Recent research from Forrester suggests that social media has an insignificant impact on sales. While this may be true within the specific context of the study, the study’s methodology makes it impossible to draw broad conclusions around the impact of social on sales across all of the “buyer journey.”
Here are three key reasons why:
- More comprehensive tracking of content engagement paints a very different portrait. The Forrester study tracked social as a driver of sales only if someone clicked a link on a social property and made an online purchase within 30 days. In fact, brand social strategy is about engaging people with the brand with the intent to increase sales in the future — both online and offline. In a quick service restaurant study we did with partner ChatThreads last year, exposure to social media was a significant drive of sales increases. And, when combined with other media (for example, editorial and billboards) social exposure resulted in a 1.5-2x higher likelihood of purchase across all 5 restaurants in the category. Further, two more studies support a social-sales link: Edison Research’s study last year showed that 28% of social media users cited social networks as influencers of their purchase decision. And in a 2011 ROI Research study, just over 50% of respondents reported they would likely purchase a product after following the brand on Facebook or Twitter.
- In some categories, there’s a sales impact over a longer time than 30 days. With purchase taking several weeks to months depending on the category, a 30-day window doesn’t capture the impact of many longer-lead-time purchases (e.g., air/hotel, some automotive, some apparel, many technology purchases, non-food CPG items and much of B2B). Forrester’s study authors point this out as a potential limitation. This is a more complex area of study, but data from companies like Ford (see below) suggest a good trend.
- “Non-social-network social” drives impact. For many categories, bloggers and review sites are very influential in the purchase journey (but weren’t specifically looked at in this study). Mom blogs, budget/finance blogs, tech/gadget blogs are among those blog categories that are widely read and trusted; in travel, Expedia found a 1 point increase in review score correlated with a 9% increase in average daily rate the hotel could charge; and finally in many categories, reviews via Amazon.com and many other sites are similarly important.
Many leading brands, such as Starbucks and our client Ford, have continued to increase their investment in social because of the long-term payoff. And great campaigns continue to deliver: Ford, for example recently found that not only did its Focus Doug social media program drive 61% higher consideration for Focus, but it also was cited as a driver of purchase.
To help CEOs and CMOs make better spend-and-mix decisions in an environment where social content takes an increasing share of consumer attention — and influences decison-making — it’s important we work harder to tie social to business impact, specifically sales. While many CMOs – 58% in one survey by Wildfire and 76% in a Bazaarvoice survey — find social does impact sales, there’s still uncertainty about the magnitude and the factors that drive impact.
We must move beyond solely reporting activity such as Likes, Engagement and Tweets. And we must find business-impact-focused ways to compare social to other media, avoiding the temptation to fall back to easy metrics that don’t tell the whole story (e.g. ad equivalency or rating points).
We have started taking the first steps towards this goal by rolling out a business-impact model called Ogilvy Conversation Impact that looks at social against key business impact areas such as Reach, Positioning, Preference and Action (Sales). We will also soon be formally announcing a new advanced cross-media social and digital impact attribution tool. This tool can determine the link between exposure to social content and offline or online sales — moving us and our clients one step closer towards real data-driven social spending & allocation decisions.