Facebook advertising, as well as other forms of social media advertising, is “grossly underpriced” and brands are “leaving money at the table” if they’re not spending up big on these platforms, said Gary Vaynerchuk.
“If you do not spend a disproportionate amount of your time, over the next 24 months, massively figuring out Facebook and Instagram, you will leave an enormous amount of money on the table,” the entrepreneur and internet-famous marketer said.
“You may leave enough money on the table that it doesn’t allow you to continue your business if the macro-economic climate changes.”
Take advantage of the current situation while social media advertising is so cheap, Vaynerchuk told the crowd at a recent Business Squared event in Melbourne.
“There are moments in our history – when we transitioned from the radio to the television, when the internet first emerged, when cable television first emerged – where we had grossly underpriced attention… but the market hasn’t adjusted to the reality of our attention.”
Vaynerchuk said we are now living through a time of underpriced attention, with social media, but too many businesses and brands are wasting time and not taking full advantage of it.
“The amount of people who have opinions on Facebook ads, Snapchat ads and Instagram ads but have never run them is laughable. The amount of people who spent $1000 on a Facebook ad campaign that didn’t work and they deemed the entire thing to not work, is laughable.
“Just because you haven’t figured it out yet, or it’s not working to the extreme, doesn’t mean it’s not actually happening.”
If you’re not advertising on social media, you’re leaving money on the table
“When I hear the story of my narrative of building a $3 million to $60 million business (Wine Library), it’s super great but I always see it as a huge disappointment,” Vaynerchuk said.
“Even though I built one of the largest wine stores in the country, I left a lot of money on the table because I still was doing direct mail, newspaper ads, radio ads and billboards on the highway.
“What I should’ve been doing from 2002 to 2005 was putting all of the money into Google AdWords, not a lot, like I was doing. I see that as a great $30 – $50 million, maybe even a $100 million, miss on my part because I had the best hand – it was called Google AdWords in the early 2000s – I just didn’t squeeze it hard enough.”
Vaynerchuk said he sees the same thing happening today with social media advertising.
He implored everyone that is running a business to get serious about social media advertising and become “unbelievably educated” in how to run Facebook ads.
“For the people who do not squeeze it during this era, they will regret it tremendously. Because what is going to happen over the next five years, is the biggest brains in the world are going to finally spend enough money on Facebook – the proper amount they should be spending. And when BMW, and Coca-Cola and Toyota spend the tens of millions of dollars on Facebook that they’re not right now, the prices on the auction marketplace that you buy ads on will go up. It’s very simple: supply and demand,” he said.
“I used to pay five cents a click for ‘pinot noir’ and ‘chardonnay’ (on AdWords) – those words aren’t five cents any more.
“You can reach a 40-year-old woman into fitness in Brisbane right now for $4 CPMs (cost per thousand impressions) but when it’s $94 CPMs in five years, and people don’t click ads in Facebook anymore, you’ll be really sad that you sat on your hands during this era.”
There is no ‘social media’
According to Vaynerchuk, social media is merely a label.
“There is no social media. It’s a slang term. It’s a term that we came up with for, you know, the current state of the internet,” he said.
“When you hear the word social media, (make sure) it stops going from this ‘thing’ that’s emerging, this ‘thing’ that’s for your 14-year-olds, this ‘thing’ that’s coming and will be big one day.
“Over 50 per cent of the time humans spend on a cell phone is spent on what is deemed a social network or on a content site like YouTube or LinkedIn. I don’t know if you’ve been paying attention; people are spending a lot of time on their phones.”
Storytelling is key
Vaynerchuk described social media as a platform in which we communicate, just as we have done on other platforms for many years.
“I hope you understand that we are going through a massive attention arbitrage,” he said.
“The cost to produce content in video or audio form, and then distribute it, used to cost millions of dollars. You literally had to have hundreds of thousands of dollars in equipment, hundreds of thousands of dollars in salaried employees, and then millions of dollars in infrastructure and distribution costs, to get in front of people.
“The key is, everybody here for their business needs to figure out how they are going to story tell. It breaks down into the written word, audio and video – the newspaper, the radio, the television or a blog, a podcast or a vlog. It (the medium) has always been the same.”
Vaynerchuk stressed the importance of understanding how your business can best communicate, be that through the written word, audio or video. He advised getting to all three mediums as quickly as possible, or choose one in the beginning if you can’t afford the infrastructure or people to support the other two.
“If you’re not talking to the world on a daily basis on one of the six or seven most important social networks… every second that’s going by, you’re losing ground.”