Study: Social tactics are largely ineffective in driving sales



Contributing Writer
Photo:Wireless 2 Credit: Gabriella Fabbri


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.

 

Photo Credit

 

Jim Dougherty

Jim Dougherty

Writer and chief of miscellany at leaderswest.com

I aspire to give people something to think about rather than tell them what to do. My favorite Google Alert is “social media research,” I am increasingly compelled by Gen Z, and I appreciate good writers agnostic of where they write. At one time I was Kred’s 12th most influential social media blogger and Klout’s most influential person on the topic of David Hasselhoff. Transplant from Seattle living in Cincinnati. Haven’t entirely adopted the local sports teams yet.

Jim Dougherty

@jimdougherty

Writer about social media and tech at Leaders West, I also tweet as @leaderswest.

Infographic: How to optimize photos for Facebook’s News Feed http://t.co/6OkhbTRkb0 – 15 hours ago

Jim Dougherty

Jim Dougherty

  • http://barrettrossie.com/ Barrett Rossie

    I’m not an expert by any means, but it seems that there’s a lot of weight in your last section on flaws in the study. I bet that, in some cases, you could demonstrate ROI from social in filling the sales funnel, if not necessarily the last step.

    At any rate, interesting study and useful, even if it only reminds people not to forget search (and the elements that go into it) and email.

  • jimdougherty

    You’re absolutely right Barrett. I’m a little skewed by the barrage of content that promises the moon with social media. It’s not a responsible point of view, and one that I may have overcompensated for in my writing. I don’t think you can judge the validity of anything based upon one study, but as flawed as this study could be I see much greater flaws in many studies and posts purporting ROI on social media. Thanks for reading, commenting and pointing out my blind spots! Cheers!

  • http://twitter.com/Frank_Strong Frank Strong

    Great piece Jim and couldn’t agree more with this, “Social media shouldn’t exist in a bubble. It needs to be integrated as a piece of a larger strategy.” However, I didn’t get the sense from the Vocus/Duct Tape study that expectations exceeded results overall; clearly there are some respondents that felt that way, but I was surprised at how well SMBs overall were focused on results like sales and measuring them.

  • jimdougherty

    Thanks Frank for reading and commenting. I’ve been struggling to give the Vocus study proper treatment as I think it has some important insight to offer. My point was that the perception of the small and mid-sized businesses in the Vocus study seem much more optimistic about social media than the Forrester findings show. As a stand-alone piece, the Vocus study has a lot of depth. Understanding that 3/4 of $5-$20 million businesses make social media an additional function of marketing and investing about $10K in it annually offers a benchmark that most social media studies don’t provide (they focus on the Fords and Coca-Colas of the world). But beyond that, the Forrester study (as well as others) show the necessity for large-scale social media channels and a large portion of the respondents to the Vocus study indicated that size didn’t matter (slide 9). I also thought that this insight that social media accounted for a 1/3 of marketing is either inaccurate or inefficient (slide 13). Additionally, the measurements that the Vocus respondents purported to use didn’t have correlation with a buying action (slide 22) – and that’s one of the key takeaways of the Forrester study. I think both studies have merit and to your point I’m 100% positive that I didn’t give the Vocus study the attention it deserves. It has very important insights into an underrepresented point-of-view. Thanks again Frank!

  • http://dragonsearchmarketing.com/ Ric Dragon

    The Vocus study seems to be based on the self-reporting of companies (based on polling). If those businesses aren’t measuring the deeper metrics that contribute to ROMI, they’d hardly be reliable sources. Studies like this based on polls hardly seem reliable. But love the discussion, Jim!

  • http://barrettrossie.com/ Barrett Rossie

    Oh gosh… I wouldn’t say you have blind spots– quite the opposite. Very balanced presentation.

  • jimdougherty

    Thanks Ric! I agree with you on the Vocus study, but think the insight of how these businesses perceive, staff and measure social media is telling about the expectations versus deliverables. I tend to discount many opinion polls that measure complex topics like this, but think the Vocus study as a pulse of how businesses are using social media as a marketing vehicle is really insightful! Thanks so much for reading and commenting, I admire your writing and am grateful that you took the time!

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