Forrester Research recently released a study entitled “The Purchase Path Of Online Buyers In 2012.” The study is a post-mortem analysis of eCommerce consumer orders in April 2012, and offers tangible evidence (for the second year year in a row) that social media marketing tactics are not a particularly effective means to drive buying behavior.
What the study specifically discusses
The study points out the effectiveness of email and search engine marketing to drive sales for new and repeat customers. Because the study is designed around “last-click attribution,” they discuss the importance of multiple touchpoints leading up to the buying decision, but note that social media marketing is more of a long-term process (they also note that social tactics theoretically have more potential for smaller businesses).
For the two classifications of customer, they found that paid search is the most effective means to get new customers to buy, and email is the most effective means for repeat customers to buy.
This shouldn’t be surprising data
The Holy Grail of social media marketing is return on investment (ROI). Because positive ROI is rarely evident, many people calculate it strangely, fail to isolate it from larger marketing initiatives, or just don’t achieve it. There is oftentimes an expectation for profitability from a marketing activity like social media (although ironically Ad Age reports that 57% of CMOs don’t use ROI metrics to track their traditional media spends).
In a study separate from the Forrester study, Vocus and Duct Tape Marketing published “Path to Influence,” (embedded below) whose findings indicate that there is a large disconnect between what marketers expect social media to accomplish and what it actually accomplishes.
According to the Vocus study, small and medium sized businesses are spending over $800 a month on social media management tools. Also at odds with the Forrester findings: two-thirds of the businesses studied don’t see the necessity of large scale for their social efforts, more than two-thirds measure social media success by lead generation, and just under two-thirds quantify success by “Likes” and “Follows.” They also point out that more than 80% of the businesses that they sensed expect to increase their investment in social media for the future.
Clearly expectations are sky high for social media as a marketing tactic, despite its ineffectiveness to consistently deliver profit.
The effectiveness of email and search showcase their importance to inbound marketing efforts.
Face it: social media is sexy. It’s a little out of control, there’s a wild west element to it that makes participating in it rather fun. Email and search have been around a long time. And that’s the point. When I was young there was an ad on TV advocating seatbelt use that said that 80% of accidents happen within five miles of your home. I always thought that was a dumb statistic because you spend the majority of your driving time closest to your house.
Email and search are the tools that nearly everyone uses. Market on a social channel and a person can ignore you. Email them and they have to deal with the email (even if it’s just to delete it). Intuitively it makes sense that these channels would be more effective, but the extent that they are is rather surprising.
What are the flaws in the Forrester study?
Because of the scope of the study, timeframe and other limitations – this report is impeachable (particularly because every business is different). But the tactics that they identify as most effective (search, email, direct traffic) need to be considered and prioritized with social media as a part of a digital marketing strategy. Maybe even ABOVE social media.
Social media shouldn’t exist in a bubble. It needs to be integrated as a piece of a larger strategy. Campaigns needs to be structured not only to measure traffic driven to a site by social media, but how many email sign-ups are achieved from that traffic, or how often retargeted social referrals buy.
The end-all can’t be a “follow,” because a “follow” has negligible monetary value. Social media channels are clearly valuable though, and will continue to grow in value as these tools mature. It’s important for businesses and CMs to understand the limitations of these channels so that they’re not burdened by unrealistic expectations for them to drive business.