Social Media’s Impact on Advertising

As we have discussed over the course of a few weeks, social media has transitioned the way we do marketing and the way we build public relations. The phenomenon is inevitable for any marketer, because the pace at which technology is changing and the number of platforms becoming popular with consumers is extravagant. Advertisers are smart in capitalizing on such fronts. Today, let’s discuss in-depth on how social media is playing a role in digital advertising.

It goes without saying, businesses need to think carefully who to target through their ads and then tactfully build brand profiles as word spreads on social media at astounding rates. Poor engagement or press can be costly to a business. Understanding the platform and then utilizing it to its max is beneficial to any business. Here is an example of how much Nike is spending on online advertisements:

Smart marketers are going to the extent of utilizing celebrities to endorse brands, which in return is adding followers to the site and helping boost sales. One such platform is Twitter. This social media platform is quite popular between athletes, celebrities and politicians. Seung-A Annie Jin and Joe Phua conducted a research examining how celebrities were leveraged by brand marketer to use Twitter and gain traction using electronic word-of-mouth (eWoM). According to Jin and Phua:

The most-followed Twitter accounts as of 2013 belong to pop stars, including Justin Bieber, Lady Gaga, and Katy Perry (each with more than 30 million followers), and other public figures, including President Barack Obama (27 million followers), talk show hosts Oprah Winfrey and Ellen De-Generes (17 million followers each), and soccer star Cristiano Ronaldo (16 million followers) (Twitter Counter 2013). The more followers one garners on Twitter, the greater perceived social influence one has…. Nike spent $2.4 billion on celebrity endorsements (Cendrowski 2012). Companies invest in celebrities to improve brand recognition and trustworthiness and to create positive attitudes or distinct personalities for the endorsed brand (McCracken 1989)” (Jin and Phua, 2014).

Following are a few pictures gathered from various social media platforms to demonstrate how celebrities are helping advertise brands:

Beyonce promotes Pepsi

Kim Kardashian promotes Sugarbearhair

Michael Jordan promotes Nike

Jennifer Lopez promotes Louis Vuitton

As we see from aforementioned research, since social media has unprecedented reach, businesses are steadily trusting it as an outlet for advertising and attracting consumers. Online advertising has a key advantage, as the communication is two-way compared to old fashioned advertising. Shrihari Sridhar, et al., denote:

“From a capabilities standpoint, online advertising’s reach is ubiquitous (and can even include an international audience), but from a pragmatic perspective, online advertising’s reach is limited by the volume of visits to the content-based website, or online search behavior. Moreover, because advertisers can track prior- and post impression online behaviors of their consumers, the target ability and relevance of an online ad is superior to their offline counterparts. Finally, behavioral targeting technologies enable firms to tailor online display advertisements to consumers on the basis of their past browsing history, and therefore such advertisements are used to build brand awareness” (Shrihari Sridhar, et al., 2016).

The group further shares the following description table and trends of various advertising channels being utilized by businesses:

The group notes, advertisers can track prior and post impression online activities of their shoppers, relevance could be superior to offline counterparts.

Let me share some videos so you see the relevance of social media on business advertising in this day and age. The following YouTube video illustrates how social media advertising works:

Moreover, the following YouTube video depicts the importance social media is bringing upon advertisements:

To sum it up, social media is an ever-advancing phenomenon with an assortment of functionalities that bring immense advantages to businesses if utilized properly. Companies need to be smart and understand this mammoth inside out. The internet provides infinite amount of detail via books, scholarly research, blogs, to name a few, on how to best use the various social media platforms. As a business, understanding your role and responsibilities will ensure feasible engagement with consumers and help boost sales via proper advertising.

References:

Jin, S. A., & Phua, J. (2014). Following Celebrities’ Tweets About Brands: The Impact of Twitter-Based Electronic Word-of-Mouth on Consumers’ Source Credibility Perception, Buying Intention, and Social Identification With Celebrities. Journal Of Advertising, 43(2), 181-195. doi:10.1080/00913367.2013.827606.

Sridhar, S., Germann, F., Kang, C., & Grewal, R. (2016). Relating Online, Regional, and National Advertising to Firm Value. Journal Of Marketing, 80(4), 39-55. doi:10.1509/jm.14.0231.