Everyone is looking for the next big thing in Internet marketing, and when you look at the statistics it would seem that social media outlets like Facebook and Twitter are just that thing. It is estimated that about 1.5 billion people use social media outlets daily; that is an increase of 19 percent over last year, and that number is expect to rise exponentially. That is approximately 65 percent of total Internet use. Facebook, with its nearly 900 million regular daily users, makes up the bulk of those numbers.
Logically it would seem that tapping into even a portion of those users would translate to more contacts and bigger sales revenue, so marketing specialists are urging businesses to jump into using social media for marketing and gaining brand recognition.
However, early data shows that popularity on social media networks is not having a big affect on the bottom line of many companies who use them for revenue generation purposes. A recent study conducted by Forrester found that out of 70,000 online sales conducted in April 2012, less than one percent of the transactions could be linked to social media outlets.
There could be several reasons for this, not the least of which is the nature of social media usage itself.
Popularity Versus Influence
Popularity is a measure of the favorable association of a brand or company. Influence is a measure of how much that favorable association plays a part in changing consumer behavior.
Sites like Kred and Klout hype social media’s popularity component, but what do their numbers actually reflect? They mostly measure one’s level of popularity on various social media sites such as the number of likes, shares, and re-tweets, but they don’t really measure how much that popularity generates real social media influence.
A more accurate reflection of how affective your web marketing efforts are in influencing consumer behavior are applications such as Google Analytics, which breaks the numbers down by category and tells you exactly where your revenue is coming from. Appinions also measures your level of influence beyond what social media offers.
Detailed, revenue and influence-specific analysis are a more reliable indicator of the amount of influence your marketing choices have on customer behavior. When you know exactly where your money is making you money, it is easier to make decisions about the allocation of your marketing budget.
Social Media Versus Traditional Web Marketing Strategies
Ordinary influencers like email and search engine-focused advertising are better at revenue generation. These marketing efforts are more targeted and specific. When people want to socialize, they turn to social media; when they want someone to fix their sink, they look for a local plumber on Google. Email marketing campaigns are more effective at incurring repeat business by informing existing customers of special offers and upcoming sales.
Though it is possible to purchase social media influence, or at least purchase an increase in visibility on social media sites, there is little reliable data that such an expenditure translates to sales. Facebook recently admitted that their numbers are greatly exaggerated when it comes to how effective business marketing on their site is at influencing consumer behavior.
While social media outlets can create an initial ‘buzz’ about a new product or company, efforts in this area usually bring only short-term attention but not any real, sustainable actions. The amount of time, money, and effort to sustain an effective social media campaign and keep the buzz going makes this avenue seem a less attractive expenditure than other web marketing techniques.
The studies in the area of social media’s influence on consumer purchases are still preliminary. Early data suggests that while social media is an effective tool in establishing and maintaining regular interaction and contact with customers, your money is better spent on the tried and true methods of turning prospects into sales.