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 â€” 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