“Earned media sources remain most credible. Trust in traditional paid advertising messages declines. Confidence in online and mobile advertising increases.” So reads the sub-heading of Nielson’s Global Online Consumer Survey 2012, which tracks the media forms that are most trusted and affect people’s decisions. The survey, comprised of more than 28,000 Internet respondents in 56 countries, found that the recommendations of friends are the leading purchase influencer (92% of those surveyed), followed by the recommendations of strangers online (70%).¹
The survey’s other big finding? The trustworthiness and influence of traditional media have suffered a precipitous decline since 2009. Trust in television (47%), magazine (47%) and newspaper ads (46%), confidence declined by 24%, 20% and 25%, respectively, between 2009 and 2011.¹
By contrast, digital media such as websites (58%), email (50%), search engine ads (40%), online video ads (36%), sponsored ads on social networks (36%), mobile display ads (33%) and banner ads (33%) are trending in the right direction. For example, trust in mobile display ads is up 61% since 2007, with online banner ads enjoying a 27% increase during the same timeframe.¹
So the world is going digital. Big deal, I already knew that.
Remembering that 92% of those surveyed are influenced to purchase by friends and family, read on….
“Many companies are already increasing their paid advertising activity on social networking sites, in part due to the high level of trust consumers place in friends’ recommendations and online opinions,” noted Randall Beard, global head, Advertiser Solutions at Nielsen.
Interestingly, a recent Nielsen analysis of 79 campaigns on Facebook over six months showed that, on average, social ads—those that are served to users who have friends that are fans of or have interacted with the advertised brand and prominently call the relationship out—generate a 55 percent greater lift in ad recall than non-social ads. “This is further evidence that brands should be watching this emerging ad channel closely as it continues to grow,” continued Beard.¹
This is why I’ve been so bullish about Facebook in the face (sorry) of a deluge of very practical reasons not to be. In short, I think most Facebook bashers are missing the point entirely.
I say most, not all. Just days after Facebook’s bungled IPO, when the rest of the world was out for Zuckerberg’s head, Needham analyst Laura Martin initiated coverage on the social network with a $40 price target and rated the shares a "buy," calling the company "an option on the world."²
Martin went on to say that Facebook's revenue-generating ability is only just starting. The company deserves a premium over Google because "the risk an investor takes in buying FB is lower than Google's at its IPO date." In her analysis she cites the average time spent on Facebook is 14 minutes per-share, nearly three times that of Google.com. "In terms of value, investors are buying FB at half the valuation of Google, but getting three times the minutes spent. In fact, the single Facebook.com site accounted for 14.6% of all time spent online...”²
IT’S THE CONTENT, STUPID
What Facebook has that nobody else does is over 900 million users socializing with friends, family and strangers by way of the social share. Traditional advertisers (like GM) aren’t calibrated to understand the sea-change brought about by increasing consumer adoption of the Internet, social media, and mobile devices. Thanks to these technologies, people (all of whom are consumers on some level) can easily share their thoughts, feelings, experiences and recommendations with friends, family, and yes, strangers (thanks to the exponential nature of social sharing). I think the official term is “frictionless sharing.”
Whatever the case, the point is that Facebook has given nearly 1 billion people a simple means by which they can communicate ideas and share content.
As the marketing world wakes up to this new reality, expect the term “content marketing” to be bandied about even more than it already is.
And where is all of this content going to be shared? A big chunk of it will occur on Facebook, like it or not. Content marketers, being marketers, will want to maximize the effectiveness of their content by micro-targeting their intended demographic(s). Happily, Facebook has the data. With every, like, share and recommendation flowing through Facebook, the social network’s ability to deliver the precision data marketers crave gets stronger.
This is why big media is upset with Facebook, and doing their level-best to trash it in the eyes of public opinion. Facebook has the data, but it’s not playing by the (old school) rules.
Why? Because Facebook has a better understanding of the direction this is all going, and they know that they can make more money in the end if they keep the glaring ads off its network and just keep encouraging us to be social.
Kirk Cheyfitz of FastCompany put it more succinctly: “Facebook will flourish, in other words, because it is the place where nearly a billion people currently share content that causes others to buy things. This is why Facebook is becoming a center of social commerce. This is why its value will grow exponentially based on its growing share of e-payments and the ad industry's growing reliance on the consumer data it houses.”
I couldn’t have said it better myself.
What’s the bottom line for marketers? Keep cranking out quality content your target audience finds useful, relevant, and ultimately sharable, and Facebook will do the rest.
For a price….
¹ Nielson, “Global Trust in Advertising and Brand Messages”
² The Street, “Facebook Flap Overblown -- Massive Growth Lies Ahead”
Info-Graphic Courtesy of Nielson