IBM’s Black Friday report certainly appeared pretty grim for social commerce and marketing. Among the findings: Twitter delivered zero – that’s right – zero percent of sales referral traffic, while Facebook sent just a paltry 0.68 percent of sales referral traffic to leading e-commerce sites. As a whole, IBM found that social networks including Facebook, Twitter, LinkedIn and YouTube generated a measly 0.34 percent of all online sales on Black Friday, down 35% from 2011. “Mobile impresses while social depresses” was a common refrain, and it appeared that social commerce and marketing may have been, in fact, a bust.
Our company Ecwid, however, saw different results. Ecwid is a Facebook storefront-building application with over 230,000 monthly active users; weshowed a healthy increase in sales order referrals (the last click before a visit to an online store and purchase being a social network URL) over the beginning of the shopping season, and a big increase on Cyber Monday itself.
· On Cyber Monday itself, the number of our customers’ store sales referred by social networks rose 70% from the previous Monday.
· In the five-day period from Thanksgiving through Cyber Monday, the number of sales referred by social networks rose 13% from the same five-day period the week before. Sales derived from social referrals grew by an average of 15% for the two weeks after Cyber Monday.
Why the disconnect?First, IBM’s research focused on larger retailers, while our customer base consists primarily of small- to medium-sized businesses. Overall, SMBs seem more natural when it comes to striking the proper tone in social conversations – a far more personal tone than that of bigger companies – and are more adept at artfully integrating their stores into the flow of social conversations. And SMBs in general have been more successful in using incentive programs like “fan of the week,” which tend to get fans more actively involved in their social commerce page.
Additionally and perhaps more significantly, IBM’s research didn’t take into account the impact of social media on downstream visits and conversions. Social networks may not be the last click before an e-commerce buy, but that does not mean that they didn’t inspire or influence the purchase.
The Attribution Challenge
Currently, there’s a social media attribution challenge, and it’s a problem for the entire industry. Google Analytics recently rolled out an assisted conversions tool aimed at measuring the roles and monetary contributions of various social channels, although Google concedes that the calculations reflect an imperfect science. For example, numerous channels in a conversion chain can receive monetary credit for the same transaction, which essentially results in double-counting.
In addition, Facebook has been making a major push to get credited for downstream purchases, rolling out both a self-serve user ID matching system and cookie-dropping ads. These identifiers let advertisers know if someone who purchased an item on their site saw their ad on Facebook in the previous weeks or months—not just if an ad click-through led straight to the shopping cart. However, these tagsstill don’t tally purchases that were made by fans, or inspired by owned (page posts) or earned (word of mouth) media on Facebook.
That’s a huge omission, considering that Facebook says for the week of Thanksgiving, the top 25 most talked about pages were all retailers. There’s a ton of viral marketing that could be driving downstream conversions but isn’t being credited. Facebook may need to extend its attribution systems so e-commerce sites can tell whether a buyer is one of their fans, saw a particular post promoting what they bought, or saw a link to the product that was shared by a friend. For its part, Twitter has confirmed that they do no downstream conversion tracking right now.
Finally, online merchants must take a more active role in instrumenting and quantifying social referrals as key drivers of revenue growth. Today’s online storefront technologies can track social referrals – not just site traffic generated, but the actual conversion of prospects to active customers.
Social media’s role in demand generation quite likely is very significant, but the vexing issue remains our collective inability to track how businesses can validate return on their advertising and marketing investments in social networks. The industry requires an effective mechanism to trace social media impressions effectively through to referrals, and then to actual sales and to the total monetary value of transactions, which will help quantify the value of various channels.
Until then, marketing professionals will be challenged in justifying their social media investments. In addition, marketers risk being late to the game or missing out altogether on new social commerce opportunities like Pinterest. And, social networks will be continually pressed to prove that it’s not Google driving every sale.
Jim O’Hara is president of Ecwid Inc.