It’s time to have a serious talk about paid ads. When it comes to marketing, learning to adapt your strategy to what is currently working is crucial to seeing regular growth. For a time, paid ads were one of the top marketing strategies. Now, brands are using more word-of-mouth tactics like influencer marketing.
In the digital world, trends change at light speed. What worked last year fades out tomorrow. And eventually, even the top-performing solutions will lose their efficacy as the landscape shifts.
We’re seeing this today as brands drift away from relying heavily on paid digital ads as a primary focus. Consumers are demanding more transparency. Social media has given us access to brands in a way that we’ve never had before, and people are using that access to test brands for authenticity.
Trust in paid ads has drastically decreased as people want to hear about genuine brand experiences from other consumers. A 2021 study by Magna and IPG Mediahub found that of people surveyed in the USA and Australia, only 10% said they completely trust online ads.
Alongside distrust, people want to see content that they’ve consented to see. Instagram is facing backlash from users frustrated with the app’s changes - causing feeds to be filled with more and more ads and content from accounts they don’t follow, drowning out posts from accounts they’ve actively chosen to follow. The backlash became so severe that Adam Mosseri, head of Instagram, made a public statement declaring their intent to step back and revisit the changes to the platform.
Finally, the cost of everything is increasing - ads included. Considering ads are becoming less targeted with the loss of third-party cookies, it’s not uncalled for to consider if the rising costs are worth the return anymore.
Brands must ask themselves if the ROI they are achieving with paid ads is at a favourable level. But if notable reliance on paid ads is becoming a thing of the past, what are the most effective alternatives?
Are Paid Ads Obsolete in an Influencer Marketing World?:
Pros of Paid Ads in 2022
Regardless of the state of paid digital advertising, it’s not time to completely throw the strategy out the window yet. Nor will giving up paid ads completely likely ever be the answer. The truth is that paid ads still have major benefits, and using them is a key aspect of any marketing strategy.
Bop to the Top of Google
Paid ads have the power to push you to the top; especially when it comes to search engines. If your brand is facing stiff competition, getting to the first page of Google search results can be an arduous task - never mind the top position. A brand with a 2-year-old website is going to struggle to rank above a brand with a website that’s been amassing content and authority for 10+ years and is targeting the same audience and keywords.
Paid ads are a solution to this, giving you the opportunity to appear above your competitors in search engine results. According to PowerTraffic, the top three paid search results on Google get 46% of the total clicks on the page. This allows you to drive higher volumes of relevant traffic to your website quicker and gain more exposure and awareness of your brand.
Blend in With Social Media Content
Using native ads is a fantastic way for brands to slide into their audiences’ social media feeds. You’re meeting your audience where they’re at, displaying ads in a way that mimics the content they’re used to consuming. Even with a tag or disclaimer announcing that your content is sponsored, many users won’t notice that your ad is an ad immediately.
As long as you use your content and copy effectively, native ads can offer a seamless experience for your audience, especially on social media platforms that encourage scrolling through tons of content in a short period of time such as Instagram and TikTok.
Cons of Paid Ads in 2022
Unfortunately, there are a number of issues facing brands using paid ads in their marketing strategy. These issues greatly lower the efficacy of paid, online ads. You experience fewer of the benefits, or reaching those benefits costs more than they’re worth.
Turn a Blind Eye
The distrust people feel towards paid ads means many consumers put on blinders when presented with an ad. Some users scroll past the sponsored results on search engines refusing to click them. When it comes to search engine ads, it is incredibly important to add true value to the search results. Otherwise, you risk losing trust with the very people you’re attempting to connect with.
Annoyed with ads interrupting their online experience, especially sites that have abused ad space in the past with neverending popups, 37% of global internet users now use ad-blocking technology to prevent brands from bombarding them with sponsored content.
Unfortunately, this can affect well-meaning brands from getting through to their audience as well. There are ways to get through ad blockers, but as technology advances and more people take advantage of them, the possibility that it will disrupt your marketing strategy rises.
Missing the Mark
Paid ads once offered a way to hyper-target your audience. While targeting with paid ads isn’t completely defunct yet, the ability to do so effectively is decreasing as privacy concerns increase. Consumers want control over their data, and without information on users, ads can’t target them.
Many people are content to give demographic information but choose to block apps and websites from tracking their behaviour. Ads give you the ability to target these consumers with demographic information as well as those who haven’t chosen to opt out of other data sharing. However, as more people take advantage of these privacy settings, targeting through ads becomes less effective.
The Price Is(n’t) Right
Ads are expensive. The cost of ads has been steadily increasing, meaning that even if you’re generating leads or making sales through your ads, your cost per lead or customer acquisition cost is rising. In fact, according to Business Insider, measurement firm, Measured reports that TikTok’s CPM has gone up a whopping 70% YoY in 2022.
Higher prices mean less budget wiggle-room when it comes to trialling new ads and adjusting based on results. It also means that you have to make even more sales than before to avoid a decreased ROI.
Ads also rely on your budget to remain in existence. Unlike content, as soon as you stop paying for an ad, the post is no longer live.
Influencer Marketing as an Alternative to Paid Ads
How can brands make sure they’re still getting their content out on social media in a way that will drive sales and increase brand awareness without relying completely on paid advertisements? The most popular option appears to be supplementing paid ads with influencer marketing.
Under the Influence
Influencer marketing has been a popular strategy for years. Brands work with either celebrities or social media personalities to create content in exchange for payment. Oftentimes this payment consists of free products and cash.
The practice has become so widespread that being an influencer is now considered a viable career path for many social media savvy content creators. But with popularity, a number of pitfalls have immerged. These cracks in the infrastructure of influencer marketing are uncannily similar to the issues plaguing paid ads: the rising cost no longer being enough to provide a satisfactory ROI and consumers losing trust in large influencers due to shady practices and inauthentic sponsorships.
