Social isn’t done for brands. It’s just about to start.

GlobalDrum
4 min readJan 13, 2020

Escalating costs of reaching audiences on social platforms is the catalyst for brands to seize new opportunities, and redistribute the value.

How did we get here?

Brands fund the social ecosystem. What started as brands interacting with their audiences for free in exchange for audience data, evolved to today’s paid social and a fundamental transfer of wealth from brands to social, projected to have reached $84Bn, up 19%[1] by end-2019. It’s going to get bigger.

As the barometer of social platforms, Facebook pivoted to become a paid ad platform as audience growth started to plateau in 2015, perpetually adjusting its algorithms since, to reduce organic reach by over 46%[2] since, demanding brands to pay escalating CPMs to interact with their audiences, that grew their ad revenues 19% YoY since representing 98% of Facebook’s revenues in 2018[3].

Paid social was never going to work for media, and it’s well documented they have a declining share of ad markets, with the Duopoly, projected to have secured 61% of US ad markets in 2019[4], soon to become the Tripopoly including Amazon. Whilst ad revenues and content opportunities remain, the underlying trend for media is continued volatility, and the imperative is to diversify revenues, and start to monetise valuable social audiences.

Brands have absorbed escalating social CPMs, with the best practice using first-party data from their own websites, to target look-a-like audiences, using social to create brand awareness or targeting those already on the path to purchase to convert them, but brands too will reach a tipping point, as escalating CPMs will test pricing elasticity to the limit.

Everything changes
Continued CPM escalation seems a dead cert based on social’s dependency on ad revenues, which may have additional inflationary costs to support. The challenge for is to be compliant with new regulatory demands, whilst maintaining EBITDA. This started with data in the form of GDPR, now extended by CCPA, and the even larger content issues regulators have only just starting looking at.

Media can’t compete on volume, despite any number of ad alliances, whereas social can offer brands unassailably large audiences, combined with online tools to convert audiences, particularly with diminishing cookies pools, whilst media has focused on reducing social referral traffic dependency and maximising tactical content deals.

Trust & abuse issues dilute social platform appeal, that are optimised for impressions, maximising audience on-boarding, with the consequence of providing an unfettered cloak of anonymity, enabling the plague of illegal content and abuse, diluting social appeal for brands.

What’s next?
The tipping point already appeared for media, but will progressively approach for brands, but for those bold enough to embrace change, what beckons will begin the redistribution value of social back to brands.

Brands can’t compete on volume with social platforms, but they can be highly effective using trusted content and precision to create diversified business models on demand to return control, revenues, and data for their most engaged audiences. Selective use of mass market social remains to use its unparalleled volume to generate brand awareness driving audiences to a brands own platform.

Media has the opportunity to make social begin to work for them, there has been a lack of competitive incentive for social platforms to improve. As an example; targeting isn’t great, there isn’t any data transparency, data isn’t real-time, it’s not possible to integrate second-party data, and referral traffic is anonymous so if audiences don’t convert, brands have to pay all over again. The bar can be raised, for giving media real opportunity to revalue brand partnerships.

Unfettered access has been a part of social platforms that were built to maximise impressions, but anonymity has come at the cost of mistrust and abuse that’s prevalent. In the new regulatory era this might produce an expensive tsunami of moderation, that even the optimists recognise, isn’t going to resolved by AI in isolation, that will challenge social platforms EBITDA, for whom the genie is already out of the bottle.

Opportunities for brands

Own the conversation, understand the audience.

Brands continue to use social platforms for unassailable mass-market reach, but own the conversation with their most engaged audiences on a platform controlled by them in collaboration.

There is no need to pay for the most engaged audiences that will convert anyway, and they can progressively use the data to identify look-a-like audiences to progressively recover more based on elevated engagement, conversion, retention, and advocacy.

Dilute the cloak of anonymity.
Introduce simple authentication on signup to reduce illegal content and abuse that has plagued mass-market platforms to protect trust, also enabling payment platforms.

Brands have the aces.
Brands finally have the opportunity to combine creative, content, conversation, and real-time data, with higher levels of audience trust, on their side of the equation to enable precision engagement, conversion, retention, and advocacy.

Redistribute the wealth
A new generation of social platform controlled by brands themselves, offers something they don’t get from todays platforms — partnership and collaboration.

Synchronised with mass market social, providing brands a lot of the great taste of social, but with live first-party data, AI-driven engagement, advertising, affiliate marketing, contextual and behavioural targeting, safeguarded data sales, and robust e-commerce tools, and advocacy, without the calories.

Brands get live data transparency, and much more, media can progressively monetise their own social audiences, remove the volatility, moving back to recurring revenue, and revalue brand relationships.

It will captivate the markets, and for brands it’s just starting.

Simon Hellier is CEO of GlobalDrum that empowers brands to take back ownership of the conversation with their most valued audiences. Shifting the focus from volume to precision & profitability.

www.globaldrum.social

[1] Statstica 2020

[2] Neilson 2019

[3] Facebook report & accounts 2018

[4] eMarketer 2019

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GlobalDrum

Empowering brands to take back ownership of the conversation with their most valued audiences