Why YouTube is the King of Social Media Advertising

Source: Thinkstock

Source: Thinkstock

In the past few years, there’s been a decided shift in the way businesses utilize social media. Many companies, for instance, are diverting more of its advertising dollars to Twitter, rather than Facebook, a social media platform which has historically been one of the most utilized for marketing purposes. New studies have also recently suggested that other social networking sites, such as YouTube and even Pinterest, are increasingly effective at drawing in consumers and, as a result, marketers are beginning to pay more attention to these social networks and the different ways it’s effective at courting potential customers.

Part of the shift toward other social networks (besides Facebook, that is) may have something to do with a change Facebook made to its algorithm that has substantially decreased the organic reach that businesses have to its followers. That is, even if you’ve “liked” a business or organization, you’ll only see a small fraction of its content on your news feed. In many ways, the move was probably a wise decision for Facebook; to make up for a decreased reach, more brands will have to shell out for paid advertisements on the site, but it has also made some companies look to other social media tools such as Twitter, Pinterest, or YouTube — and for good reason.

AOL Platforms recently conducted a study that measured the effectiveness of the major social networks at various stages of the buying process, and has found that YouTube can actually play a critically important role in converting its audience into buyers. The study found that YouTube is the best social network for marketers as both a medium for introducing new products as well as for helping to close a sale in the last stage of a consumer’s buying process. Further, the study found that unlike some social networks, YouTube also did surprisingly well in the mobile app space.

Source: Thinkstock

Source: Thinkstock

“In our analysis, YouTube appeared to be the strongest of the social networks at introducing new products (18 percent and driving conversions (14 percent). This is a good indication that video is an important format for advertising to potential customers,” the study added.

So why, exactly, is YouTube so successful with consumers? AOL Platforms speculates that, “YouTube’s own search volume and preferential positioning on Google’s results help drive large amounts of traffic, of course. But when you get to YouTube, the content is rich, descriptive, and usually helpful.” In other words, the site drives huge amounts of traffic, but is also fairly well-respected and considered to host helpful content by consumers who are often watching videos created by people just like themselves.

Wheeler Winston Dixon, a professor of film studies at the University of Nebraska, notes that there’s something inherent in YouTube’s structure that just works with advertising. He notes that because of the way that YouTube is laid out, users are encouraged to continually click from one image to the next — a setup that gives marketers dozens of opportunities to land the audience of a new consumer. “In a world which exists almost entirely through clicks, the viewer just keeps on hitting the next button, and then the next, until the entire site becomes a seamless blend of content and commercial advertising,” Dixon said in an interview with E-Commerce Times.

Dixon says he also thinks part of advertisers’ success with YouTube could be because on the site, viewers are less likely to register an ad for what it is. “Viewers essentially see ads on YouTube as another video, rather than being a commercial,” he says.

Another aspect of YouTube’s success — and perhaps part of why the site is so good at closing sales in the last stages of a customer’s buying process — is the fact that YouTube is largely populated with content created by fellow consumers. Jeff Zwellig, CEO of Convertro, whose attribution modeling technology contributed the data for the AOL platforms study, says that he’s used YouTube for this exact purpose. “I recently bough a coffee machine. I had the decision down to three alternatives and couldn’t decide which one was best for me. In the end, I watched videos on YouTube of people using all three machines and chose the one that matched my idea of a good coffee maker,” he said, per VentureBeat.

Source: Thinkstock

Source: Thinkstock

The AOL platforms study is particularly interesting considering previous data, such as this survey conducted by AdAge magazine, which suggests that most advertisers hardly budget any money on YouTube campaigns.

Regardless of which social network delivers the biggest ROI or drives the most consumer interest, one thing is definitely clear from the AOL platform study, among others: social media marketing is a field that’s still growing, and rapidly, particularly given a larger shift away from cable television as more and more Americans become “cord-cutters.” EMarketer estimates that spending on social media ads will hit $6.6 billion in the U.S. this year, growing more than 46 percent from 2013.

Marketers love social media advertising for a lot of reasons, but in particular because it allows them to track the influence of various campaigns in a way that television and other media rarely can. “Social provides significant impact on a customer’s path to purchase and strongly influence their buying decisions,” AOL platforms notes.

The study also found strong evidence for the use of paid social media advertising, though the study notes that both forms of social media marketing are important, as they address consumers at different points along the “consumer path.” AOL platforms notes that, “While organic social advertising is usually a middle touch point that marketers can leverage to keep the consumers engaged and accelerate conversion, paid social advertising definitely works for new customer acquisition tactics.” The study notes that, “Marketers that allocate ad spend to social channels see a nearly 25 percent lift in the number of sales generated by advertising, compared to sales generated by organic, non-paid marketing touch points.” For instance, promoted tweets, according to the study, led to three times higher conversion rates than non-paid.

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