The Future Of Social Media Marketing: Less Players, With Better Technology, Competing For More Dollars

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Cooper Smith Sep. 16, 2013, 12:15 PM 1,521

BI Intelligence

There is no better window into the fast-changing world of social media marketing than Facebook's preferred marketing developer program. It has only been in existence for 18 months, and already there are over 260 such partners operating worldwide, helping brands plug into Facebook's ad platforms and parse performance. Within the program, there's an even more elite group of fourteen "strategic preferred marketing developers," or SPMDs.  Since they have privileged access, and often help Facebook develop ad products, these so-called SPMDs are arguably the best sources to turn to when trying to predict the future of social media as a high-tech marketing platform.
In a recent report, BI Intelligence interviewed executives at four leading SPMDs, who pointed to the key factors driving social media marketing's future, like the changing relationship between paid, owned and earned media. They saw consolidation in their area — the tech side of things, as opposed to the creative side — as inevitable, and believed only the marketing developers with the best technology would win out. As more brand dollars flow into social media, some firms will be able to build scale and others will lose the race and fall by the wayside.

• With over 260 PMDs all vying for the same pool of ad dollars, it is unlikely that they all will be able to remain in business. Our sources see industry consolidation via bankruptcies, mergers, and acquisitions.
• The key to this game is the technology. It's not about a flashy name and a reputation for social media knowledge. The best social media marketing specialists will have a great tech stack at their foundation. 
• PMDs should see a greater share of revenue come from software and technology licensing, or software-as-a-service.
• Already, one prominent PMD has folded after failing to reach sustainability. Syncapse was overly dependent on a single client, BlackBerry. And it had not achieved any significant revenue figures for its software package. 
• The lessons for social media marketing specialists? Diversify your client base, and build your company on a foundation of great technology, not fee-skimming. 
• Other social media networks like Twitter and Pinterest will build out schemes similar to Facebook's PMD ecosystem, and push agencies and brands to connect with their ad solutions via these partners. 

Here are some of the other insights gleaned from our conversations with Facebook's strategic marketing partners:

• Moving beyond last-click attribution: One Adobe client, a hospitality and entertainment group, realized their apps were driving sales through other online and offline channels. They only realized this once they stopped obsessing on the last click before a sale, and tracked customers across channels. 
• Pre-Testing Paid Media: Other elite Facebook marketing partners like Brand Networks and Adaptly understand that owned and earned media isn't just valuable in and of itself. It's also valuable as a source of analytics and data that will hint at what types of content will work as paid media. One airline brand using this technique saw total reach more than double to 63% of its targeted fans. 
• Measuring Quality Of Engagement: SPMDs understand that the best metrics don't just measure quality, but quantity too. SPMDs have the best technology and interfaces for sifting through data. 
• Understanding Facebook Activity In Emerging Markets: SPMDs and PMDs more broadly can be marketers' field experts, sensitizing them to seasonal, cultural, and local economic factors.
• Influencing Facebook Product Development: SPMDs have influence at Facebook and have pushed Facebook to make many needed changes such as streamlining its paid media ad product line.

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