Wednesday 7 December 2016

Your business guide to what sites are working on the social scene

Published 06/08/2015 | 02:30

Which social networks should Irish companies be marketing on?
Which social networks should Irish companies be marketing on?
twitter
snapchat
facebook

Which social networks should Irish businesses be marketing on? Is Facebook the main platform for advertising? Is Twitter's star fading among marketers? And how much should Irish businesses be looking at newer platforms like Snapchat? Last week's volley of social media quarterly corporate results were an eye-opener. Facebook emerged from its looking solid while Twitter took it in the neck. Lurking with intent in the background is Snapchat, Instagram, Pinterest and a number of others, reports our technology editor

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Facebook

Facebook is currently master of most it surveys when it comes to social channels. It's not just its gargantuan reach (1.5bn monthly active users, almost 1bn daily active users worldwide and over 2m in Ireland). It's that it dominates 'social commerce' with most surveys giving it between 60pc and 70pc of ecommerce referrals from social media traffic.

Part of the reason for this lies in the social network having effectively become a utility, being more and more central to connecting with family and friends in modern life. A whopping 72pc of Facebook users check in with the site (or app) every single day. This is far in excess of any rival social network or service.

Facebook's ability to commercially roll with our switchover to phones is one of its strongest lures, too. According to its latest quarterly results, 76pc of the company's advertising now comes from mobile devices. That gives it relevance to advertisers.

But Facebook's power is wrapped up as much in its hugely valuable subsidiaries as in its own newsfeeds. Instagram, which has over 300m users worldwide, has just flicked the switch on advertising APIs (automated software that lets advertisers place ads without calling someone up).

Basically, this means that companies can now schedule or publish marketing content, monitor audiences and otherwise measure Instagram campaigns. Instagram is the darling of marketers' future plans with high success rates on branding awareness and 'user engagement' for brands using it such as UK retailer John Lewis, Mercedes and Ben & Jerry's ice cream.

Facebook even has a credible long term plan for as-yet-untapped marketing inventory. Its Messenger (700m users) and WhatsApp (800m users) services are virtually ad-free at present.

Even with calls from some investors to "unlock" some of the commercial potential there, Facebook founder Mark Zuckerberg told a quarterly conference call last week that it would be a slow process so as not to jeopardise the nascent experience of those messaging services' users.

One of Facebook's biggest strengths is that its users aren't going anywhere: stories of younger people ('millennials') abandoning Facebook are simply not borne out by any official usage figures or user surveys.

Those who said that it was all a 'fad' are now looking foolish.

Snapchat

Alongside Instagram, Snapchat is currently the name on the lips of forward-looking marketers at the moment. The reason is because of its usage figures. Aside from its 100m daily users - including at least 750,000 Irish users - it is the frequency with which committed users are frequenting the app. According to Ipsos MRBI, 63pc of Snapchat users in Ireland use the app every single day. That is far higher than any other messaging service and is second only to Facebook's exceptional 72pc daily usage rate.

Snapchat's ad strategy is in its infancy. Irish users barely see an ads at all, unless it comes through brands running their own Snapchat accounts. But large US brands have been using it for some time and Snapchat is reported to be closing in on around €50m in revenue this year from it. At present, US brands are charged 2c per view for a 10-second ad within one of its 'Live' stories. According to Millward Brown, Snapchat users are three times more likely to see a movie from an ad on Snapchat than non-Snapchatters. And the company's ad literature quotes Nielsen in reporting that almost eight times the number of 13-34 year olds are likely to see something through Snapchat's 'Live' as they are from conventional TV. The lack of video pre-rolls ads (Snapchat founder and CEO Evan Spiegel has ruled them out as "annoying") is one reason they like it so much.

In Ireland, some companies have used Snapchat for soft branding purposes. M&Ms have used it to promote competitions and, according to brand partners, will use it again this month in the same context. The confectionary brand's modus operandi here is a basic one: set up an account and drive Snapchatters to it by promoting a competition.

In the future, though, Snapchat is set to become more important. It is starting to slowly build out media channels that people are watching. Its 'Discover' and 'Live' stories categories reportedly attract millions of views each per day. The company says it plans to build these out. It means business in competing with traditional media channels, too: it is currently hiring news and political editors to grow its own media presence.

It is even changing the way videos are being filmed. Snapchat is leading the charge for vertical ('portrait') video, as that is the orientation that most naturally fits its phone users. The result is that ad agencies are now having to take vertical videos seriously as a marketing format, or else risk their work being consumed in a letterbox-style format by Snapchat users.

Twitter

"Simply said, the product [Twitter] remains too difficult to use," said Twitter chief financial officer Anthony Noto immediately after the company's quarterly results last week. "This is both a product issue and a marketing issue."

It's not just the lack of growth in Twitter's user base that is concerning market-watchers. Also at issue for Twitter is whether ads being placed on the platform are working at all. New research from the US suggests that only 3.1pc of Twitter users regard the ads they see on Twitter as being relevant. The research, from Cowen and Company, comes as marketers cool on Twitter as a platform for ads. While the social network has arguably increased its global influence as a news and opinion conduit, it cannot seem to convert that impact into effective commercial engagement between advertisers and users.

It's not just direct ads that are a problem. Recent research by Moovweb shows that only 0.04pc of mobile e-commerce traffic comes from Twitter, compared to 0.16pc for Pinterest and 1.32pc for Facebook. It may be down to the smaller number of marketers present, but there appear to be very few leads or e-commerce conversions coming through from Twitter using a front-door metric.

To be fair, Twitter's ad revenue is growing - up 63pc to $452m (€412m) for the second quarter of 2015. But ad growth is slowing and users aren't responding to ads. In recent months, the company has teamed up with (Google-owned) Doubleclick and others in order to bolster its offering.

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