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Marketing in the digital age /

A brand new game : As people spend more time on social media, advertisers are following them

Aug 29th 2015 | SAN FRANCISCO | The Economist

 

EARLIER this year BMW advertised on WeChat, a popular messaging app in China with around 550m monthly users. But its ads were shown only to those whose profiles suggested they were potential buyers of expensive cars. Others were shown ads for more affordable stuff, such as smartphones. […] The carmaker’s experience shows the complexities of advertising today, when it is so easy for dissatisfied customers to make their voices heard. But it was also an example of how marketing chiefs are struggling to find the right way to reach consumers on new digital platforms, where they are spending ever more of their time.

Not long ago social-media marketing was something that brand managers might ask their summer interns to deal with. Today it has become a pillar of the advertising industry. Social networks like Facebook, Twitter and LinkedIn have cultivated vast audiences: 2 billion people worldwide use them, says eMarketer, a research firm. Online advertising of all sorts continues to grow, and within that category, spending on social-media ads has gone from virtually nothing a few years ago to perhaps $20 billion this year (see charts).

Advertisers like social-media platforms because they gather all sorts of data on each user’s age, consumption patterns, interests and so on. This means ads can be aimed at them with an accuracy that is unthinkable with analogue media. […] Such fine-tuned targeting means that the distinction between advertising and e-commerce is becoming blurred. Facebook, Twitter, Instagram and other platforms are selling ads containing “buy now” buttons, which let users complete a sale on the spot.

But the digital-media business is still young and volatile, and it is hard to predict which social networks are destined to become the new-media equivalents of America’s big four broadcast-TV networks.

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