Is Advertising effective in social media?

We live in a world today that is becoming more and more technological advanced and we are starting to stray away from traditional things such as FM radios and print newspapers, with the invention of XM radio and digital newspapers. Radio and newspaper was a big way companies used to advertise but now as they start to become less popular companies need to find a place to advertise that is becoming popular and those are social media sites. Social media sites are becoming ever increasingly popular with 62% of adults using social media sites (Pring). Companies are using sites like these to create a buzz that reaches a wide variety of people. There are many social media sites such as Facebook, Twitter, and YouTube just to name a few. If you use a social media site you know that there are advertisements on the site but just how effective are these advertisements? In this blog you will find out the answer to this question.

Pinterest

Pinterest is the latest in social media having only been around since 2010, it is relatively new. It is however gaining a lot of popularity especially with woman who make up 60% of the Pinterest population (Pring). Pinterest is different because companies do not actually create advertisements on the site. They instead generate buzz by people "pinning" pictures of their products. Companies put pictures of their products up onto a board for people to view. Once they put the pictures up other people can comment, like, or repin that picture by doing this even more people see the picture and it creates a giant snowball effect. With over 18.7 million people visiting the site in one month this creates a lot of exposure for a company’s product. Also if someone sees a picture of a product that they like they are more than likely to go to that company’s website. This is great for companies because it is getting people to learn about their company for free (Vega, Tanzina). People are buying products that they learn about from Pinterest, "Pinterest is projected to account for 40% of social media driven purchases by Q2 2012" (Pring). Pinterest may be one of the most effective social media sites to advertise on and it is free and still up and coming.

Pandora

There are two different types of advertisements on Pandora. There are the advertisements which are pushed upon you and are unavoidable these are the ones that pop up after skipping a certain amount of songs that you have to listen to. Then there are the pull advertisements which require the user to interact with the ad by clicking on it to see what it is about (Friends). Both are effective because the user will see both of them but the push advertisements are more effective.  This is because it forces the user to listen to what the company has to say and see what they have to show. Pandora is different from sites such as Facebook, and Pinterest because the advertisements are paid for by the company and that generates revenue for Pandora. Traditional radio is becoming less and less popular with the introduction of Sirius and XM radio and Pandora radio. The difference though, is that Sirius and XM are commercial free so companies cannot advertise on them. This creates a problem because now less people are listening to the stations that companies are spending money on to advertise. Pandora however says that its "technology can cater to consumers with far greater precision than radio — it can pinpoint listeners by age and sex, ZIP code or even musical taste" (Vega, Ben). This means that companies will be able to advertise to their consumers more efficiently and will be able to spend their money more wisely. Pandora is also growing more and more popular in the last two years the amount of users has almost tripled. This means companies are constantly having more people to advertise to. William Feinstein owner of Planet Honda in Union, New Jersey said he gave up on radio and started advertising on Pandora because he realized with Pandora's zip code targeting he can advertise on one site versus five different radio stations. William Feinstein also has seen improved results with his website receiving quadruple the views it had before (Vega, Ben).

Facebook

Facebook is a social media site where advertising is very effective. The US has over 160 million people checking into Facebook each month. Companies advertise on Facebook by creating pages about their company and then they have people become a fan by liking their page. This is extremely effective because once you like the company’s page they tell you about their new products and upcoming sales which you see on your news feed. They get more people to like their page by having one person like the page and then it shows up on their friends news feeds that they like the page and more people like it because they think it is the "cool" thing to do. This is good for the company because it creates more impressions that the company gets. Just by creating a page on Facebook Starbucks has advertised to 5.6% of America. This is extremely effective because some companies spend millions of dollars on a 30 second commercial that may not even reach this many people and the commercial costs money every time it has to run (Sean). According to a study done by Arthur J. O'Connor 99.95% of how a stock changed was based on how the fan counts for the company changed. This shows just how effective Facebook can be in advertising because companies can make money just by getting likes on their page (Marritz).

Twitter

Twitter is another social media site that is rapidly becoming more and more popular and companies are starting to take advantage of it. Companies are making Twitter accounts to interact with their consumers. They talk about sales they are having, new products, or just ask for feedback from customers. The main reason to advertise on Twitter is because of promotions. On Twitter three things can be promoted those are accounts, tweets, and trends. Promoted accounts are accounts that companies pay to have show up on a person’s Twitter page, they appear under the “who to follow” section. Then there are the promoted Tweets which are Tweets that companies pay to have appear on peoples homepages. Finally the promoted trends are trends that a company pays for that appears under the “what’s trending” section (Raehsler).



If you look at the chart above it shows that a good percentage of people have seen promoted advertisements on Twitter that are relevant to them. Also majority of the people on Twitter have seen promoted Tweets or do not mind them, with only 14.9% saying that they are annoying or they don't notice them. From this information you can see that advertising on Twitter makes sense because 24.8% see promoted Tweets that are relevant to them and also people can follow companies on Twitter and then see everything that they are talking about and that is free (Fisher).

 

Youtube

The advertisements on YouTube are similar to the push advertisements on Pandora, where an advertisement will pop up before you watch a video. These advertisements are inescapable and the viewer must watch at least part of the ad before having the option to skip the rest. There are also the pull advertisements which are pop up ads that you can either exit out of them of click on them to interact with them. YouTube is very popular with over 137.6 million different viewers every month in the US alone (Pring). So it makes sense to advertise on here with so many different people going on to the site. Advertising on YouTube’s homepage is extremely effective. A study completed by Google and Compete found that people exposed to the advertisement are "4 times more likely to visit an advertisers site, search for the brand or watch the advertisers video on YouTube" (O'Neill). This just shows how powerful advertising on YouTube can be. This generates a lot of awareness for whatever company is advertising because if people are four times more likely to visit their website it creates a lot of exposure for a product or company.

Conclusion

After analyzing five different social media sites I think it is a safe assumption to say that advertising is very effective in social media. Advertising on social media is cheaper than advertising a commercial on television and in some instances it is free to advertise on a social media site. Social media sites are becoming more and more popular everyday with new people joining sites creating a wide variety of people for companies to advertise to, also as shown above advertising generates obvious results. With many companies seeing an increase in popularity amongst consumers. There are no downsides to advertising on social media sites as it is cost efficient, works, and provides many different options for companies.