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Facebook Video Ads: Boon or Bane for Retailers and Consumers?

BY Dan Berthiaume

Facebook is taking another step toward monetizing its vast audience of plugged-in consumers with the planned introduction of paid video ads. As reported in numerous media outlets, Facebook intends to launch 15-second video ads that will play in a user’s newsfeed three times per day for as much $2.5 million per spot.

That approaches the $4 million cost of a 30-second TV ad during the Super Bowl earlier this year, although as other observers have pointed out Facebook’s global membership of 1.15 billion favorably compares with the billion viewers around the world regularly claimed (and sometimes disputed) for the Super Bowl.

So will Facebook video ads prove to be a boon or a bane for retailers and their customers? The answer may not be so clear cut.

Boon
As I wrote about in last week’s column, video is rapidly evolving into a separate channel for consumer engagement. Video is a natural fit in an ultra visual medium such as the Internet and has proven extremely popular with the public. Video ads offer retailers a natural way to bridge online and TV advertising campaigns. The price is expensive, but Facebook’s high user totals and engagement levels are undeniable.

Bane
Video ads will reportedly play silently until (and unless) users click on them and will not play more than three times a day. There is no compelling evidence that click-through rates on video ads will surpass generally anemic click-through rates on other types of online ads, although as always careful targeting can play an important role. Social media and the Internet are replacing TV to varying degrees for many consumers (especially advertiser-coveted Millennials), so the wisdom of blurring the line between Facebook and TV may be questionable.

And the verdict is…

No clear verdict here. Based on reported cost, obviously only larger retailers with deeper pockets will experiment with Facebook video ads, so to some extent if you can afford it, you can probably afford the risk. Moving beyond cost, it seems that Facebook video ads may prove most valuable for two dissimilar types of retailers – mass merchandisers and purveyors of specialized products that already heavily use social media marketing. Let me explain why.

Mass merchandisers have an audience that skews older and broader than most other retail niches and thus will likely be receptive to advertising that reminds them of promotions they receive in the traditional TV medium. Their customer base is also less likely to use social media for its “cool” capabilities and more likely to use it as one more way of obtaining information.

The other type of retailer I mentioned, let’s call them “hipster” retailers for lack of a better term, probably already knows a great deal about their Facebook fans and how to effectively target them. As a result, hipster retailers will be uniquely positioned to craft the right video content and send it to the right Facebook consumers at the right time.

Given the company’s overall track record, video ads will likely become a permanent part of the Facebook landscape once they are launched. But they may prove less effective than hoped and evolve into something very different than what they started as. Unless you are a retailer with a very large marketing budget or a tradition of social media innovation, you may want to let a few pioneers establish the proving ground for video ads on Facebook.


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Small businesses gain social, mobile ground

BY CSA STAFF

CHANTILLY, Va. — Small businesses are increasingly embracing mobile and social platform to improve their operational efficiency and promotion, according to the latest findings from local media consulting company BIA/Kelsey’s “Local Commerce Monitor” tracking survey.

Mobile payments, particularly, are gaining significant traction with small businesses. Of those surveyed, 40% confirmed that they now accept payments at the point of sale with a mobile credit card reader attached to a smartphone or tablet (PayPal Here, Square), and another 16% said they plan on adding the capability within the next 12 months.

Small businesses are also turning to mobile to get customers in the door. Of those surveyed, 32% stated that they are using some form of mobile advertising to promote their businesses, up from 28% in 2012.

"Mobile continues to make impressive inroads into the small business market, as both a marketing vehicle and as an element of the business infrastructure," said Steve Marshall, director of research, BIA/Kelsey. "A closer look at the data shows adoption of mobile and social varies across small business industry sectors. The LCM data reveals professional and home and trade services are embracing mobile in a big way, with service providers essentially becoming walking point-of-sale terminals."

Nearly three-quarters of SMBs surveyed — 72% — indicated that they are using social media to promote their businesses. In addition, 52% of SMBs surveyed have a Facebook page for their business and 25% have a Google+ Local page.

"Together, mobile and social tools are transforming the way SMBs acquire and retain customers." added Marshall. "With the heavy use of social media, small business marketing is quickly becoming a two-way engagement rather than a one-way promotion."

Many small businesses gave themselves high marks on their level of social engagement. When asked how "engaged" their businesses are with their customers on social media (e.g., responding to online comments, regular blogging or tweeting, regular updating of their Facebook page, offering a loyalty program), 66% stated they are "extremely engaged" or "very engaged."

BIA/Kelsey will present these findings at its upcoming Leading in Local: SMB Digital Marketing conference, which takes place Sept. 11-13, in Austin. The latest developments and opportunities around mobile and social solutions for small businesses will be woven throughout the conference, and in particular during keynote addresses and panel sessions featuring:

Matt Baker, head of small business partnerships, Facebook (Keynote)

Russ Laraway, senior director, small business, Twitter (Keynote)

Vikas Jain, head of business development, Google/Wildfire (Keynote)

Seth Priebatsch, CEO, LevelUp (Keynote)

Zorik Gordon, CEO, ReachLocal (Keynote)

Raj Kapoor, senior director, local and mobile advertising, Microsoft

Surojit Chatterjee, head of global mobile search, Google

James Price, VP, digital, Dex Media

Local Commerce Monitor is BIA/Kelsey’s ongoing tracking survey of small and medium-size businesses conducted online with research partner Ipsos. The survey measures where small businesses are spending their advertising and promotional budgets and how their media usage and spending habits are evolving. For this study, a small business is defined as a business having from 1 to 99 employees. Local Commerce Monitor draws its sample of business respondents from a mix of nationally scoped metropolitan statistical areas, which include first- and second-tier markets. Local Commerce Monitor Wave 17 was conducted in July 2013 via an online survey of 568 SMBs.

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JCP turns to ad industry exec to reconnect with customers

BY CSA STAFF

Efforts to revitalize the J.C. Penney brand are now under the leadership of Debra Berman, a former Kraft and advertising executive who was named SVP of marketing at the struggling retailer.

Berman most recently served as vp of marketing strategy and engagement at Kraft where she was responsible for marketing strategy and engagement, directing global brand strategy and customer engagement for all Kraft-owned brands and leading Kraft’s marketing communications Center of Excellence.

Prior to joining Kraft in 2009, Berman spent nearly five years as strategic planning director at DDB Advertising, and before that held senior strategy planning roles at Sterling Brands, Young & Rubicam and Swander Pace and Company. Earlier in her career, she progressed through roles of increasing responsibility at advertising firms JWT, Saatchi & Saatchi and Lintas.

In her role at J.C. Penney, Berman will be responsible for leading the company’s marketing efforts with a focus on revitalizing the retailer’s brand, communicating the brand promise and building a brand architecture. She will report directly to J.C. Penney CEO Myron Ullman and serve on the company’s executive board.
"Debra Berman is an enormously talented marketing executive, and her desire to join the J.C. Penney team is a testament to our brand and its potential," Ullman said. “Her broad experience and success as a marketing strategist for major consumer brands make her the ideal leader to help us continue to reconnect with our core customer through effective promotions and campaigns that will increase excitement and loyalty now and over the long term."

According to Berman, she believes there is a huge opportunity to remind America’s families why it is so great to shop at J.C. Penney while attracting new customers to the brand.

“This can be achieved through targeted campaigns that creatively highlight our unique and authentic combination of style, quality and value. I am eager to begin working with Mike and the entire team to restore J.C. Penney’s place as an iconic destination for customers for important occasions and all the times in between."

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