Was Social Media A Big Factor In Holiday Purchases? Reach Your Own Conclusion!

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.  

Comments

Some types of social media have proven influence on shoppers

Looking closely at the stat reported by Mashable, it does not refer to social media influence in shopping, but in social media channels (which can be interpreted to mean Facebook and Twitter) influencing shoppers to visit top retailer sites. Two very different things.

Customer opinions are social media, and reviews have proven influence on shopper behavior. Both self reported and observed using many different tests including a/b tests and web analytics. User Generated Content is also a great tool to drive traffic via SEO.

According to a recent study by Channel Advisor, 83% of all Holiday shoppers this year will be influenced by customer reviews. http://www.bazaarvoice.com/blog/2010/09/16/how-to-drive-holiday-sales-th...

Thanks, Gerardo

I appreciate you pointing out the distinction and sharing the additional info. Thanks, and have a great New Years!

Social Media Marketing is Still Young

Augie,

I think your point concerning the evolution of other communication mediums is well taken. The transformation of corporate websites from brochureware to many of the better sites we see today happened as we began to appreciate the unique benefits of the technology. You see the same pattern with radio and television ads. Many of the early radio and television efforts were distinctly different from commercials even five years later. The first television ads featured people reading a script...much like many radio ads of the day.

Learning from the past

Frank,

Thanks for the comment. I appreciate the context you gave from the past. I sometimes think the thing that is lost whenever technology changes is that it isn't people who get the new technology who succeed but the people who understand how new technologies were adapted in the past and can foresee how it will happen again.

Appreciate the dialog!

music to my ears

From my perspective, the last sentence of your post is pure brilliance and it captures the crux of what is both good, and problematic, with social media. Value cannot be measured as a 140 character contribution to ones understanding of marketing, nor without analysis and serious evaluation can a company really
understand what matters, and what doesn't, from a bottom line point of view.
Social media is a powerful affinity building tool. And it has the power to influence buying decisions in the moment. But what is most important, is that social be seen as an integral piece of a bigger, and unified, go to market strategy. One that blends traditional as well as digital outreach and allows every channel to do what it does best. The right strategy will be the one that breaks down the silos and considers service as an extension of the brand promise, not the task of another, unrelated department. 2011 just may be the year social media uses its native skills to influence and inspire, to get companies to understand their market is forever changed, and that a huge opportunity is ripe for the taking.

Thanks, Debbie

Appreciate the positive feedback! I (obviously) agree with you--social needs to be part of a cohesive strategy, and anyone who relies on 140-character tweets to become better educated will get what they deserve! :)