2010 has been an incredibly dynamic year for search marketers. The paid search marketing landscape continues to change rapidly. However, it is the advancements and changes in other performance marketing channels that will prove to have the most profound and lasting impact on the search marketing industry. Display and social media advertising are moving closer to search-like pay-per-click optimization. Paid search is now just one of many performance-driven channels that live in a broader ecosystem. While this is exciting news for search marketers since they now have more channels to drive performance for their campaigns, it is also vitally important that they adapt a structure for these changes.
Of all the changes, the rise of Facebook could be the most interesting. According to Experian Hitwise, Facebook is now the most visited Web site in the U.S. - more than Google. Google still has a larger reach than Facebook (81% to 53%) but Facebook is closing the gap and the reach is very impressive nonetheless. With the ability to target Facebook advertising with very specific targeting and bid on a CPC basis, it is only a matter of time for significantly more performance-based advertising dollars to follow suit. Social media is part of social search marketing; however, social media (Facebook) is also part of the display ecosystem.
Is Facebook better for branding or performance display marketing?
Among our U.S.-based clients, the primary use of Facebook to date has been for a broader social media strategy -- cultivating brand loyalty and creating an outlet for their biggest "fans" to interact directly with their brand. Indeed, we have several clients using paid search to drive traffic to their Facebook page. Brand goals on Facebook are similar to those in other forms of advertising - driving awareness or increasing intent around a particular brand or product. However, a key difference with Facebook is that marketers who have a social strategy and existing community of brand loyalists ("Fans") on the platform can utilize paid advertising to increase Fans or "Likes" for their brand. This, in turn, serves to build up an active and growing community, which they can nurture to become more vocal advocates. What's more, it can inspire those organic placements, since news of a consumer "Liking" a brand on Facebook is often shared with their friends in newsfeeds and other organic placements throughout Facebook.
Fine -- but what does this have to do with search marketing? Three things: 1) More so than paid search, Facebook is used as a branding and performance marketing vehicle; 2) understanding how users uniquely interact with Facebook is critical to a successful performance marketing campaign; and 3) there are differences in marketer's perceptions of Facebook and finding equilibrium between using it as a social search, branding and engagement tool, or as a performance display advertising tool.
What's taking so long for the performance marketing dollars to move over?
Interestingly, we are seeing a dramatic difference in adoption of performance-based advertising dollars in the U.K. as compared with our U.S. clients. Those in the U.K. all have a performance-based Facebook strategy. According to comScore, Facebook advertising in the U.K. is leading the recovery of display and accounts for a third of the display market. In contrast, our clients in the U.S. are mostly still testing. However, there are exceptions to this, as some media & entertainment clients love Facebook because you can get relatively cheap CPMs that are hyper-targeted.
For performance-based marketers, the advertising dollars will ultimately follow direct profits. For now, Facebook advertising seems to be more profitable in London. The ground moving momentum of performance-based Facebook advertising in that market portends great things for Facebook (and advertisers) in the U.S. Technological advancements in holistic optimization across digital marketing channels will also speed Facebook adoption. The ability to easily optimize, track, and attribute Facebook and other media in a single platform will potentially drive significantly more media to Facebook in the coming quarters.