Social Media Marketing Getting Ineffective?! Using McKinsey’s SCQA Analysis to Explain

Many brand owners and e-commerce businesses have heard about the "disappearance of advertising dividends" in this era. Does this really mean that traditional advertising no longer works effectively? Do companies that once survived by chasing traffic really need to change their marketing strategies? Let’s analyze the problems everyone is facing today using the SCQA method from the internationally renowned consulting firm McKinsey:

S - Situation

‍Online advertising has become saturated because most people who use smartphones already have them, and most internet users are already online. There are no longer large numbers of new customers entering the entire traffic pool. With the rise of privacy policies, Apple took the lead in limiting user data tracking, hiding most users’ browsing trails. Google’s use of cookies is also expected to be phased out gradually next year. Many large data-driven marketing companies specializing in Data Science have been forced to transform, no longer able to collect all third-party precise customer data directly, and instead shifting to analyze first-party data, meaning they need to get sales data directly from companies. Influencer follower inflation is occurring—five years ago, having 10,000 followers on Instagram was impressive; now, influencers with over 10,000 followers are everywhere.

C - Complication

‍Most online advertising operates via a “bidding mechanism,” where advertisers set prices to compete for the same traffic. However, as the overall internet no longer has large influxes of new users, advertisers have to keep raising their bids, yet the results remain nearly unchanged. This makes the traffic market a “perfectly competitive market,” where advertisers have to increase their ad budgets until profits are almost zero. The biggest winners end up being the advertising platforms. First-party data can only segment customers roughly, lacking the precision of third-party data that can pinpoint individual preferences. Recently, it’s been discovered that no matter how popular an influencer is, many buy followers and likes because these numbers determine their sponsorship fees. Advertisers using these metrics are increasingly inaccurate; a large portion of their spending might only be seen by bots rather than real potential customers. With follower inflation, fake follower counts, and consumers increasingly disliking “inauthenticity,” influencer marketing is becoming less favorable for advertisers.

Q - Question

How can advertisers efficiently allocate their budgets in an online advertising market that is becoming saturated?
How can brands precisely target audiences when tracking individual customer data is becoming impossible?
How can sponsored content be effectively placed amid influencer follower inflation?

A - Answer

Try emerging platforms where user numbers are still growing and advertisers have not yet saturated the market, making bidding more favorable for advertisers. Examples include Xiaohongshu (Little Red Book) and Douyin (TikTok China).
Use word-of-mouth marketing by placing ads on relevant forums where people interested in the brand story or product category naturally click through. Use headlines to filter the audience.
Employ influencer audience analysis tools to analyze engagement rates, likes-to-comments ratios, comprehensive audience scores, and fake account proportions. This can help filter out influencers with many fake followers and also assess the portion of genuine followers who actively engage, removing those who simply follow but don’t view content.
Moreover, understanding an influencer’s fake follower ratio can be used as a bargaining chip in price negotiations, since many influencers base their fees on follower counts. Adjusting for fake accounts lets advertisers negotiate based on more accurate follower numbers.

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In this rapidly changing marketing environment, the most effective marketing methods are always evolving. Without keeping up with trends, marketing budgets are bound to be wasted. Only by continuously updating strategies and experimenting with various marketing approaches can you spend money wisely and catch the wave of new marketing trends.

Social Media Marketing Getting Ineffective?! Using McKinsey’s SCQA Analysis to Explain

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