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Why it’s never been harder to be seen on social networks (and what to do about it: Hint, buy ads)

February 2, 2015 11:27 AM
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Despite having nearly 1.9 million Facebook followers, youth-oriented retailer Charlotte Russe Inc. hasn’t been getting as much traction on the social network as it used to.

Only a tiny sliver of the retailer’s followers, as little as 1% at times, actually sees the brand’s posts. And that’s making it more difficult to market to consumers via Facebook—particularly because, as of December, the only form of advertising the retailer had done on Facebook is retargeting via Facebook Exchange, the social network’s ad bidding network—says Kristen Strickler, the merchant’s social media and public relations manager.

Still, the retailer has managed to drive 2.71% of its site traffic from Facebook, down only slightly from 2.92% a year earlier. But getting those clicks has required the retailer to devote a lot more time and resources examining the best times to post and the types of messages that generate high engagement rates, which is one of the signals Facebook’s algorithm uses to extend a post’s reach, she says. But that effort only goes so far. “There’s no doubt about it, Facebook is a real challenge,” she says.

And it’s getting even tougher. The social network last month changed its news feed algorithm, which determines what consumers see in their news feeds, to minimize the number of consumers who see a brand’s organic posts if Facebook deems them too promotional, such as posts urging consumers to buy a product, install an app or enter a sweepstakes (the change won’t impact ads). The move was the latest in a series of steps that Facebook has taken to reduce the number of non-paid brand posts consumers see in their news feed, a strategy that implicitly pushes retailers to buy ads if they want to market to Facebook users.

The percentage of shoppers who see a brand’s typical non-paid Facebook post is roughly half what it was a little more than a year ago, according to the Adobe Digital Index, which is based on data gathered from thousands of Adobe Systems Inc.’s retail clients. Put another way, while 12.05% of a brand’s fans saw a brand’s post in October 2013, that percentage fell to 6.15% just four months later, according to marketing and public relations firm Ogilvy & Mather. And the effect is particularly pronounced for brands with more than 500,000 followers: A single post will be seen by only 2.11% of followers (see chart on page 27). In an average month, a brand will only reach 25% of its fan base via organic posts, according to a report by social media analytics vendor Socialbakers.

There’s just one surefire way to counteract those trends: Buy ads. The move to a pay-to-play model is a marked change from just three or four years ago when the social network urged marketers to build communities by acquiring followers on its platform. Now the social network says that retailers like Charlotte Russe need to advertise if they want shoppers to see their promotional messages. “The paid products we’ve put out are really the way to run campaigns at scale,” says Nicolas Franchet, the social network’s head of retail, e-commerce, global vertical marketing.

It isn’t just on Facebook that retailers feel the need to pay to ensure shoppers see their messages. While Twitter presents every tweet from all the people and brands a user follows, tweets have an extremely short life span; a tweet’s half-life—that is, when half of a link’s total clicks occur—is 24 minutes, according to social media analytics firm Wisemetrics. So if a consumer doesn’t interact with a brand’s message shortly after it’s posted, chances are, he probably never will. Marketers are finding similar situations on Pinterest, Instagram, Tumblr and even the shopping-focused, advertising-supported Polyvore.

Many retailers feel that they have little choice but to pay to market to social media users. Those methods include paying to promote posts they think will lead their followers to click and buy as well as diverting their marketing budgets to the growing number of ad units offered by social networks, including an array of tools that encourage shoppers to click to a merchant’s site, download an app or take other actions. That helps explain why the 42 retailers in Internet Retailer’s new 2015 Social Media 500 who shared their social media spending collectively increased their budgets 145.2% last year. That increased spending continued during the holiday season. During the five-day Thanksgiving weekend, for example, social media advertising firm Nanigans’ retail clients boosted their Facebook mobile ad budgets 132% compared to the same period a year earlier. There was an upside to that spending: Marketers’ Cyber Monday ads produced a 286% return on ad spend, Nanigans says.

Kohl’s Corp. was among the retailers that invested heavily on social network ads during the holiday season, particularly on Twitter, and social media monitoring firms say it was one of the merchants that had the greatest success at the start of the holiday season. (The retailer declined to disclose its spending, but says that social media marketing has become a “major component in its marketing mix” over the past year.)

