational manufacturer Procter and Gamble decided to cut around $140M USD from their ad budget with further plans to cut a total of about $2 billion USD in the next 5 years.
P&G isn’t the only company cutting back on ad spend. Unilever also plans on triming its marketing spend. Although Unilever hasn’t disclosed the exact details of their cuts, the company is looking to double its savings in overhead and advertising by 2020.
In another related development, Adidas also earlier this year announced it was dropping tv advertising to focus on digital engagement. This decision was made in line with the company’s digital retail growth goal of $4 billion USD in 3 years.
They found that young consumers were engaging with their brand on mobile so it was best to channel resources to that medium.
“It’s clear that the younger consumer engages with us predominately over the mobile device,” said Chief Executive Kasper Rorsted in an interview with CNBC.
None of the above companies appear to have been affected by their ad spend cuts. P&G didn’t see any reduction in growth but rather a 12% increase in net income according to their latest earnings report.
Social Media Delivers Value to Brands
Whilst traditional advertising continues to struggle, social media is generating a great return on investment for brands.
Last year soccer star Cristiano Ronaldo generated $500M USD value for Nike through social media.
The Real Madrid striker has a combined following of over 300 million across Facebook, Twitter and Instagram. According to Hookit, Cristiano Ronaldo within the 12 month period posted 1,703 times about the brand which generated over 2.25 billion social interactions (likes, shares, comments, retweets, and video views).
Remember the famous Oscar selfie posted by Ellen DeGeneres? Guess what brand of smartphone the selfie was taken with?
— Ellen DeGeneres (@TheEllenShow) March 3, 2014
Samsung! Samsung initially bought five-and-a-half minutes of ad time at Oscars but it wasn’t that which left a long lasting impression even after the show ended. It was rather the selfie taken by Bradley Cooper with Ellen’s Samsung Galaxy Note 3 that gained the attention of the world.
The tweet in just 2 days gathered over 3 million retweets gaining it the title as the most retweeted tweet of all time until it was recently unseated. People speculated that Samsung paid Ellen for this campaign but the company claimed this huge exposure was completely unplanned.
The company in a statement said: “While we were a sponsor of the Oscars and had an integration with ABC, we were delighted to see Ellen organically incorporate the device into the selfie moment that had everyone talking. A great surprise for everyone, she captured something that nobody expected”.
Yesterday, Marvel released the full trailer of its most anticipated film “Black Panther”.
The trailer was posted on movie’s Facebook page and Marvel’s YouTube channel. In less than 24 hours the video garnered 14 million and 5 million views on the platforms, respectively.
All these instances goes on to show the ever growing importance of dedicating resources to social media.
It’s all uphill from here. Or downhill? I guess it depends on how you look at it.