Does social media contribute to sales, or not?

There is a great deal of ongoing debate about the role of social media, how to measure it, understanding it’s value in the overall digital marketing mix and it’s relevance – often all summed up in the frustrated cry of “How much is a Facebook LIKE worth”. We’re working with a number of different clients looking at how to evaluate this in a range of ways, and it’s an area that the digital industry is furiously beavering away at.

 

However some of the more sensible approaches to this are undermined by stories like this one on Smart Company – Social media not leading to sales, new research reveals.

Unfortunately I haven’t managed to track down the Forrester report that this article is based on, but the methodology seems pretty suspect. If they’re saying that 20% of the purchases come from direct sales, and the most significant other drivers of traffic are organic and paid search, it would appear that they’re using last click attribution – i.e. the last click that the user made to get to the site before making a purchase is the one that is credited with the sale – and therefore is assumed to have moved the customer through the entire purchase process.

Based on everything we know about purchasing behaviour and consumer decision making processes, this is completely flawed for nearly all types of purchases. Most of the time, the last click is purely navigational in nature – the user has done all his research, made his decision and is now simply returning to the site to buy. This explains why “direct” is so strong – I type in the URL or click on my previous bookmark and go straight there. It’s extremely unlikely that I’m going to go to Facebook, find a wall post or go to their page, and then click through to the site to purchase.

So using this type of study to determine whether or not social media plays a role in driving sales is extremely disingenuous and an article like this creates significant confusion in the market.

So how DO you determine whether social can drive sales?

One way is to look at the purchase habits and history of your audience and segment by channel of engagement – take a group of customers who you know are connected to you through on social media, and compare their purchase history, size of transaction and frequency of purchase to a similar structured group of users that you know aren’t engaged. You can use social media login tools like JanRain or Gigya to start pulling the data sets together (as well as a few other, less “white hat” techniques) and understand which customers are engaged across the various digital touch points.

Another is to use some of the emerging measurement tools like SumAll that make it really easy to connect social engagement with actual sales across a range of frequently used ecommerce platforms.

Alternatively, give us a call and we can work with you to come up with the right solution that suits your own data landscape and requirements.

But whatever you do, don’t follow Forrester’s lead and just use Google Analytics traffic sources and last click attribution to make value judgements for this type of thing.

 

Mike Zeederberg
Mike Zeederberg
Mike Zeederberg is the Managing Director and joint owner of Zuni and oversees the development and delivery of most client strategic work.

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