Can People Trust Influencers?
Unfortunately, many people want to be an influencer and will take on partnerships with products they don’t truly stand behind in order to do so. In 2019, the BBC reported that three reality tv celebrities were asked to promote a new drink containing a deadly component: cyanide. They were informed that they would be unable to try out the drink before promoting it, and while one agent did protest, all were filmed talking about how much they loved the drink and encouraging their fans to try it out.
One admitted to having never tried another product she had famously promoted in the past - a weight loss coffee she claimed had helped her lose a considerable amount of weight. This is a major problem when you consider that a report by Influence.co revealed that 82% of surveyed consumers want to know if an influencer has used the product they’re promoting.
Another major issue with influencer marketing is accounts that have bought their followers or likes. This is a strategy many people use to boost their careers as influencers. But the results speak for themselves with low engagement rates that lead to few true conversions.
While it may be starting to sound like there’s no way to win, brands have found another solution: micro- and nano-influencers.
Bigger Isn’t Necessarily Better
Micro-influencers are generally agreed upon to be influencers with follower counts of 10-50k. Likewise, nano-influencers have 1-10k followers.
Why are fewer followers better? Many micro-influencers have worked hard to truly build their community. They interact with their followers and have the audience they do because they truly offer value. They didn’t buy their followers. They built connections and relationships.
Audiences also trust micro- and nano-influencers more because they often promote a smaller range of products (only brands they truly love) and they seem more relatable and in touch than many creators with millions of followers. Micro-influencers feel more like a friend than a celebrity. Whereas large influencers are becoming a new type of celebrity - feeling unreachable and less like your everyday person.
And when it comes to trust over paid ads, there’s little competition. Micro-influencers hold so much marketing power that according to Shopify, 77% of marketers say micro-influencers are their ideal influencers.
Curated Content by Creators
Creator marketing allows you to build up a library of user-generated content. Finding micro-influencers who already love your brand is a gold mine. Micro-influencers also tend to have fewer partnerships on the go, allowing them to partner with your brand long-term. And when an audience sees that their favourite creators talk about your brand again and again, rather than just once, more trust is built.
Consumers want to see people like themselves using your products. A Stackla report showed that 79% of surveyed consumers’ purchasing decisions are impacted by user-generated content. Micro-influencers can provide you with this content. Videos, photos, and reviews by people who genuinely and regularly use your products are some of the most powerful forms of content you can access.
Always and Forever
Unlike ads, much of the content posted by micro-influencers will be floating around for the rest of internet eternity. Unless a micro-influencer purposely deletes a post after the campaign is over (in which case, it might be worth rethinking about continuing your partnership with said micro-influencer), the content they create will have the potential to keep converting.
Of course, as with any campaign, the conversion rate will likely decline as time goes on. Especially when it comes to social media where posts have a short shelf life and are quickly buried. But if you ensure micro-influencers are using the appropriate hashtags, their content has the potential to show up in searches for years to come.
Long-form content such as blog posts and detailed YouTube videos often continue receiving views and driving conversions consistently over time, especially if the creator behind them has authority within their niche community.
Better Bang for Your Buck
Ad costs are on the rise. From August 9 2021 to August 9 2022, the average CPM of a Facebook ad was $13.79*. For Instagram, the CPM in the last year was around $9.83*. Influencers are trying to make a living by promoting brands, causing prices to skyrocket to levels that are sometimes unaffordable to smaller brands. Mid-tier Instagram influencers start at an average of $500 per post, with mega-influencers charging $10k or more per post.
But micro-influencers are often either in the earlier stages of building an influencer career or creating content as a passion project on the side of their day job. This makes them far more affordable.
Many micro-influencers are happy to create content with a free product as compensation. This lowers costs over large influencers or paid ads considerably for brands. Micro-influencers feel they are getting the full retail value of the product while brands are only footing the cost of production and shipping.
Micro-influencers are often open to payment based on performance as well, such as being paid a certain amount of cash per like or comment on their post, rather than a flat fee. This tactic lowers the risk for brands, as they are guaranteeing a level of engagement with their payment.
*Average is updated regularly and may change slightly at the time of reading.
The affordability and accessibility of micro-influencers mean brands have the opportunity to work with many creators at once. And what’s better than one micro-influencer shouting about your brand online? A whole community of micro-influencers.
Building up a strong community of creators who love your brand is one of the most effective ways to get exposure and drive conversions. It improves customer retention and creates an exclusivity that draws more people in.
As brands continue investing in their community, they build stronger relationships with their most valuable customers. Maintaining these relationships ensures you have customers for life who not only purchase your products but encourage others to become customers as well.
So, Are Paid Ads Still Effective?
Paid ads will always have their place. They work especially well in specific channels like search engines for increased visibility and driving new traffic to your website. But they may not be the most effective form of digital marketing anymore.
Influencer marketing, especially with micro-influencers and nano-influencers allows you to get in front of the right audience while building and maintaining relationships with your biggest customers, followers, and fans.
Industry opinion and multiple datasets state that the value of social posts from authentic creators is significantly higher than the value of the equivalent reach on paid social media ads. Looking at Influencer Marketing Hub’s Benchmark Report for 2022, we see that the average ROAS on influencer marketing is 578%, a return of $5.78 per $1 spent.
It’s worth considering pairing influencer marketing with paid ads to increase efficacy. Using photos and videos generated by your influencer marketing community in your ads can boost trustworthiness and lower costs as you repurpose valuable content.
This strategy builds trust in an increasingly sceptical climate through authentic content created by people who genuinely love your brand.
To learn more about how you can find and build long-term relationships with micro-influencers for your brand, book a demo of our micro-influencer management platform.