We also have to be clear on the differences between advertising and marketing. Advertising is defined as a form of communication used to influence individuals to purchase products or services. Marketing is defined as an integrated communications process through which individuals and communities are informed and persuaded that their needs can be met by products or services.
The primary difference, when you break them down, is where your money goes! Advertising really means paying to broadcast or display a message, whereas marketing refers to all the differentiated components that allow a brand to convey a message to a consumer, of which advertising is just one tactic. Marketing is the umbrella term.
Currently, social media ads are inexpensive, untargeted and not as effective as they could be. Social media is good at marketing, but it currently falls down when it comes to paid advertising. From a marketing perspective, it is a great way of engaging with a consumer through presence and seeding: creating a presence for the consumer to interact with and inserting (seeding) into existing conversations that may be of relevance to the brand.
On the advertising side, there is so much data and information that can be used, but the players are under-utilizing these assets. The targeting is sub-par, though the promise is off the charts -- and that's where we need to go to achieve success.
Case in point, I was on Facebook this morning and decided to interact with the Honda ad on the upper right-hand side of the page. I clicked the "x" to get rid of the ad and was offered the chance to provide feedback with the simple message, "Why didn't you like this ad?" I clicked the drop-down menu to highlight "uninteresting" and move on -- but was surprised to see another Honda ad pop up for me! If I indicate I'm "uninterested" in a Honda ad, isn't it illogical to show me another one? I gave the benefit of the doubt and clicked on the "x" again to see if it would respond better, and was immediately shown an ad for... Honda? This game went on for seven rounds, until I was finally exposed to an ad for Microsoft. I have never been so happy to see a Microsoft ad as I was at that moment!
I don't mean to be bashing Facebook. I think its ads are effective in providing a necessary component to the marketing continuum. But this was an example of a lack of targeting that created a negative experience between an advertiser and a consumer. I know Facebook can have stellar results when doing sampling programs, and I know its strategists are working on even stronger targeting tools for advertisers, but the fundamentals need to be done well before one can move on to the master class.
The impression in the marketplace is that Facebook is not a good place for paid advertising. MySpace has the same perception especially since the costs of advertising there are quite low; a low price can translate to a low perceived value. For Facebook, and eventually Twitter, to achieve the valuation they are looking for, they need to harness the data they have, or else bad ads will keep happening to good people!
I have to say that this issue is not confined to Facebook; it is an example of a larger issue where social media has not yet matured. The eyeballs are there and the standards are in place to present the messages, but we are not fully utilizing the strength of the information to ensure the proper consumer experience. As always, the consumer should be the focal point of the conversation.
I'm optimistic that in the next 12 months things will perk up and social media will indeed be a great place for brands to spend ad dollars. I guess that is my first prediction for 2010 -- more to come in just a couple of weeks!