Editorial Articles

Facebook has enjoyed an extraordinary run of success over the past few months. Not only has it overtaken Google as the most popular website in the US, but its profits are expected to topple $1bn dollars for the first time by the end of this year. Given its increasingly powerful profile, revenue generating opportunities and continued international expansion are undoubtedly front of mind for the social network. At the recent Cannes Lions advertising festival, Mark Zuckerberg, Facebook’s CEO, told delegates that the company plans to boost its online presence across the globe over the next 12 months. But as an affiliate network, we have recently discovered, this is a tall order and Facebook and other social networks still have a way to go before they can demonstrate a clear return on investment for the brands advertising on their sites.

Advertising on Facebook – what the stats show
In June, we spoke to 2,000 consumers to gauge their opinions on the effectiveness of a range of online advertising formats and the ways that brands engage with them while they are browsing the web. The results were perhaps surprising given the continued rise in the popularity of social networks: according to the research, just three per cent of respondents considered adverts on personal social networks such as Facebook as useful in assisting their online purchasing decisions. Interestingly, this figure was even lower than last year when we conducted the same consumer poll. In 2009, we found that nine per cent of consumers were engaged by Facebook ads and were encouraged to click through to find out more. So, with engagement at a low point, why hasn’t anything changed in the last year and what can brands do to enhance relationships with their target audience on social networks?

Increasing consumer engagement on social networks
This low interaction suggests that adverts being used on Facebook and other social networks are not yet having the desired effect in terms of audience participation. Despite this, there is some encouragement for advertisers targeting social sites. Less than a fifth of the respondents we surveyed considered adverts an active interference to their online activity, suggesting they are open to the right kind of marketing and that there is still an opportunity for brands to improve the success of their online campaigns. Activity from the industry in this area is also encouraging. Last month the International Advertising Bureau (IAB) announced that it is introducing a social media measurement framework to bring greater clarity and consistency to monitoring social media activity in the UK. The IAB’s plans are being designed to help advertisers and agencies take on board the complexities of measuring social media, which in-turn will enable brands to have greater control over where they choose to invest their resources.

Affiliate marketing and the online consumer
The online world is a vibrant and growing one and brands are continually looking for ways to break through the noise to engage directly with their target consumer. While many companies have jumped on the bandwagon and invested time, money and effort in their social media campaigns, the key to success for brands is to ensure they are well equipped to respond to the consumer’s needs. Despite the growth and popularity of sites such as Facebook, merely maintaining a presence is not enough to engage and capture the consumer’s attention. Brands need to make sure they employ a wider and more focused marketing strategy and investing in an affiliate marketing campaign can be a successful and rewarding way to do this.

Affiliate marketing enables companies to spread their net widely and reach out to their target audience through multiple channels in a measurable and non-intrusive fashion. As part of any campaign, technology and tools need to be combined with proactive and tactical customer service. An effective strategy enables both advertisers and publishers to create tracking links through new channels with exciting new rich media options to drive traffic to a brand’s website. This way, adverts for all nature of sites from social networks to online forums, to blogs and price comparison websites can be developed to be more visually appealing and engaging for consumers.

Looking ahead
Companies need to remember that users logging on to social networks are there to network and not necessarily to shop. To be successful in this less traditional space, brands need to work harder to make sure they convey information which both captures their audience’s attention and also enhances the consumer’s overall online shopping experience. Brands need to invest the time to develop and maintain targeted and strategic campaigns, such as those employed through affiliate marketing, which are designed to closely match their target audience. Those who do will see returns in the form of conversions to sale from social networks while also experiencing a groundswell of brand loyalty and increased audience engagement.

The bottom line is that there is no ‘one size fits all’ approach to reaching consumers on social networks and what works for one company may well not be right for another. While more needs to be done to determine the advantages and pitfalls of using ads on Facebook and other social sites, it is undoubtedly a step in the right direction that the industry is standing up and taking notice that transparency and metrics are required. With this in mind, it will be interesting to see how marketing and advertising budgets shift once return on investment can be measured and compared to benchmark the success of advertising on social networking platforms.

* Research conducted in June 2010 with 2,000 respondents through Toluna, the online research panel provider.

Liane Dietrich
UK MD, Linkshare