The thing that we often forget about social media marketing campaigns is that these new approaches are accomplishing even more than traditional advertising, but at a fraction of the cost. The bottom line is that these campaigns are cheaper and more effective! What’s not to love?!
Consumers don’t want to be bombarded with ads – that model has lost credibility. There’s too much to weed through, consumers can easily tune out ad messaging, and no one believes advertising anyway. Furthermore, word of mouth messaging is much more influential when consumers are making decisions about what they buy. According to Justin Kirby and Paul Marsden in their book Connected Marketing, 92% of Americans prefer to get their product information by word of mouth, and 76% say that word of mouth is the number one factor in making purchasing decisions.
Check out these statistics regarding ROI in advertising – you’ll see why companies have turned to a cheaper, more effective method of generating buzz about their products.
- 18%: Proportion of TV advertising campaigns generating positive ROI
- 54 cents: Average return in sales for every $1 spent on advertising
- 256%: The increase in TV advertising costs (CPM) in the past decade
- 84%: Proportion of B2B marketing campaigns resulting in falling campaigns
- 100%: The increase needed in advertising spent to add 1 – 2% in sales
- 14%: Proportion of people who tryst advertising information
- 90%: Proportion of people who can skip TV ads who do skip TV ads
- 80%: Market share of video recorders with ad skipping technology in 2008
- 95%: The failure rate of new product introductions
- 117: The number of prime TV spots in 2002 needed to reach 80% of the adult population – up from just 3 in 1965
- 3000: Number of advertising messages people are exposed to per day
- 56%: Proportion of people who avoid buying products from companies who they think advertise too much
- 65%: Proportion of people who believe that they are constantly bombarded with too much advertising
- 69%: Proportion of people interested in technology or devices that would enable them to skip or block advertising*
These numbers say only one thing: companies with products to promote needed to find new solutions to their marketing problems. Advertising just isn’t accomplishing its goals as effectively as even ten years ago. While the repercussions of this shift in the marketing/advertising model have absolutely turned the ad agency industry on its head, it has indeed forced companies and agencies alike to be more creative and resourceful in their solutions. These new solutions both save companies money on marketing budgets, and more buzz and more sales. So, while companies need to adapt their approach to marketing, agencies need to adapt as well, in order to provide marketing solutions that utilize new media to its fullest extent.
* source: Justin Kirby and Paul Marsden, Connected Marketing: Viral, and Word Mouth Revolution (Oxford: Elsevier, 2006), xix