I published my first-ever post using Storify. I found it more than a little difficult to use, but I'm glad I finally got around to giving it a test drive.
Here is the post, which is about the wildly contradictory data around the association between social media and purchase decisions. It includes links and data from over a half dozen studies, surveys and research reports. Some show social drives substantial purchase behavior; some could find evidence for almost no association between the two.
[View the story "Does Social Media impact purchase decisions?" on Storify]
Does Social Media impact purchase decisions?
I've rarely seen so many studies, surveys and research papers demonstrate such a wide variation of findings as there are around the topic of how much social media drives purchase behavior. Some say a lot. Some say not at all. So, what's up?
Storified by Augie Ray· Mon, Feb 04 2013 07:06:14
Forrester: Almost No Correlation Between Social Media and Online Purchases
Forrester studied 77,000 retail transactions and found social media was trackable as a source for less than 1% of online purchases. The report allowed that social may represent "highly top-of-the-funnel tactics that likely require a longer measurement period than the 30-day attribution window for this report" and that "social networks are believed to have a disproportionately larger impact on small merchants, which were not captured in this analysis."
I wanted to learn much more about the methodology, which is briefly described at the end of the Forrester report (subscription required). Which retailers, products and categories were included? What is the definition of a "trackable social link" and might untrackable social links have resulted in additional purchases? Finally, the report says the methodology tracked "If consumers 'touched' any of the retailers' marketing programs," but what about non-marketing program posts in social media or, more importantly, peer-to-peer sharing? Did Forrester's methodology only capture attributions from paid media in social? I was left with more questions than answers, but it was clear Forrester's data showed almost no correlation between social media and purchases.
Forrester Research : Marketing : Less Than 1% Of Online Purchases Come From Social ChannelsThirty-nine percent of online retail transactions by new customers start with clicks from paid or organic search results and less than 1%...
Baynote: Social Media Drives Purchases, But Not As Much As Old Dead-Tree Catalogs
Baynote, a multi-channel retail consultant, conducted a study that found that paper catalogs influenced more holiday purchases than did social media, even among young adults--the people most engaged in social and least likely to use traditional catalogs. (Baynote did, at least, find a higher correlation between social media and retail purchases than Forrester did.)
Baynote Holiday Survey
IBM: Social Media Barely Accounted For Any Of Black Friday 2012 Sales
IBM released a study of Black Friday sales and social media that was as damning as Forrester's report. (In fact, I detected a note of glee in how much IBM enjoyed trumpeting the lousy social media findings.) It noted that just 0.34% of all online sales on Black Friday came from referrals from social networks, and "Traffic from Twitter to retail websites was especially grim: down from 0.02% of total traffic on Black Friday in 2011 to 0.00% this year."
The thing that was really striking was that IBM reported that social media referral traffic resulting in purchases was down a whopping 35% since 2011. Does that make any logical sense at all? We've had continued growth in active users in social media and in time spent with social media during the past year, but purchases referred from social media sites dropped by more than a third?
Social Media Has A Black Friday #FailIBM's report on online retailing over the holiday weekend shows online sales on Thanksgiving and Black Friday were both up sharply, 17% a...
ARF: Consumers Say They Learn About and Change Opinions of Brands Based on Social Media
Forrester and IBM, in particular, threw a couple buckets of cold water on the notion that social media drives purchases, and both base their analysis on referral data, which is hard to refute. But there are a slew of other studies that say something completely different, although these studies are based on consumers' self-awareness and self-reporting.
The first comes from the Advertising Research Foundation, which surveyed 2,000 U.S. shoppers and found that roughly one-third said they were either introduced to a brand or product, or changed their opinion about a brand or product during the buying process, because of social media. What’s more, 22% of shoppers surveyed by the ARF said that social media was “important in my final purchase decision.”
MediaPost Publications Social Media Affects Purchase Decisions, ARF Finds 01/23/2013Social media has a measurable impact on consumer purchase decisions, according to a new study from the Advertising Research Foundation ba...
Nielsen: Consumers Turn to Social Media to Learn About Cyber Monday Deals
In an interesting twist to IBM's somber Black Friday report, Nielsen asked consumers in advance of the Black Friday/Cyber Monday shopping weekend about their intended shopping habits. Forty percent said they rely on social media sites like Facebook and Twitter for Cyber Monday sales information.
How can 40% of consumers recognize social media as a source of information on sales but less than one percent of those sales derive from a social media site clickthrough? I'll admit that asking consumers what influences them is a notoriously inaccurate way to find out what actually influences them, but there is a huge and surprising gap between the percentage of people who think social media is a source of deals and the miserly number of deals that are purchased via social media clickthroughs.
Cyber Monday Draws More Consumers Than Black Friday | Nielsen WireAs consumers increasingly turn to online shopping, the shift of the holiday focus continues to move from Black Friday to Cyber Monday. A ...
