Paid ads have historically targeted in-market consumers, but today's growing ad platforms are moving closer to passive consumers: the larger audience that are yet to make a purchase decision. 

Whilst Facebook user growth may not be at the levels of Pinterest or Tumblr, what is certain is that Facebook's advertising revenues continue to grow.

After all, an active monthly user base of 1.44bn as of March 2015 represents a fairly large proportion of the internal enabled world. Plus, revenues are looking healthy even if analysts were upset at Facebook missing expected Q1 earnings by $200M

At Lost My Name we're one of the countless advertisers playing the paid marketing game. We're comfortably spending six figures each month on Facebook and other ad platforms as we continue our global growth.

Paid search makes up a smaller percentage of our overall marketing mix; a growing trend in small and medium business land. For us, paid search advertising is predominantly capturing in-market consumers.

However, paid social (we need a better term than this - help!) is for us tapping into passive consumers. Those that are not being targeted by their buying intent, but their buying persona. Demographics, interests and other signals. And this is where we're seeing both volume and return.

Our challenge right now is this: how do you maximise in-market consumers (paid search’s bread and butter for example) vs passive consumers (those that may or may not be looking to buy but fit your target demographic)?

This isn't a new challenge, since TV and radio were effectively unaware of the consumer state. However digital has changed that dramatically. 

How far up the purchase funnel can we go to capture the sale as early and profitably as possible? What does the right blend look like across the purchase journey?

Finding the right paid marketing mix

I'm focusing on paid marketing as a point of interest as ad platforms are innovating immensely. Looking at the basics of how ad platforms operate, you’re given a choice of targeting options using some kind of creative format, with an amount you’re prepared to bid against a particular action.

That’s as simple as I can distill any form of paid advertising down to. Plus, eventually making more money than you’re spending at some point is nice.

Here’s an example using Adwords:

  • Targeting: includes keyword, location, device, age and gender (if using YouTube ads).

  • Creative format: includes text, text and image, image (moving into Google Display Network territory), video (moving into YouTube video ad territory).

  • Bidding: generally a fixed amount with ‘bid modifiers’ to increase or decrease bidding under certain conditions plus reach (GDN, YouTube).

  • Action: bidding is per click (direct action) or per thousand impressions (regardless of clicks).

 Here are some of the Facebook ads options:

  • Targeting: includes age, gender, location, interests, device and many others.

  • Creative format: includes static image, multiple images, and video.

  • Bidding: a fixed amount or an amount which Facebook decides is optimal against your ‘strategy’ such as conversions, downloads or leads or an amount based on reach and frequency not dissimilar to TV targeting.

  • Action: includes per conversion (sale or lead), per download, per click, per thousand impressions.

Here’s how Pinterest ads currently stack up:

  • Targeting: includes gender, location, language, keywords (terms) and device.

  • Creative format: includes static images with text and and video.

  • Bidding: a fixed amount.

  • Action: bidding is per click, per thousand impressions and now per action.

Not so dissimilar are they? Of course there are quite a few differences. For example the audience targeting options available in Facebook are by far much more advanced than Google Adwords or Pinterest, in particular because of the amount of data Facebook users willingly give up.

Google Adwords thrives on user-intent; that is, a search for the product you’re interested in or ready to buy. Their non-search products have fantastic reach for brand campaigns (e.g. YouTube ads and the Google Display Network) but generally don’t generate the positive returns seen via paid search.

Pinterest is still developing its targeting options and from what they’re working on, seem to be attempting to find a happy medium between active in-market consumers (via wishlist type pins and implied intent) and passive consumers (by growing their audience level targeting). Kind of a merge of Adwords and Facebook ads.

Other ad platforms like Twitter and Reddit are creating positive returns for businesses and yet others are still to take full revenue advantage of their user base like Instagram and WhatsApp.

Their goals are similar, to grab marketing dollars and push ads to consumers before they decide to buy whilst keeping those consumers engaged on those platforms.

It's a difficult blend for sites like Pinterest and Facebook which are destinations in their own right. Google's goal in contrast is to get you to your destination as fast as possible.

This creates a fine balance for social sites to monetise whilst retaining engagement. This is what a marketer needs to tap into, creating consumer value first and generating sales as the benefit.

Looking to the future

As the competition for consumer spend increasingly seeks out new and first mover advantage channels, the need for us as marketers to capture user attention before consumers even know they want to buy an item becomes a murky battlefield. 

Have you considered personalised neuro targeted ads? Sound crazy?

One wonders what wearable devices could bring to marketers when the Google Glass and Oculus Rifts of today becomes as normal and mainstream as mobile devices in the next few decades.

I was inspired years ago by a Martin Lindstrom talk around neuro-marketing and the triggers marketers can use to influence buying decisions.

He talked about how Mini changed the front grill of the Mini Cooper in the US to reflect the softer look their female demographic found more visually appealing. And how Coca Cola, used reinforced glass around the logo on their glass bottles to ensure that if the bottle shattered, their logo would remain visible.

Uncovering your brand appeal to consumers is the way forward to developing pre-consideration marketing in the emerging social ad platforms.

The future is now. React, learn and adapt or be left behind.

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Published 26 May, 2015 by Depesh Mandalia

Depesh Mandalia is a Growth Marketing specialist and contributor to Econsultancy. You can find him on Twitter (https://twitter.com/DepeshM) or LinkedIn (https://www.linkedin.com/in/depeshmandalia) .

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Comments (3)

Dela Quist

Dela Quist, Email Marketing Evangelist & CEO at Alchemy Worx Ltd - 100% Email Marketing

Isn't this something we used to call broadcast?

Sheryl Sandberg, Facebook’s COO distinguishes between demand fulfilment ads [direct response] - Google's speciality - and demand generation ads [brand advertising], which she sees as Facebook's strength. She cites TV ads as an example of the latter. You aren't asked to go and buy something immediately; rather you are introduced to new products and ideas. Most interestingly she says "Part of the challenge in moving dollars online is that the demand generation dollars have not moved online as effectively," she goes on "and that is 90% of a $650bn industry."

So it should come as no surprise that the tech giants are moving away from demand response to demand gen! They are after your less accountable media $£€!!

over 2 years ago

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Depesh Mandalia, CEO & Founder at SM Commerce

Dela: yes, except old-school broadcast could not identify you at anywhere near the level we can now. A cringeworthy name would be Broadcast 2.0. But its more than just finding the right customer, we need to think about how we engage them with this new found power. Too personalised in the very first ad and you risk freaking customers out (countless examples of over targeting). It's an extremely exciting time but also a very delicate one with privacy at the forefront of people's minds.

over 2 years ago

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Deri Jones, CEO at SciVisum Ltd

Off-topic, but I find it hard to believe Martin Lindstrom is correct when he says:

> Coca Cola, used reinforced glass around the logo on their glass bottles to ensure that if the bottle shattered, their logo would remain visible.

over 2 years ago

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