Six Pixels of Separation - The Blog
April 29, 2012 6:41 PM

Why Are Social Media Agencies Now Buying Advertising?

Episode #303 of Six Pixels of Separation - The Twist Image Podcast is now live and ready for you to listen to.

I find it very embarrassing that after three hundred-plus episodes, we've never had Jeremiah Owyang on the podcast. He's currently Partner of Customer Strategy at Altimeter Group, a research based advisory firm started by Charlene Li (Groundswell and Open Leadership). I've been following Jeremiah (and admiring him) since his days at Forrester Research and was one of the earlier readers/fans of his blog, Web Strategy. On April 14th, 2012, Jeremiah posted a fascinating piece on his blog titled, Trend: Social Media Agencies Turn to Advertising (make sure to read the comments too!). According to his blog post: "In a stunning early finding of interviews with nearly a dozen social media agencies and software providers, I'm seeing a new trend: Social media agency of record (SMaoR) are now moving into advertising buying." Very conversation worthy...

You can grab the latest episode of Six Pixels of Separation here (or feel free to subscribe via iTunes): Six Pixels of Separation - The Twist Image Podcast #303.

By Mitch Joel


Comments Comments Feed
  • Posted by Grant Crowell
    Mitch Joel

    On a related note, I've considered the term "social media advertising" to be an oxymoron. To me, "social" is supposed to be about cultivating relationships with opportunities for direct engagement (i.e., person-to-person communications). Advertising is about reach and brand awareness, but most often just considered "social" to be a technology platform where they can push their ads to audiences, without P2P engagement as a follow-up. Sure, I've seen exceptions, but they are not ingrained nor connected with the original strategy.

    Reply
  • Posted by Alan Belniak
    Mitch Joel

    All SPOS podcasts are good, but this is one of the better. As a listener, I felt like I was watching a tennis match - but two friendly opponents playing. The chatter was intellectual, upbeat, and thought-provoking. I especially liked the part where Jeremiah hinted at something potentially new (he can't reveal all of it yet.. ABR!), and Mitch counters with, "Whoa - you can't just say that and keep going. Let's go back to that..."

    Reply
  • Great episode. This is a trend that has been going on for a little over a year and is picking up pace. We have noted it in all of the agencies that we track. We saw it as such an accelerating trend, that we did a research report on Facebook ads (when we talk about social ads, we are mainly talking Facebook for now) and had some interesting findings. It is no surprise, expertise follows the budgets and ad budgets dwarf social budgets.

    Above all, the social media professionals still have plenty of room to mature their social ad expertise. Lots of great stuff happening out there but mainly driven by the Facebook Ad API vendors. Not as much by the agencies at all, or the brands. That is slowly changing. But I suspect will be the longterm reality of this sector.

    Reply
  • Posted by Rxgs
    Mitch Joel

    Fascinating stuff. What’s particularly interesting is that the digital agencies’ reign was so short. I can understand the traditional agencies getting eclipsed, but the digital ones had a very short stay on the throne. As the buying becomes a commodity (like everything else, as Francine pointed out), the only thing that seems secure is the strategy role. Seems like a great time to be McKinsey or BCG– clients should spend money on the hard, leverageable part (the thinking), and outsource the creative and the media buying to low-cost providers. (Why not send the media buying jobs overseas?)

    Whoever collects and synthesizes those elusive case studies into real capital-K Knowledge will be able to sell a whole lot to clients desperate for help.

    Reply
  • Posted by Franlyn
    Mitch Joel

    Given that the mechanics of Facebook, Twitter, Linkedin, and YouTube advertising are substantially similar to Google Adwords in most important respects, media buying is going to be a short-term play for social agencies.

    Today’s SEO/SEM firm is yesterday’s ad agency. Just like when ad agencies slept on the first digital wave, SEO/SEM is capable of seizing a whole new market by owning social advertising. Yet to date, they are too fat and happy doing their legacy work to press their advantage (In most cases. There are SEO/SEM players doing serious, excellent work in social advertising).

    But eventually, when social advertising becomes less experimental and more driven by science and behavioral results, the collective decades of targeting and real-time optimization experience possessed by SEO/SEM will allow them to grab the majority of that spend – either organically or by the larger SEO/SEM guys buying social agencies that have a head start.

    There’s no question that social agencies have a scale problem, as there’s only so much you can charge any company for engagement, promotions, and community management. But while it will be a great ride in 2012 and 2013, they aren’t going to do be able to get big on the backs of the social ad budget forever. That’s why you’re seeing the smart ones (like Vaynermedia) trying to bulk up at lightning speed. Only a few will be bought by SEO/SEM first tier and/or advertising holding companies. The rest will be relegated to $5-$10 million/year lifestyle businesses.

    Reply
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