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Navigating the social media advertising paradox

December 5, 2018 | By Rande Price, Research Director—DCN @Randeloo

There are two opposing views on social media that are impacting digital marketing decisions:

  1. Audience attention on social platforms offers a strong advertising environment (good for marketers).
  2. Consumer distrust of social platforms’ data and privacy practices detracts from their effectiveness (bad for advertisers).

Marketers and media executives discuss the social media advertising paradox ad nauseum in meetings, forums, and conference panels. Still, a whole lot of advertising dollars are being invested on Facebook regardless of its lack of transparency, data sharing, and stories of the company’s mismanagement and mishandling of data. In fact, Facebook’s Q3 2018 earnings cited a 33% year-over-year increase in advertising revenue while user growth remains stagnant in its larger markets.

Streetbees’ new research report, Re-positioning, reflects on this dichotomy. A full 86% of respondents follow brands on social media and 73% agree that a social media presence is necessary for brands to be successful. This research ranks Facebook as number one among consumers 25 and older for following brands (86%). Thus, the findings showcase Facebook as a positive environment for advertising placement.

Yet the research also finds that one-third of consumers in the US and India, Facebook’s two largest markets, do not trust the social network to keep their data safe. Further, nearly all users surveyed (98%) state that they continue to use Facebook even though they do not trust the service to protect their personal data. Yes, the paradox, a platform of users that do not trust its environment.

Facebook: friend or foe?

Streetbees’ consumer findings are analogous to advertising practices on the platform. Both consumers and marketers alike continue to use Facebook regardless of the mounting distrust of the platform. In October, Fortune exposed that Facebook inflated its video metrics for how long users were watching video content by up to 900%. Despite a steady stream of Facebook mea culpas, advertisers continue to purchase advertising on the platform.

The research also suggests that Facebook needs to focus on user retention. Younger audiences show limited interest in Facebook and older users’ attention appears to be waning. Only one in five of those under the age of 25 think Facebook is the “coolest” social platform. And when it comes to consumers reasons for quitting social media, the top two responses include “boredom” (51%) and “my friends stopped using” (22%). Eight percent also quit due to data concerns. As Facebook confronts user fatigue, growth in daily active user is significantly slow.

As social media challenges continue to emerge, advertisers need to hold platforms accountable. Short-term media strategies will not lead to marketplace sustainability. Audience attention is a critical commodity in the advertising paradigm and continued reliance on distrusted environments will undoubtedly harm the long-term success of the digital advertising model.

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