You Can do Better than Facebook Ads. Here’s How.

You Can do Better than Facebook Ads. Here’s How.

“The secret to social media success is to think and act like a member first, and a marketer second.” – Mari Smith, Facebook Marketing Expert


Great advice, Mari – but does Facebook really follow the formula of “think and act like a member first and a marketer second?”

The platform has become such a vital marketing tool that Facebook is actually managing to capture a portion of Google’s ad revenue. This is not only because 47% of people leverage ad blocking technology, but because Facebook touts such a diverse spread of ad experiences for brands to leverage.

While advertising on Facebook is an effective avenue of driving sales and generating new prospects, there is still a better and more user-friendly solution available to marketers: Influencer marketing.

Let’s explore some of the key differences between the Facebook ads and influencer marketing as well as why leveraging influencers is a more fruitful strategy.

Visibility, Pricing, and Trust


Facebook ads are seen by millions of users every day. As increasingly compelling and feed-integrated ads emerge, they are starting to look less and less like ads and more like status updates from a user’s network.

Despite this fact, brand ads still reach a minimal audience if the right elements are not in place. This is in accordance with Facebook’s relevance score for ads.

Even with the chameleon-like nature of these adverts, many people still feel that they are intrusive to their social experience. All in all, eyeballs do not equate to sales.

When talking about influencer marketing, however, these individuals are not bound by the same restrictions. More importantly, these folks are sought out by their audiences who enjoy interacting with their content. And if the influencer is prone to making videos, that content will actually receive a boost in feeds as it is prioritized higher by Facebook’s algorithm.

As for cost effectiveness, most view influencer marketing as a hefty investment, hence why many opt for Facebook ads. In Fanatics Media’s experience and research, however, the cost per thousand impressions (CPM) for Facebook ads clocks in at $7 – $12. Compare that to the average CPM for influencer marketing which lands around $5 – $10.

When examining cost per click (CPC) Facebook is still the costlier choice as that averages $0.28 versus influencer marketing’s $0.16.

The most important point to consider, however, comes by way of trust metrics. As it currently stands, 84% of millennials (the most active group on social media) don’t trust advertising; hence the ad blockers.

In the influencer marketing arena, these social superstars are trusted 92% more than even the best ads. In fact, influencers are so credible that a recent study found that Twitter users trust these folks almost as much as their real-life friends.

But wait – there’s more!

Longevity and Discoverability


The entire point of influencer marketing is to create long-term results. That’s almost never a benefit to traditional advertising.

Just like all others, Facebook ads run for a finite amount of time (the length of the campaign) and then disappear quicker that a Snapchat post.

The content influencers create, however, is forever; especially when it comes to blogs and videos.

Video content, such as YouTube videos, lives on a creator’s channel for as long as that portal exists. This means that videos continue to gain views and drive sales and conversions long after a campaign has ended.

The discoverability of this content is not just limited to digging through a creator’s channel, either. Videos are constantly served up to users within the platform and YouTube videos also turn up in Google’s SERPs.

To put things plainly, you just don’t get the same longevity or discoverability out of Facebook ads as you do with influencer-created content.

This is not to discourage you from using Facebook ads; they are an effective tool. Facebook ads play an important role in your overall marketing strategies, but the next time you consider launching an ad campaign, use the modality as a supporting role to your influencer-led efforts. Pairing the two, and allowing influencers to do the heavy lifting, will produce the most prosperous results for your campaign.

Tina Courtney
Marketing
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Conscious online marketer, Web executive, and multi-faceted writer, Tina Courtney has been creating and fostering online innovations since 1996. She’s produced and marketed ... Click for full bio

Sizing up Strategic Beta

Sizing up Strategic Beta

Interest in strategic beta ETFs is rising. A few simple guidelines can help investors pick from among the often-bewildering number of options.


The number of strategic beta ETFs has grown at 20% a year, consistently in good markets and bad, since the year 2000.[2] With good reason: Strategic beta ETFs offer a more thoughtful passive option than cap-weighted indexes—and they can do so with a more transparent process and lower fees than actively managed funds.

Bright future, dim past    


All well and good, but how should investors assess any particular strategic beta ETF? Close to 40% of these funds have been in operation for less than three years[2]. This lack of an established track record can make it hard to validate their claims. ETF sponsors may try to make up for that shortcoming with back testing, running simulations of holdings they might have had against actual past market performance, but that has its limitations:

Back testing doesn’t always account for fees, liquidity or transaction costs.

Back tests are “selection biased”—that is, back testers have a tendency (conscious or not) to engineer positive outcomes. Live outcomes are therefore likely to be inferior.

Too great a focus on recent history can lead to “driving in the rearview mirror.” While an index or ETF may solve the problems of yesterday well, an investor’s focus should instead be on solving the potential problems of tomorrow.

Three steps to an informed judgment


Because the indexes tracked by strategic beta ETFs are by design somewhat exotic, effective assessment of them calls for some digging:

  1. Investors first have to understand who the index designer and asset manager are (they may not be the same people). They should have a clearly expressed investment philosophy and the expertise to enact it in practice.
  2. The properties of the portfolio should reflect the investment philosophy. Not only does the transparency of ETFs allows examination of the holdings to ensure that this is the case, it also measures such as active share relative to a cap-weighted benchmark or turnover can indicate whether an ETF is performing as designed.
  3. Performance can also be used to confirm that an index is doing its job. While short-term results shouldn’t be given too much sway, the index designer should be able to explain when and why an index will perform and when it might not.
     

One key aspect of performance shared with traditional passive management is tracking error. Like earlier cap-weighted index tracking funds, strategic beta ETFs should have minimal tracking error to their own indexes. Beware, though, the tracking error to the benchmark can be large and dynamic, it is by this differentiation that strategic beta adds value.

Made to measure


Strategic beta does not defy analysis, despite its novelty. Indeed, it has a lasting advantage over standard active manager due diligence. Strategic beta, after all, is rules-based. What an investor sees in straightforward, well thought-out index composition rules is what the investor will get. In that sense, strategic beta is relatively immune to the personnel changes, style drift and index hugging that can challenge actively managed mutual funds.

Learn more about ETF due diligence here.

DISCLOSURES

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be a recommendation for any specific investment product, strategy, plan feature or other purpose. Any examples used are generic, hypothetical and for illustration purposes only. Prior to making any investment or financial decisions, an investor should seek individualized advice from a personal financial, legal, tax and other professional advisors that take into account all of the particular facts and circumstances of an investor’s own situation.

Opinions and statements of market trends that are based on current market conditions constitute our judgment and are subject to change without notice. These views described may not be suitable for all investors. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations. Past performance is no guarantee of future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. ETF shares are bought and sold throughout the day on an exchange at market price (not NAV) through a brokerage account, and are not individually redeemed from the fund. Shares may only be redeemed directly from a fund by Authorized Participants, in very large creation/redemption units. For all products, brokerage commissions will reduce returns.

J.P. Morgan Asset Management is the marketing name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. J.P. Morgan Exchange-Traded Funds are distributed by SEI Investments Distribution Co, One Freedom Valley Dr., Oaks, PA 19456, which is not affiliated with JPMorgan Chase & Co. or any of its affiliates.

For additional disclosure 

For a longer discussion, please see our recent publication Strategic Beta’s due diligence dilemma (J.P. Morgan, April 2017).

[1] Morningstar.

[2] Morningstar.
J.P. Morgan Asset Management
Empowering Better Decisions
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See how ETFs differ from other investment vehicles, learn how to evaluate them, and discover how ETFs can be used effectively to achieve a diversity of investment strategies. ... Click for full bio