As the just-released Social Intelligence Report by Adobe Digital Index (ADI) for Q4 2013 clearly explains, marketers who fail to advertise on social networks are missing a large audience for a relatively low cost. Marketers can get a lot of high-quality traffic and click-through rates (CTRs) from social ads, and can drive even more value when they analyze and optimize each campaign.

The report, which analyzes paid, earned and owned social media trends, is based on a study of 240 billion Facebook ad impressions, 1.5 billion Facebook posts, a half a billion referred visits and 6.3 billion social engagements on Facebook.

Just Give Me the Important Stuff

The key takeaway is that there is still a lot of untapped potential in social paid advertising. Most marketers are only beginning to experiment with it and optimize it, the report claims. But those efforts are expected to intensify this year, and "by 2015, we expect to see a good balance between content and advertising and targeting and privacy that marketers and users alike can all live with." Other key findings:

  • Increased Revenue Per Visit (RPV): Facebook, Twitter, Pinterest and Tumblr sent more qualified traffic to retail than ever before with revenue per visit (RPV) up across all channels. Tumblr’s RPV jumped 340 percent year-over-year, followed by Pinterest (244 percent), Twitter (131 percent) and Facebook (72 percent). Pinterest is expected to overtake Facebook’s RPV in the US this year.
  • More Competition in Referred Visits: While reports of Facebook's death may be greatly exaggerated, the leading social network is starting to lose share to competitors. Referral traffic from Twitter and Pinterest was up 125 percent and 89 percent year-over-year, respectively.
  • But Don't Count Facebook Out Yet: CTRs for Facebook paid advertising jumped 365 percent year-over-year and the cost per thousand impressions (CPMs) increased 437 percent year-over-year. Facebook’s cost-per-click (CPC) leveled off with the exception of a 29 percent spike during the holiday season and its ad click volume is up 125 percent year-over-year.
  • Deeper Social Engagement: And people are still engaging with Facebook brand posts (up 180 percent year-over-year), especially when those posts contain images. The report noted, "Brand posts with images produced a 650 percent higher engagement rate than regular text posts (up 10 percent), while posts with links, text or video yielded less engagement year-over-year."

Should We Really Believe This?

James T. Noble, head of London-based James T. Noble & Associates, a digital marketing agency, agrees.

More businesses need to be using paid ads. Far too many businesses (particularly small-and-medium size businesses) think social media is free — and they're missing out on huge and highly-targeted audiences as a result. Marketers must start seeing social networks first as audiences to be reached, and then as an arena for engagement. If they do this backwards, they're spending too much time, energy & resource on too small an audience."

But whether social paid advertising is really the panacea vendors like Adobe seem to suggest is open to debate. Clearly, not everyone agrees — including Jeff Gibbard, president of True Voice Media in Philadelphia, an agency that devises social media strategies for small and medium-size businesses. In a blog post in June, pointedly headlined "Here's Why We Stopped Wasting Time on Facebook," Gibbard concluded Facebook wasn’t worth the time and effort, at least for his business.

His prime objection: Facebook's algorithms, which, he stated, have "nothing to do with brand" or "what’s actually important" to the company.Rather, he wrote, "It has everything to do with what Facebook has deemed important."

Gibbard told CMSWire today that an effective ad is more about the advertiser than the platform. "Platforms are improving, but ultimately people are less receptive to ads," he noted. And he questioned Adobe's contention that "Marketers who didn't advertise during holidays missed out."

Learning Opportunities

The statement "assumes that all marketers are created equal or serve the same audiences," he said.

But options for social network advertising are growing. Even Google Plus is beta testing an ad format. Called Plus Post, it lets you "amplify your content and create conversations across the web" — much like Facebook and Twitter promoted posts. However, rather than showing up in users’ news feeds, the ads will appear on the Google Display Network.

Marshall Sponder, founder of WebMetricsGuru Inc. and — and a new CMSWire contributing author — said he was "impressed with Pinterest's growth as a revenue generator more than anything else in the report, but surprised Instagram wasn't reported on at all."

If you have experience with social network advertising, share your thoughts in the comments section below.

Title image by Photosani (Shutterstock).