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A Quick History of Social Media Marketing: From 2003 to Today

Quick History of Social Media Marketing

Social media has arguably become digital marketing's biggest phenomenon – and it has happened in a hurry. From 2014-2016, global social media ad budgets almost doubled, increasing from $16 billion to $31 billion. By 2019, these numbers are slated to reach $50 billion – representing 20 percent of all online advertising.

When numbers like these are involved, marketers can better hone their strategies by arming themselves with knowledge; and this includes having a better understanding of the history of social media marketing – how it started, where it is now, where it's going, and how this happened so quickly.

 New to social media marketing?  Check out this comprehensive guide from our friends at G2 Crowd to get started in no time!


2003: The Launch of Facebook

Launch of Facebook

Although the first social media site, Six Degrees, debuted in 1997, it wasn't until the advent of LinkedIn in 2003 that marketers began to perceive the potential for advertising on social media. As the Internet's first business-oriented social media site, LinkedIn garnered 1.7 million members within its first two years, proving that social media wasn't just for recreation anymore.

However, advertising has always been a relatively small percentage of LinkedIn's revenue. Rather, it took the 2003 launch of Facebook, a website created solely for social networking, to produce an online marketing phenomenon.

Facebook was initially launched in February, 2004 as a social networking site strictly for college students; but by September, 2006 the website was inviting anyone over 13 with an email address to join. In 2004, Facebook founder Mark Zuckerberg told The Harvard Crimson that it would be "nice in the future to get some ads going to offset the cost of the servers."

An online timeline for Facebook shows that its first ad, which appeared in 2005, was for the gaming site Partypoker. Soon afterward, Apple came on board by sponsoring a Facebook group, paying one dollar for every member each month.

As Facebook began selling its first digital ads, another social media site suddenly appeared with an entirely new format – video.


2005: The YouTube Revolution

YouTube Revolution

With its 2005 launch, YouTube revolutionized the use, viewing and marketing of online videos. Just seven months after its December debut, YouTube was receiving 100 million views per day – numbers that made marketers sit up and take notice.

That same year, 2006, Facebook achieved its own marketing milestone, reaching $50 million in ad revenue. But while Facebook was celebrating its greatest success, a new social media site appeared – one which, to this day, is still considered to be one of Facebook's greatest rivals.


2006: The Twitter Generation

Twitter Generation

From the moment of its launching in 2006, Twitter made it obvious that it wasn't planning to emulate Facebook, either in formatting or marketing. Three years after its debut, co-founder Biz Stone was still insisting that Twitter wasn't interested in "traditional web banner advertising," and for the first several years, advertising and marketing didn't seem to be a major focus for the site.

In the meantime, 2007 saw the advent of Facebook's Marketplace and Facebook Ads, as well as a mobile version for the site. For YouTube, 2007 marked the debut of InVideo Ads. Within the next two years, YouTube began showing ads before content, as well as full programs from major networks and studios such as CBS and MGM. By 2009, YouTube had reached one billion views per day.


2010-2015: From Static to Interactive to Video

From Static to Video

While it was obvious that the site had great potential for generating revenues through paid-for tweeting, it wasn't until 2010 that Twitter reached its first marketing milestone by launching its first paid advertising venue, Promoted Tweets. This marked the beginning of Twitter's real marketing push, which was given an even bigger boost two years later with the launch of Twitter Cards, which gave users the option to add videos, photos and links within Tweets.

Likewise, 2010 also marked the debut of two more major social media sites, Pinterest and Instagram, with Snapchat following in 2012. What's significant about all three is that, unlike Facebook and Twitter, they followed YouTube's lead in proposing that a picture is worth a thousand words – but in their cases, they opted for still photography rather than video.

In 2013, Facebook caught up with the global demand for more video content, generated by YouTube, by offering its first video ads. Two years, later, in 2015, Facebook came full circle – from static content to live – by launching live streaming ads, a format that was adopted by Twitter a year later.

