We all know by now that social media is a valuable part of any online marketer’s arsenal, but many believe that it has little to no value with regards to conversions. However, are various studies and ‘evidence’ that suggest social has no value taking into account social influence?
According to a study carried out by Market Force in 2012, 81% of US respondents said that they were influenced by friends when it came to making a purchase. Social media, of course, is where much of this influence takes place. So what’s the problem? It’s the fact that it’s not easy to measure how a buyer has been influenced on social during private conversations.
Further to this, an infographic from MobStac found that four in ten social media users have bought something online after sharing the product on Twitter, Facebook or Pinterest. The graphic also shows that US consumers are expected to spend around $367bn on the net by 2016.
Social media does provide a ROI; this is something that has been proven in numerous studies over the course of the past year or so. However, traditional marketers can’t use the tried and tested methods when it comes to calculating ROI and apply them to social media.
Brands Need to Understand the Value of Followers
Whilst many brands have now cottoned on to the idea that quality content is a good thing, what many still aren’t getting is that this should be supported with hooks.
- Promotional offers
- Viral content such as videos, memes etc.
These are the kind of things that ensure that once the brand has been ‘noticed’ by the fan or follower, they remain in the consciousness by offering further incentive to buy and ultimately, to brand loyalty.
Why is Social Still Discounted?
In 2013, the global ecommerce market surpassed $1 trillion and revenue generated by social accounted for $16.9bn and is predicted to rise to $30bn by 2015. So revenue from social is not only there, but it’s gathering pace and is likely to carry on doing so, as more and more businesses realise its value when it comes to reaching customers on a more ‘personal’ basis.
In an analysis of an ecommerce report by Monetate in 2013, Jay Baer said: “Social media is categorically NOT a meaningful source of direct traffic to ecommerce websites or of direct purchase conversions on those sites. In fact, social media represented just 1.55% of all commerce traffic, and a conversion rate of less than three-quarters of one percent (.71%). In short, “social commerce” is a unicorn, at least in terms of last-touch attribution.”
Last touch attribution basically means that visitors go to a website directly from a certain place, in this case from social media, and at 0.71%, that does seem pretty low. However, Jay does go on to say that the problem that social has is that it’s “additive pieces of the conversion funnel, rather than causative.”
He continues to mention that Forrester Research suggests that WOM marketing accounts for 80% of all purchase funnels. And of course WOM marketing, for the most part, takes place on social media.
(Source: Monetate Ecommerce Quarterly PDF)
The Monetate report slates social as a means for making a purchase really, but doesn’t account for WOM, as many studies and analytics don’t, which is inherently the problem with such research.
So How Do we Prove Social’s Involvement
It’s slightly tempting to say ‘well, just stop all social activity, suspend accounts and see the difference’, but this doesn’t work for everyone. Social media is something that gains traction gradually and there are 1000s of Facebook pages out there that pretty much run themselves, as the community that has been built is vibrant.
This is especially true of fan pages for TV shows or celebrities that have long since become too much for the admin. Whilst this might not hold strictly true for brands, it’s likely that even a page with little activity will still see interest and new followers if it’s not updated if the brand is well known enough.
We can look to analytics to see a certain amount of referral traffic of course, but that doesn’t account for WOM.
Acquisition of Klout Lends Clues
The recent acquisition of Klout by social media software firm Lithium may help marketers to get the information they need when it comes to gaining information on WOM marketing and its value with regard to social. Personally, I’ve never found Klout to be overly useful, so its evolution into a platform that offers content aggregation can only be a good thing. However, it’s the WOM numbers that Lithium are shouting about and they have produced an infographic that “prove word-of-mouth marketing works and it’s happening via social media”.
According to Lithium, WOM:
- Affects purchase behaviour with 50% of buying decisions being made by WOM
- Builds trust
- Increases reach massively
- Supports positive brand mentions
- Affects search engine results
Taking a look at the final point in the list, it’s thought that 25% of search results come from user-generated content on social media, when looking at the world’s 20 biggest brands. Reviews are important too, with 89% of consumers choosing to take the word of their peers over any other form of advertising by reading them.
So Social Media is Good for Ecommerce?
In a word, yes. Whilst it might be difficult to prove that people are driving conversions through social conversation, it’s not particularly difficult to see traffic coming from these sites. Traffic means interest and it’s something we all want more of, as the more we get, the more likely we are to sell a product.
It seems silly to recognise that social drives traffic and conversation, but to assume (due to unprovable metrics) that it leads to no conversions, even if Goals in Google Analytics are telling you otherwise.
(Source: Google Think Insights)
What many studies seem to be missing is that whilst you can measure engagement, followers, traffic to the site etc., you can’t measure what people say to each other in private. Social listening tools allow you to pick up brand mentions and of course you can also use shares to see how much interest a special offer is getting, but there’s only so far this will ever be taken due to privacy.
The entire marketing campaign has to be looked at as a whole, in order to see the effect that social has. Marketing should now take a holistic approach and not discount any channel as being ineffective, especially social media.
Bearing all of that in mind, if you’re the owner of an ecommerce site and are not yet convinced by social media and the power that it offers, then don’t give up on it, step it up a gear or two instead.