The week of Thanksgiving the multichannel mass merchant launched a Twitter trivia contest using a mix of paid and organic tweets to acquire new customers and engage its existing followers. Kohl’s tweeted out trivia questions to followers and those who answered correctly using the hashtags #BlackFriday and #KohlsSweeps were entered for a chance to win a $500 gift card. By requiring entrants to include both Black Friday and its brand as hashtags to enter, the retailer was able to piggyback on the already trending #BlackFriday hashtag, while also garnering 102,262 tweets that included the #KohlsSweeps hashtag, according to customer experience software vendor Clarabridge. Another analysis, by social media analytics firm Simply Measured Inc., found that Kohl’s received 64% of mentions of all “top retail brands” during Thanksgiving and Black Friday. The retailer says its total engagements—that is, consumers’ total Twitter interactions with the brand’s posts such as retweets and replies—during Thanksgiving week were up roughly 400% compared to the same week a year earlier and up nearly 2000% on Black Friday.

Key to sparking the campaign was the retailer’s mix of paid and organic tweets, which helped ensure Kohl’s messages reached potential customers, says Bevin Bailis, senior vice president, communications and public relations, who oversees Kohl’s social media strategy.

“There are thousands of conversations taking place throughout the day, but by mixing paid and organic messages we’re able to reach the right people,” she says. She was referring to Twitter’s targeting capabilities, which enabled Kohl’s to target consumers in a variety of ways, including aiming ads at shoppers based on information that they share off the platform, such as their e-mail addresses. Kohl’s then targeted those existing customers via the social network’s Tailored Audiences tool and found consumers who have similar traits to the retailer’s customers, such as age, gender, location and interests.

“Twitter gives us the ability to personalize paid media to make sure that we’re getting the right message to the right audience,” she says. That’s helping the brand reach new shoppers, a portion of whom will likely click to Kohls.com, Bailis says.

“There are a lot of people in their late teens and 20s who digest information in a completely digital way,” she says. “The only way we can reach them is by understanding where they’re looking—social networks like Twitter—and investing an appropriate amount to talk to them there.”

That’s particularly important for Kohl’s, which has spent the past year focused on expanding its customer base. For example, the retailer earlier in the year ran a “Sing Your Heart Out” contest in which it asked consumers to submit videos of themselves singing “Let It Go” from the Disney film “Frozen.” Kohl’s received roughly 4,000 videos.

While the videos spread across Facebook and Twitter on their own as consumers shared them with their social media contacts, Kohl’s also used Twitter’s Promoted Videos ad unit to present video ads containing some of the submitted clips to dads who had previously tweeted about “Frozen.” The idea, Bailis says, was to establish Kohl’s as the spot to find “Frozen” merchandise. “We wanted to tap into a new conversation,” she says.

Kohl’s uses social networks’ ads in concert with other channels, including broadcast TV and its weekly newspaper circulars. For instance, the retailer ran four commercials during the American Music Awards show featuring contestants from the “Sing Your Heart Out” campaign.

“Social allows us to amplify our other efforts,” she says. “The reason we invest in social is to build engagement. We’re trying to show potential customers that it’s a new day at Kohl’s.”

Of course, a campaign like the one Kohl’s rolled out during the holidays only works because it reached out to shoppers on the web sites where they’re already spending time.

And a lot of shoppers are spending a lot of time on social media. For example, more than 100 million U.S. consumers, roughly 31% of the entire U.S. population, look at Facebook every day on a mobile device. The daily U.S. and Canadian usage numbers rise to 155 million, nearly half of the U.S. population, if you include desktop users. At the same time, reaching consumers via other channels, like TV, is increasingly difficult, as even a top-rated show like “NCIS” might only attract 14 or 15 million viewers, which is about 9% of all the U.S. consumers watching TV at that time. And while advertisers have only a general idea of who is watching a TV show, they have a clear sense of who they’re aiming digital ads at.

That helps explain why Jennifer Kasper, Macy’s Inc.’s global vice president of digital media and multicultural marketing, says the chain retailer has spent the past year increasing the time and resources it devotes to social media marketing. And it’s why Macy’s used Facebook’s video ads on Thanksgiving to launch a major Facebook ad campaign: Every woman in the United States who is 21 or older and looked at Facebook that Thursday saw a video ad that aimed to capture the “magic and spirit” of the retailer’s holiday promotions.