This brief overview shows the quick transition from static to video marketing content within less than a decade. Today, 51 percent of marketers worldwide say that video produces the best ROI – a number that's not surprising, considering that one-third of all daily online activity is spent in watching videos.


Today's Trends in Social Media: Shifts in Popularity, Privacy Concerns, Marketing Strategies and Innovations


The Move to Instagram

Since Instagram's debut in 2010, millions of social media users – teens in particular – have embraced the concept of sharing their life events through photos rather than the written word. According to a study in USA Today, researchers say that Instagram's quick rise to 800 million users a month reflects the fact that people tend to relax more with images rather than with text. Likewise, the study showed that a majority of users now prefer Instagram to Facebook – although Facebook still leads the pack with more than 2 billion users each month.


From Organic to Paid Reach

Within the last few years, as social media metrics tools have gotten more sophisticated, marketers have increasingly been transitioning from organic to paid reach platforms. At first, advertisers enjoyed the "cost-free" concept of organic reach; but improved metrics are demonstrating that a thousand hits or shares on a post – those so-called "vanity metrics" – don't necessarily convert to sales.

The game changed even more at the beginning of 2018, when Facebook began overhauling its newsfeed to prioritize content from family and friends over business-oriented content from brands and publishers. This was done in response to complaints from users who felt they were being drowned out by commercial content while trying to engage with their social network. According to Facebook, the move is necessary because unpaid, marketing-related posts from page owners now exceed the number of posts by regular users.

For marketers who rely upon these unpaid, organic posts in their campaigns, this may well mean less viewer exposure/engagement in the future. Experts also predict that, once businesses lose this unpaid exposure, they'll have to start paying more to retain their visibility – a visibility that they were getting for free before the algorithm change.

However, as Facebook, Twitter and other sites continue to roll out better tools for identifying and reaching target demographics, today's marketers are seeing more value than ever – as well as increased ROAS – in paid reach rather than organic posts.


The Advent of GDPR

With the new privacy regulations imposed by the European Union's General Data Protection Regulation (GDPR), personal data will be accessible by permission only. This means that marketers will have to get an individual's permission before using any personal or profile information for business/marketing purposes. Because of the GDPR's broad definition of "personal data," the term can be used to include any identifiers on social media posts. However, the good news is that, under an existing legislation called the EU-US Privacy Shield, legal protections will be covered as long as users agree to the social media network's terms and conditions, which should include a clear privacy notice.


Innovations in Social Media Marketing: AI, Lookalike Audiences and Social Media Influencers

The impact of artificial intelligence (AI) on social media marketing can't be overstated. Today's AI solutions have the ability to leverage massive data sets (big data) to discern patterns, which can in turn identify and predict the behaviors of a target demographic. When put in the context of social media, this can result in highly-segmented target marketing, finely honed down to factors such as personal profile data (age and gender), lifestyle, geography and past shopping activities.

Likewise, today's marketers are also using social media influencers – power users such as web celebrities and popular bloggers – to endorse and support their products and services via social media posts and videos.

Another valuable social media tool is audience lookalike marketing, in which marketers create a customized target audience profile for a social media site, and the site then locates users who match that profile. Once these "lookalike" users are identified and located, the site then exposes them to the marketer's social ads.

As for the future, anyone in marketing will agree that it seems as if a new social media innovation or solution comes out virtually every month, making the possibilities, power and potential of social media marketing seem limitless. With tools such as AI-powered machine learning, automation and big data analytics constantly evolving and improving, marketers will continue to be able to successfully leverage social media – and its latest innovations – to reach and engage their target customers.


Also read:

Your Guide to Keeping Social Media Ads Fresh – and Effective

Social Video Marketing: What are the Rules of Engagement?

One Easy Way for your Facebook Ad to Win the Click-through Lottery

Russell Chua
Russell Chua
Content Marketer at Creadits

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