Social media marketing is an essential tool in the arsenal of any successful digital marketer. But despite the hype and the cash spent on it, is it really giving a fillip to sales? Is it in real world scenario giving adequate returns that are justified?
Since the time Facebook started enabling adverts and Like campaigns, a new marketing channel opened up for several companies looking to occupy customer mindspace.
An early adopter of the trend was Starbucks. In 2009, it started “My Starbucks Idea” on FB, wherein it encouraged customers to submit suggestions which were then voted upon by other Starbucks customers. The most popular suggestions were highlighted and reviewed. Starbucks then took it up further to launch “Ideas in Action” blog that gave updates to customers on the new changes that were suggested. Thus by empowering their selected customers, Starbucks strengthened their campaign to add that personal touch to their coffee.
There are of course other glittering examples of how social media could best be harnessed, but the biggest frustration to marketers has been their inability to track actual sales through the community channels.
Steps to track sales typically might include asking customers, sending out surveys, or tracking them through their names and birth dates. However, there is always that painful difficulty wherein marketers need to know exactly how many consumers actually made a purchase and by which channel. Also brand awareness and recall are important metrics that cannot be fully judged by social media alone.
New research has, however, indicated that social media might actually be generating the much desired results that were visualized initially.
“2015 Social Media 500”, a study of 500 leading merchants by Internet Retailer on their use of social media, reveals that retailers’ increased efforts to build social media audiences are paying off. The number of consumers who were following at least one brand were up by 33% on Facebook, within one year. The report also stated that The Top 500 retailers earned $3.3 Billion from social shopping in 2014, a growth of 26%
According to another report by Business Insider:
- Social media is driving much bigger increases in retail traffic than any other online channel.
- Social media increased its share of e-commerce referrals nearly 200% between the first quarters of 2014 and 2015.
- Facebook accounts for 50% of total social referrals and 64% of total social revenue.
- Pinterest is a major social commerce player despite a relatively small user base. It drives 16% of social revenue despite an audience 6.5 times smaller than Twitter.
According to leading statistics provider Statista, by the end of 2015, social selling will amount to $30 billion worldwide, a 50% increase over 2014’s $20 billion.
In a big leap forward, social media sites are busy developing Buy buttons on their sites that will enable marketers to track exact sales leads generated from their campaigns. MROI (marketing return on investment) will be more provable, thus giving a strong foothold to the social media marketing blitz.
The trend, therefore, suggests that social media is clearly aiming for a lead-generation model, instead of an ad-only revenue model. Would they then become like affiliates, taking a small portion of the revenue? Only time will tell…