Research: Social Media Influences Only 1% of Online Transactions
Social media as a marketing tool has it cheerleaders and its detracters.The former point out that it’s impossible to ignore media which such a large proportion of the population spend such a significant amount of their time on.The latter counter with the argument that few brands have been able to demonstrate a return on investment from their social media activity.Most marketers are clearly more convinced by the cheerleading camp. As an example, a recent survey by eConsultancy and Adobe found that 67% of marketers believed Facebook to be an essential part of their marketing strategy.But new research from Forrester suggests that social media should be regarded by marketers as peripheral rather than essential – at least when it comes to generating online sales.The Forrester study, conducted in association with GSI Commerce, examined 77,000 online transactions made between 1 and 14 April 2012. Only 1% of those transactions could be traced back to social networks like Facebook and Pinterest. Instead, the traditional tools of the digital marketer were found to deliver the results.For example, direct visits to ecommerce sites accounted for 30% of all transactions, highlighting the importance of promoting ecommerce URLs as widely as possible. Organic search and paid search were responsible for 39% of transactions from new customers. And email was found to be the best media for generating repeat business – being responsible for a 1/3 of all transactions from existing customers.There are some inadequacies in the research, however. For example, although the analysis is based on attribution rather than last click, the attribution window chosen of 30 days may have been too narrow to measure the full effects of social media, which is more likely to influence decisions at the top of the purchase funnel.The narrow date range chosen may also have introduced a bias towards certain types of products. And it would be good to understand how the influence of social media varied between different types of product – particularly between highly ‘social’ lower involvement products, like fashion, and higher involvement purchases like holidays.And it’s clear Forrester weren’t able to measure the full influence of social media. Their figures included all social media activity that ‘could be tracked back to trackable social links’ but we’re unsure whether this included all those that merely consumed social media posts and advertising, as opposed to those that interacted with them. And it’s unlikely that the friends of fans, who would have experienced the viral effects of their friends’ activity, would have been included in the analysis.And, of course, the analysis looks purely at online sales – not what was happening offline.However, such a stark (and low) figure should give marketers pause for thought.At first, the research also doesn’t seem to square with a recent study from comScore that demonstrated, for fashion brands at least, that Facebook fans and their friends, were much more likely to not only visit a brand’s site but to purchase from it too.But perhaps the problem is one of volume. Do brands have enough followers on social media to generate more than a tiny fraction of their overall sales directly from social media channels – especially when you consider that, on average, only 16% of Facebook followers will see any given post?Most brands will have much larger email lists than social media followings. Will ‘following’ a brand become as mainstream a pursuit as signing up for emails? If not, then social media may only directly drive a tiny fraction of sales. And using a social media property as a primary call to action would be a mistake. But that doesn’t mean it hasn’t got a significant role to play in brand’s marketing efforts.Perhaps social media marketing shouldn’t be focused on sales but more on engagement and advocacy. It’s an excellent tool for having conversations with customers and eliciting their opinions in an instantaneous and cost effective way.It’s also an excellent tool for involving clients with the brand and moving them up the loyalty ladder, from customer to advocate.However, its true power may lie in harnessing the power of those advocates to generate word of mouth amongst their peers – an impact that is driving direct sales but in a way that studies like Forrester’s won’t be able to measure.