CEOs are Rapidly Losing Faith in Digital Marketing, Frustrated by ‘Meaningless Metrics’
In 2020, digital marketers spent over £85 billion on social media advertising. However, while many CEO’s buy into the premise (and promise) of social media ad campaigns, it’s because they expect campaigns to deliver purchases, not clicks.
In 2020, digital marketers spent over £85 billion on social media advertising. And when you look at some of the stats surrounding social media, you can see why. Research by Global WebIndex shows that 53.6% of the world's population uses social media and that the average daily usage is 2 hours and 25 minutes. Moreover, according to Survey Monkey, as many as 51% of users admit to having clicked on an ad while browsing on Facebook.
Who wouldn’t want to capitalize on this opportunity? However, dig a bit deeper and do we really know what those clicks mean? In short, no.
In fact, our ‘Board to Death’ research report found that 66% of CEO’s aren’t impressed with social media likes and impressions. So, when the board fundamentally cares about sales and revenue growth, the obvious question is: do social media ad campaigns deliver? Or do they just generate self-validating results, disguised behind a haze of “meaningless metrics” that aren’t relevant to the board?
The Social Media Disconnect
Social media marketing is almost entirely based on demographic profiling and, more recently, some element of behavioral targeting. Social media companies use data sourced from their own platforms combined with data from third-party providers, such as websites or other apps, to create targeting ‘packages’ that marketers can use to build and inform their campaigns.
As Facebook, Google and the other tech behemoths have hoovered up ever more data, marketers have become increasingly convinced that what people look for, like and share is an accurate reflection of what they will buy.
But stop to think about this for a moment, and it’s quite easy to see the flaws in this theory. First, what people search for — and even what they like — on social media is not always representative of what they want to buy. Secondly, by using demographic profiling, marketers risk generalizing potential customers into categories that are irrelevant to them.
These are significant problems. Essentially the CEO’s budget is funding campaigns that target casual browsers, not committed buyers.
Still not convinced? A good way to know if your digital marketing campaigns are working is to simply…switch them off. For example, P&G spend approximately $200 million in digital advertising a year. Yet when they switched off their digital advertising in 2018 nothing happened to sales.
The same can be said for Uber, who saw no difference in app downloads when they turned off their $120 million digital ad spend that was meant to directly drive app downloads.
It’s no wonder that 69% of UK CEOs say they would increase their marketing departments’ budgets if the activities could be more directly targeted towards those who buy. Digital marketers need to wake up and focus on using data that shows real intent to pay.
Enter Purchase Behavior Targeting.
What is Purchase Behavior Targeting?
Purchase behavior targeting is an emerging social media advertising tool that enables marketers to target campaigns directly at the people who are most likely to buy.
Premiered by Facebook, purchase behavior targeting allows digital marketers to have insight into who is spending their money on what, enabling them to focus their campaigns at these target customers through a variety of social media platforms.
Essentially, it analyzes purchase data to identify patterns of buying behavior. Instead of investing in advertising that will hopefully reach an interested audience, who in turn might buy your product, you can spend your money targeting people who have bought something similar before and are likely to do so again.
So, where can digital marketers go to acquire the level of payments insights needed for effective purchase behavior targeting?
The Next Big Data Brands
Rather than relying on Facebook or Google to provide this data, digital marketers are now turning to payment companies to provide reliable sources of online transaction data.
Companies like Bango — which processes online payments worldwide — are rapidly moving into the big data marketing space. By analyzing payment information from billions of pounds of consumer spending, these payment companies can provide valuable insight into the buying behavior across hundreds of millions of users.
Marketers can then use these insights to build more relevant campaigns, targeting users who are most likely to buy their product or service. That’s all it takes.
Purchase behavior targeting is the simplest way to acquire a profitable customer base, build revenue, and justify social spend to the board.
This methodology is also incredibly scalable, and as it continues to grow, marketers can expect to get better value for money from social media ad campaigns and present a positive return of investment to the board. Meanwhile, social media users can receive better focused offers and ads, not just based on what they like and share, but on what they buy.