“The campaign leveraged and extended the reach of our Black Friday television advertising,” she says.

The retailer built on that campaign by delivering new video ads—and other Facebook ads—to those shoppers who interacted with the initial video by commenting on it, sharing it or Liking it. The follow-up ads, which appeared throughout the following three days, showcased the retailer’s Thanksgiving weekend sales.

While Macy’s had one of the broadest holiday ad campaigns on Facebook, it was hardly alone in leveraging the social network’s ad units—particularly video ads—and their unique targeting capabilities. For example, Vistaprint Ltd., ran a video ad campaign that showed consumers that they can use its platform to create holiday cards.

Facebook video ads, which officially launched in March 2014, have become a big business for the social network. Facebook registers roughly 1 billion video views a day (not all are ads)—65% of them on mobile devices. Video is growing quickly—the number of video views grew 50% between May and July—says Facebook’s Franchet.

That’s a reflection of the social network’s efforts to make the ad unit an effective tool for marketers, he says. For example, Facebook in June began letting marketers place a call to action at the end of a video that shoppers can click to learn more about a product or visit a web site or page. Advertisers can also use the same targeting tools they use for the social network’s other ad units. They include Custom Audience, which lets advertisers use such information as e-mail addresses that shoppers provide them off of Facebook to target ads on the social network, and the Lookalike Audience tool that lets marketers target ads at consumers who share similar traits to its Custom Audience segments.

Vistaprint’s video ad campaign, for instance, leveraged Lookalike Audience to attract new customers who are similar to those who bought holiday cards last year. The video ad featured a mother and father attempting to gather their dog and two young children together for a family photo for their holiday card. With the tagline “holiday photos can be exhausting, but holiday cards don’t have to be,” the ad closed with a Facebook-specific promo code. Nearly 180,000 consumers saw the video.

Vistaprint says its video ad worked—in terms of driving traffic to its site (it declined to share details) because it conveyed emotion. That continued an approach it took throughout the year, which helped it boost the traffic it receives from social networks from an Internet Retailer-estimated 3.67% of online visits to an estimated 4.28%, according to the Social Media 500.

Plenty of other merchants are looking for effective ways to drive shoppers to buy. And the social networks understand that, which is why they’ve spent the last year or so reshaping their ad units to focus on direct response marketing.

Twitter, for example, over the past year focused on offering marketers an advertising vehicle that provides quantifiable results. For example, Twitter took a page from Facebook by offering Tailored Audiences and “Look-Alike” targeting, while also moving away from its previous pay-per-engagement payment model to a system that lets an advertiser set a goal and pay when the campaign meets that objective. For example, a retailer can select as a goal that consumers download the retailer’s app or click through an ad to the Black Friday sale page on the retailer’s web site. The retailer would then pay only when a shopper downloads the app or clicks through to the web site.

The net result is a platform that encourages marketers to pay to reach their customers, whether it’s to encourage them to click and buy or to take another action, such as installing a mobile app, while also giving marketers a guarantee that they will only pay for results they want. “We’ve built our business over the past year on finding ways to help brands connect with consumers in relevant brand moments,” says J.J. Hirschle, Twitter’s director of retail.

Similarly, Pinterest last month began letting all marketers buy its first ad unit, which it calls Promoted Posts. The ads are native advertising—in which marketers pay to promote products in posts that appear much like other posts that the platform’s users see. During its eight-month testing period, the social network’s Promoted Posts tests performed just as well, and occasionally better, than organic pins. For example, brands involved in the tests had a roughly 30% jump in earned media—that is, users who saw a Promoted Pin who then saved that pin to one of their boards—from their campaigns. Organic pins are repinned an average of 11 times, and Promoted Pins had the same, and sometimes better, engagement rates.

And as more consumers shift to browsing the web on their mobile devices—a typical U.S. adult spends 34 hours and 17 minutes a month on the Internet on a smartphone compared to 27 hours and 3 minutes on a computer, according to the Nielsen Co.—the social networks have leveraged their ability to link together a consumer’s desktop and mobile actions to get a better picture of each shopper.

