The Next Phase of Social Media Advertising

Six hundred billion dollars. That’s what advertisers are set to spend worldwide in 2015. Social media powerhouses Facebook and Twitter have rolled out new ways to target consumers through advertisements. But is the return on investment there for the companies that are fronting the bill?

According to Gallup, 62 percent of consumers say that social media doesn’t influence their purchasing decisions. With such a strong consumer sentiment, is it time for retailers to refine their strategies?

With retailers looking to use social media platforms for their advertisement capabilities, the accuracy (or the lack thereof) of these targeted ads presents a problem. A classic example is ads that target users regardless of their browsing history or whether they follow a brand’s corresponding profile. This misfire often leads to increased user disinterest, wasted dollars and potential consumer frustration.

Social platforms such as Twitter and Instagram have just started rolling out advertising efforts, and their targeting approaches are still maturing. However, retailers investing in this new wave of advertising want a dependable method and expect to see results — and fast.

Changing the Interaction: A New Type of Advertisement
Fortunately, there's a new opportunity in social media advertising that hasn't yet been tapped: interactive advertisements. The goal of these advertisements isn’t to direct consumers to a retailer’s website, but engage them in a new way. By offering consumers the option to interact with advertisements through game-like methods — e.g., choose the shirt you like best and receive 10 percent off your next purchase — retailers can increase customer loyalty, satisfaction and, most of all, consumers will feel like their opinion is valued. Furthermore, this method can be translated to nearly every industry because in the end, it’s based on getting valuable feedback from consumers.

Gamified advertisements have matured into actual game-like experiences that keep consumers engaged, but still get across a branded message. Companies are having success with this approach. For example, Celtra, a technology platform for creating dynamic tailored ads, witnessed engagement rates of 16.2 percent for gamified advertisements compared to 10.4 percent for traditional ads.

And there’s more to come. The next step for these advertisements is to make them more targeted and provide reasons for consumers to engage, such as access to sales codes, exclusive content and early access to deals. Additionally, connecting interactive advertisements with predictive analytic technologies can provide a deeper view into customer preferences.

A Data-Driven Approach
Based on the consumer data collected from gamified advertisements, companies can overlay predictive analytic algorithms to reveal more details about specific demographics. These analytics can provide a closer look into consumer age groups and locations without needing to scrutinize the brands consumers follow on social media or their browsing history. Correlations between user interest in sales and prices can sharpen the targeting capabilities of interactive and social ads, but can also be fed into product and inventory strategies.

With social media giving consumers more of a voice than ever, the next step is to have them provide more focused feedback on the products they love and those they can live without. Social media platforms are still in the early stages of development, but they should start looking at incorporating gamified advertisements as a way to improve capabilities and consumer engagement. Getting closer to the consumer mind-set has always been a hope of advertising and, if the right approach is taken, social media could be a key way to do so.