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Posted by Augie Ray on December 31, 2010
It's sometimes amazing (and disappointing) what you find when you scratch beneath the surface of headlines. Take this one from Mashable: "Social Media Not a Big Factor in Holiday Purchases." It’s a big, eye-catching, alarm-raising headline, but as I dug into the story beneath the headline, I found my impression changed considerably.
The article reports on a ForeSee study that, according to Mashable, demonstrates that "social media may be an underwhelming driver" of retail sales. Based on the Mashable article, I downloaded the report from the ForeSee site, expecting a thorough exploration of social media's role in holiday shopping purchases. I was surprised to find that the portion pertaining to social media was a mere two sentences in the 22-page report. (In fact, ForeSee notes that its report could not contain all of the findings of the study, so additional information relating to topics like social and mobile will be made available in future weeks by request.)
In the very brief section dedicated to social media and holiday retail, ForeSee reveals that just 5% of online holiday shoppers report being primarily influenced to visit top retailer sites by social media channels, compared with 19% primarily influenced by promotional email and 8% as a result of search engine results. Based on these findings, ForeSee laments that "retailers continue to put vast resources into this type of marketing" and states, "tried-and-true online marketing tactics should not be abandoned or ignored in favor of newer media." Mashable declares, "The power of social media to influence purchase decisions may be overstated."
I have no access to the data beyond what was included in the report, but I'd suggest these results be considered in a broader context that includes:
- Social Media marketing is still young. In some ways, we're in the "brochureware" stage of social media marketing. The term brochureware was coined in the early days of the Web when companies would simply convert their existing collateral material into static, non-functional Web sites. In essence, they were taking the paradigm of an established media and attempting (rather weakly) to graft it onto a new medium.
And that's what's happening today in social media; for example, JCPenney became the first national retailer to launch a complete shopping experience within Facebook. Its Facebook store allows users to "shop the latest styles right on Facebook and then share your top picks." Were consumers really clamoring to have the experience of JCPenney.com duplicated in Facebook or for easier ways to spam friends with product advertising on their walls?
In the future, social commerce will create exciting new experiences for shoppers, but for now this sort of "store in a tab" functionality is simply grafting an old paradigm into a new medium. That is why we should be cautious about how we judge social's impact today; after all, for most retailers the 2010 holiday season was probably only their second with a serious social media strategy as part of their marketing mix. We will get a much better view into how social drives retail in the years to come, as marketers gain experience and get more innovative and as social matures in the same manner email and search engine marketing did more than a decade earlier.
- Self-reported data on influence is unreliable. Asking someone what influences them is not an effective way of evaluating what really influences them. First of all, we’re all bombarded with too many marketing messages to reliably dissect our own influencers. Consider the barrage of retailer social media messages to which you were exposed this past holiday season: How many check-ins, articles and blog posts about social media programs, brand-related status updates from friends or marketers and ads on social sites did you see? And let’s not forget the “analog groundswell” (or plain old real-world dialogue with friends). Evaluating the extent to which this mélange of voices and messages influenced where you shopped or what you purchased is a lot to ask of an individual.
Furthermore, The ForeSee survey question plays into a psychological blind spot in human self-awareness that is called "third-person perception." This is defined as the tendency for people to think others are more influenced by media than they are themselves. (Are you influenced by advertising? Of course not — you're much too smart and self-aware for that! Advertisers spend over $100 billion dollars each year to influence everyone but you.)
In Media Effects: Advances in Theory and Research, Jennings Bryant and Mary Beth Oliver cite several studies on third-person perception. For example, one study found that individuals perceived other people were more influenced than themselves by commercials for household products, liquor and beer and cigarettes. Even young schoolchildren exhibit third-person perceptions — elementary and middle school students perceived that cigarette ads have significantly greater impact on others than themselves. Instead of asking consumers if they were influenced by a marketing channel, it is much more effective to measure actual influence based on behavior or attitudinal shifts (which is, admittedly, a tougher nut to crack, but can be done in different ways, such as media mix modeling).
- Social media is primarily about brand lift, not direct response marketing. Lastly, I find this focus on social media as a driver of immediate sales a little surprising. Just about everyone acknowledges that social media is much more oriented toward building affinity, advocacy and relationships than it is to direct response marketing. Brand objectives such as these are not best measured in short-term sales but in long-term brand lift. (For more on measuring social media, check out my blog post from earlier in the year: The ROI Of Social Media Marketing: More Than Dollars And Cents.)
Of course, what I reacted to most strongly isn’t really the data (because any data is better than no data) but the way in which it was interpreted. I'm troubled by ForeSee's implication that marketers are abandoning or ignoring their "tried-and-true online marketing tactics" in favor of newer media. I see little evidence of this; rather than ignoring or abandoning other channels and tactics, marketers are integrating social into their overall marketing mix. In fact, based on some unpublished research I just reviewed, spending is increasing across the board on a diverse set of interactive marketing tactics. And as for ForeSee’s observation that “vast resources” are being invested into social, this same research indicates that more than half of organizations spend less than $250,000 on paid and created social strategies.
Did social media influence holiday retail sales this past season? Without question, but it will take additional years, more creative social commerce strategies and better research before we can draw any meaningful conclusions on the relationship between social media and retail sales.
As we continue to move into a faster world that is driven by increasingly shorter communications, it’s vital that we do not rely merely on headlines and 140-character summaries to drive our awareness and understanding of complex issues. If you’re shopping around for a New Year's Resolution for 2011, might I suggest we all commit to not just scan tweets and headlines but spend the time to read, consider and reach our own conclusions.
Related Forrester Research
- The Analog Groundswell
- Overcoming The Challenges Of Measuring Influence
- TechRadar™ For eBusiness And Channel Strategy Professionals: Social Commerce, Q1 2010
- The ROI Of Social Media Marketing
- The State Of Retailing Online 2010: Marketing, Social Commerce, And Mobile
- The State Of Retailing Online 2010: Key Metrics And Multichannel And Global Strategies
- What Every Exec Needs To Know About The Future of eCommerce Technology
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