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Little Impact From Social Media On Sales
It is often argued that social media helps companies reach out to their customers. The more they reach out, the more money there is to be made. However, USA Today says a new study is arguing that social media has no real effect at all.
The report, a collaboration between Forrester Research and GSI Commerce, analyzed data captured from online retailers between November 12 and December 20, 2010. The research shows that social media rarely leads directly to purchases online — data indicates that less than 2% of orders were the result of shoppers coming from a social network. The report found email and search advertising were much more effective vehicles for turning browsers into buyers.
“The best analogy is in the South, a lot of people go to church on Sunday,” says Fiona Dias, executive vice president of strategy and marketing for GSI Commerce. “If you go with the theory that you should market where the people are, then you should be running off to market during church services. Facebook has the same analogy. Buying things from retailers is maybe 10th on the list of things they want to do on Facebook.”
Dias says social media outreach is somewhat effective for distributing news about short-term deals. In that case, 5% to 7% of purchases are influenced by social media activity.
Photo by Kevin Krejci
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Diana on May 3rd, 2011 6:08 am
USA Today reports. I believe that a print entity of course will report that social media is not working. I know it works. Friends ask where do I find X? Or I have asked did you like X? Also social media is not only about obtaining a buying customer, it is about obtaining support. The support can be financial, volunteer labor, or a vote.
Angela Shupe on May 3rd, 2011 6:49 am
Diana – I agree this is something that needs looked at some more. I have heard too many good things about social media and the positive impact it has had on business. I suspect some entrepreneurs would also feel the study was off the mark from their own experiences.
Darren Wilson on May 3rd, 2011 7:15 am
I think this study/article totally misses the point of the importance of SM in buying decisions: “Buying things from retailers is maybe 10th on the list of things they want to do on Facebook.” No kidding? People don’t use Twitter and Facebook as their e-commerce portal? You could entirely eliminate FB’s ads and it would still be important as a tool by which people research their buying decision, particularly for local, non-standardized products (like a Blu_Ray player). But even then I think it’s powerful – the last two big ticket items I purchased (a flat panel TV and DSLR camera) only after reaching out to friends for advice online. The more important, the more local, and the more distinct buying decisions (like choosing a lawn service or a lawyer), the more important social media will be, IMO.
Sherry on May 3rd, 2011 7:30 am
I think there are pros and cons to this subject. I still do online research the “old” way more, with Google searches initially, and then branch out to the manufacturers sites, but that may just be my way of doing research on a product or subject. All the new media and portability of the iphone and Android systems will continue to change the SM landscape I believe
Terje Sannarnes on May 23rd, 2011 4:28 am
First of all, I would like to say that social media can be a powerful marketing tool if a correct strategy is selected. The point is that there are a lot of other important factors (like pricing policy, customer service, product quality), which can also make impact on sales. They also have to be taken into consideration by an entrepreneur.
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