Social media marketing was once considered essential to the continued existence of any businesses, large or small, but today social media magic appears to be wearing off.

According to Bango’s “Board to Death” research — which surveyed over 200 business owners, founders and CEOs — 60% of business leadership says that the marketing impact of social media has been exaggerated.

More damning still, 62% also believe that too much marketing budget is being wasted on digital marketing activities that don’t deliver meaningful results.

It’s not just social media that’s coming under fire. From search engine advertising to pay-per-click ads, many in senior management are openly questioning the business impact of a whole range of digital marketing activities.

And they’re not wrong to do so. It’s estimated that over £26 billion worth of global marketing budgets are wasted on digital activities that don’t deliver. In fact, even the biggest players (namely Facebook and Google) have called into question the value that their own services are able to add.

In one study by Google, the search giant found that more than 56% of its search ads were never viewed, while only 5% of digital adverts convert into a meaningful purchase for businesses.

Why is digital marketing a busted flush for business?

So why is it that so many digital marketing campaigns fail to deliver?

One of the biggest problems is simply poor targeting. Social media giants like Facebook allow businesses to target individuals based on what they like, search for and share.

While this can give some indication of people’s interests, it’s actually a very poor indicator of buying intent. In short, what people search for, like and share is a weak indicator of what they plan to buy.

One reason for this is the changing way that people use social media. Where once, social media profiles were meant to be an accurate reflection of who we were as people, now they’ve become far more aspirational — and as a result, less dependable.

The person browsing 5-star villas in the Seychelles isn’t actually planning to book one. In fact, they’re not even planning a holiday. How we portray ourselves on social media has become exactly that — one image of who we might be, and nothing more insightful than that.

Now, this isn’t to say that the data isn’t valuable; we can still learn something about our customers from these browsing habits. But in terms of closing a sale (and justifying the money spent on digital marketing) businesses need something more more tangible and more dependable.

So, if what people like, search for and share isn’t a strong indicator of what they plan to buy, then what is?

Targeting based on purchase behaviours. 

Perhaps the only reliable indicator of what someone might buy in future, is what they’ve spent their money on before. The strongest indicator of interest in a product, or affinity for a brand, is the consumer’s willingness to spend their money on it.

Rather than targeting potential customers based on soft indicators such as what they like, search or share online, “purchase behaviour targeting” is becoming increasingly popular as a way to tie online marketing budgets to the business’ bottom line.

While platforms like Facebook can offer you their first party payment data to aid with purchase behaviour targeting, an even wider set of purchase data can be applied to online marketing campaigns by combining Facebook’s own user data with purchase data derived from reliable third party sources.

Already, the first online marketplaces have emerged that can provide purchase targeting data derived from the analysis of payment activity across billions of dollars of ecommerce activity. This ensures much more meaningful targeting, better linking social media and digital marketing activities to the business outcomes that matter.

With the right targeting, digital marketing can deliver meaningful business results; it can deliver conversions, it can deliver direct sales.

Sadly, when it comes to social, far too many businesses spend too much time ‘doing’ and not enough time on an effective targeting strategy. We’re all so busy chasing chickens, we forget to mend the fence.

If social media marketing is going to add real business value (and impress the CEO), we need to take the time to get our audience targeting right before we do anything else – and that strategy has to place purchase behaviour at its heart.

Targeting to get the results you want is a critical part of any social marketing campaign and the results that every business wants are more customers and more sales. Without the right targeting, the best marketing in the world is doomed to fail.

Anil Malhotra is Chief Marketing Officer of payments platform Bango, which uses purchase behaviour targeting technology to identify and target the most relevant audiences for marketers and app developers.