Because each user of a social network is logged on, social networks have a distinct advantage on mobile compared with other web sites that host ads because the cookie-based tracking methods marketers are accustomed to using on the web don’t work particularly well to track the activity of mobile consumers. A single cookie can’t track a consumer’s actions as he moves between his mobile browser and an app, nor can it link a consumer’s actions on a desktop computer to his actions on a tablet or smartphone. But the social networks know who its users are. And that enables marketers to target the kind of consumers they want to reach—such as suburban women under 40—regardless of the device the consumer is using.

And, given that about 20% of the time U.S. consumers spend on their mobile devices is on Facebook, there are ample opportunities for marketers to target consumers on their mobile devices, Facebook’s Franchet says. “We offer an enormous opportunity to do things at scale,” he says.

The social networks’ shifts to direct response marketing has made for better, more effective advertising opportunities, says Julia Hass, Kohl’s social marketing manager. “The social networks—Twitter and Facebook in particular—have become more advanced in their ad targeting and ad capabilities, and that’s making them better places to advertise,” she says.

Their effectiveness, however, makes them more appealing to marketers like Hass—and growing demand makes them more expensive places to advertise. For example, the aggregate average cost per thousand impressions on Facebook was seven times higher in November 2014 than it was in November 2013, according to predictive marketing software vendor Kenshoo Ltd. At the same time, the shift to more direct response ad units helped Kenshoo retail clients produce a return on investment nearly two times their 2013 rate.

While the vast majority of retailers’ direct response ads to date have focused on driving shoppers to retailers’ sites, there’s another move afoot across several social networks—Facebook, Twitter, Tumblr and the shopping-focused Wanelo—to make e-commerce a focal point of their platforms.

Those four social networks each added a Buy button to their sites in the second half of 2014, with slight differences in their approaches. Facebook was first, when it announced in July a test of a Buy button that enables advertisers to add the button to their ads and promoted page posts to let Facebook users buy a product directly from the merchant without leaving the social network. Twitter in September announced a similar test that lets retailers, nonprofits and musical artists add a Buy button to their tweets, which they can then pay to promote.

Meanwhile, Wanelo and Tumblr each take a slightly different tack. Wanelo’s Buy on Wanelo button lets a shopper buy on the social network. But rather than make it a general advertising vehicle, the social network operates as an affiliate and collects a 10% to 15% commission on sales that stem from the button. And Tumblr’s button, which also take the form of a Borrow, Pledge or Do Something button, automatically appears when its users post links from four sites—online marketplace Etsy, online art curation site Artsy, fundraising site Kickstarter and volunteering organization Do Something. When a consumer clicks the button it takes him back to the original page—or the users can choose to have Tumblr e-mail them reminders to take the action later. That e-mail option makes the button distinct from the other Buy buttons.

So far, only Wanelo has shared data that suggest its button is working. The social network says it found in early tests of Buy on Wanelo that the conversion rate for shoppers who bought within the app was about three times that of those who clicked to a retailer’s site. Those results make sense because 90% of its traffic is mobile and the key to driving mobile sales is making it easy for shoppers to buy, says Wanelo’s founder and CEO Deena Varshavskaya.

“Many retailers aren’t even optimized for mobile, and even those who are often don’t have a satisfying experience,” she says. “Just the act of sending someone to a mobile site from the app creates a barrier that might keep someone from buying. Wanelo eliminates that friction.”

The buttons—at least those on Facebook and Twitter—likely aren’t geared to the largest advertisers, says Melanie Taylor, head of Ogilvy & Mather’s Social@Ogilvy West division, but at small- and midsized merchants that sell products that shoppers understand and don’t need to read reviews about. For example, a retailer like Gilt Groupe Inc., she says, could feature a pair of Prada heels in a promoted post with a Buy button along with a note that the shoes are on sale and only a click away. “That feels like a good experience,” she says. But, at the same time, both Facebook’s Franchet and Twitter’s Hirschle say their buttons are tests that are still in progress.

Much is still in the testing phase, as the social networks seek to convert their big user bases into revenue, and retailers and brands experiment with the new ad units they’re offering. But evidence is accumulating about what works and what doesn’t. Retailers like Kohl’s and Vistaprint, for example, are finding that by using the right tools a retailer can produce significant results, while others like Charlotte Russe are finding their posts lost in the shuffle. And that’s why Charlotte Russe’s Strickler says she can’t help but think she might need to start making some Facebook ad buys.

zak@verticalwebmedia.com
@ZakStamborIR

 

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