IBM just published a post-mortem analysis of digital transactions on Black Friday 2012, and while the results are quite good for retailers they conclude that social media generated negligible traffic or direct sales for retailers. For people highly invested in their social platforms, this is quite disappointing data.
IBM reports that sales on Thursday and Friday showed double-digit growth in online sales (+17% and +21% respectively). Yet of that traffic, less than 1% was driven by Facebook and Twitter (0.68% and 0% respectively), and less than half of referred social media traffic converted into sales.
So what does this mean about the effectiveness of social media channels to drive business?
Are expectations for social media too high?
Twitter wants you to know how effective their platform is to drive sales. Facebook wants you to know that their platform is agile enough for you to advertise almost anywhere you’d like to, to anyone you’d like to. People go out of their way to make very convoluted calculations of social media ROI.
With this backdrop of voices perpetuating an inappropriate context social media platforms, I wonder if maybe expectations need to be adjusted? Third party studies are consistently finding fault in the notion that social media is a vehicle for direct sales, yet the mythology lingers. And I suspect that’s to the detriment of smaller businesses who don’t aren’t sufficiently diversified in their other marketing efforts.
Should we reconsider what we measure?
What if we make these two assumptions about social media:
1. Social media is a valuable marketing tool because it offers an opportunity for brands to interact with users in a unique way.
2. Social media is not effective for direct sales
If these are true – how valuable is a Facebook Like or a Twitter follower? What is the value of a retweet? Or of a shared inbound marketing post? Or of a pin? Organic measures of success on social media platforms are very poor measurements of social media’s effectiveness.
The best KPIs for social media would be how effectively these channels can convert social fans to email subscribers (or whatever is generating actual sales). Trying to measure “return on investment” of social media as a standalone marketing vehicle may not very helpful (unless you like your ROI red), but in the context of a greater marketing effort social media makes a lot of sense.
As a somewhat relevant aside, Joanna Lord of SEOMoz wrote a phenomenal piece today differentiating web analytics from marketing analytics. It’s a really thoughtful post that offers some good questions and analysis around measuring marketing effectiveness.
What do you think: why was social media such a poor driver of traffic and sales on Black Friday? Is there a more meaningful way to capture its impact on sales than referrals and direct sales? Will it become more of a factor in the future?