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Rich and Co.

“Hope For The Best, But Expect The Worst With Social (Media)”

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The is a lot of hope and hype around social media and professional services and financial services – our vertical.  Here is some data and it’s sobering.  This data regards:

  • Simple consumer goods
  • Ads as opposed to social media participation

If social media will work to drive business for anything, this is the kinds of products.  Results = (pretty much) zero.

Bottom line – If ads for B2C goods aren’t working in social media, what kind of business results can professionals and professional firms expect.  Not much, we say.

Take Away On Social Media Marketing:

“Hope for the best, but expect the worst with social. While the usage of social networks continues to grow, there continues to be the hope that they will one day provide a viable marketing vehicle for connecting with shoppers. This past holiday season demonstrated that social networks continue to be inexpensive ways to promote messages and are therefore relatively low-risk”

Social Network Advertising Nudges, Doesn’t Drive by Jack Loechner, Wednesday, May 11, 2011

According to a recently released report, a collaboration between Forrester Research and GSI Commerce, social media rarely leads directly to purchases online.

  • Less than 2% of orders were the result of shoppers coming from a social network during the holiday shopping
  • “… buying things from retailers is maybe 10th on the list of things they want to do on Facebook… from a retail and commerce perspective, social media seems to have no effect..
  • Social media outreach is somewhat effective for distributing news about short-term deals, as 5% to 7% of purchases are influenced by social media activity.

What does seem to work, says the report, is more traditional online marketing, including email and search advertising.

Across the board, the shoppers in this study touched some retail marketing vehicle before completing a transaction. More often than not, these shoppers either searched explicitly for a product on a search engine such as Google or they received the retailer’s promotional email.

While retail marketers employ a variety of tools, “traditional” tactics continue to be most effective, says the report.  Display and affiliate marketing also exhibit strong influence in the purchase funnel.  Social tactics “came alive” during key dates for soft goods, but social tactics were largely ineffective in driving sales. The data from this study indicated that less than 2% of orders were a result of shoppers coming from a social network.

The report concludes with these “takeaway” recommendations.

  • The most significant finding from this retailer data was that email marketing not only continues to stay alive, but is the strongest tool for reaching busy shoppers. That said, retailers should also consider several other key opportunities that surfaced in the data:
  • Attribution modeling is critical
  • Because shopping behavior around key dates is different from the rest of the holiday season, retailers need to plan accordingly. Promotional dates tend to attract more deal-hunters who are more open to email messages and discovering deals while other dates are more likely to engage “spearfishers,” consumers who are more likely to be looking for specific products by using tools such as search.
  • Hope for the best, but expect the worst with social. While the usage of social networks continues to grow, there continues to be the hope that they will one day provide a viable marketing vehicle for connecting with shoppers. This past holiday season demonstrated that social networks continue to be inexpensive ways to promote messages and are therefore relatively low-risk

Excerpted from original article here

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Written by Rich and Co.

June 7, 2011 at 10:44 pm

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