Nielsen: Consumers Complete Purchases After Seeing Social Ads
In another report from Nielsen--this being its terrific 2012 State of Social Media report--the research firm reports that people who see social ads buy stuff. Nielsen found that, as a result of seeing a social ad, 10% of consumers have made a purchase over the Internet, 8% made a purchase at a store, and 18% have purchased or obtained a coupon (through a daily deal site or retailer). As a result of seeing social ads, 15% of people shared ads, 26% of people liked ads and 14% of people purchased the products advertised. (To be clear, Nielsen isn't saying that 14% of the people who see your social ads will buy your product but that 14% of people report buying an advertised product after seeing a social ad.)
Of additional interest is that the likelihood of sharing or liking a social ad or purchasing a product as a result of seeing such an ad is different for different demographic groups. Over twice as many Asians and 50% more Hispanics as the general public have made a purchase after seeing a social ad.
Nielsen | Social Media Report 2012
University at Buffalo School of Management: Social Media Engagement Boosts Sales
A study from the University of Buffalo found that customers who participate in a firm’s social media visit the business about 5 percent more frequently than those who do not participate. Not only that, but those extra visits go straight through to the bottom line. Said the author, "Our results show that when customers engage with a business through social media they contribute about 5.6 percent more to the firm’s bottom line than customers who do not." How many businesses wouldn't mind earning an additional 5.6% from their existing customers?
Social Media Pays Off for Businesses, Study Shows - News CenterBUFFALO, N.Y. - Customers who connect with a business through social media will go to the business more frequently and contribute more to...
Market Force: Vast Majority of US & UK Consumers Have Purchase Decisions Influenced By Both Friends' and Companies' Posts in Social Media
In an impressively large sample size of 12,000 consumers in the US and UK (75% of which were women), a whopping 81% of US respondents indicated posts from their friends directly influenced their purchase decision. Perhaps it is not that surprising that friends influence friends' purchases, but it may shock you to learn that 78% of respondents said that posts by companies they follow on social media impact their purchases.
Are Brands Wielding More Influence In Social Media Than We Thought? - ForbesAs one who has read, dissected and written about many a study regarding social media, brands and consumers, I can tell you I for one was ...
Knowledge Networks: The Purchase Decisions of 38 Million in U.S. Are Influenced By Social Media
In a June 2011 survey of consumers, Knowledge Networks found that the percentage that say social media influences their decisions had increased 14% in just six months. They estimate that the purchase decisions of 38 million 13 to 80 year olds in the U.S. are now influenced in various ways by social media. Other interesting findings were that 23.1 million discover new brands or products through social media (up 22% from a year before) and 15.1 million refer to social media before making purchase decisions (up 29%).
Study: Social media influences the buying decisions of 38 million Americans | Articles | HomeFor marketers who want to know the value of social media and mobile to their brands, the answer is a resounding "very." A whopping 38 mil...
M Booth and Beyond: Consumers Turn to Facebook and Forums Before Purchasing Certain Categories of Products
In a survey of 1,500 consumers, M Booth and Beyond found different product categories were influenced in different ways by social media. For example, 49% of people use Facebook when searching for restaurants. At first I found this a little absurdly high, and then I thought about what "using Facebook" means--I've never searched Facebook for a restaurant, but I have turned to Facebook to ask my friends for restaurant recommendations and have learned about new restaurants as a result of friends' posts.
Other findings from this survey include that 63% of baby product consumers use Facebook to research a brand or product, 55% of consumers researching electronics are influenced by forum posts and 44% of automotive consumers research using forums.
How to Influence Purchasing Decisions On The Web [INFOGRAPHIC]When savvy consumers are in the market for something - a new pair of kicks, a sweet DSLR camera, hair pomade, a toaster - they turn to th...
BlogHer: Social Plays a Greater Role in Purchase Decision Than Offline Media
Way back in 2010 (which seems so long ago, doesn't it?) BlogHer found that, other than search, social was the most common medium to which people turned for information to support a purchase decision. Of course, this survey had some pretty substantial bias since the "people" in this case were BlogHer site users. Still, among this set of Internet- and social-centric consumers, social was found to be a major driver in the purchase decision. The study found that BlogHer users turn to blogs (53%), user-generated content (46%), message boards (34%) and social networks (26%) before magazines, TV and newspapers when seeking information to assist with a purchase.
Social Media Plays Major Role In Purchase DecisionApart from search engines, blogs (53%), user generated content (46%) and social networking sites (26%) are among the favorite online rese...
Forrester and LinkedIn: IT Decision Makers Influenced by Social Media
To close out this blog post, we return to Forrester research--only this research report found that social media has significant influence over purchasing decisions. The study, commissioned from Forrester by LinkedIn, pertained not to consumer retail but to the more difficult, complex and lengthy buying decisions made by B2B IT Decision Makers (ITDMs).
This time, Forrester said social media influences buying decisions. 85% of ITDMs have used at least one social network for business purposes; 73% have engaged with an IT vendor on a social network; and 59% of respondents say they are influenced by at least one social network when considering business purchases. And during each of the five phases of decision making – awareness, scope, plan, select, implement – social networks influence nearly 50% of all ITDMs involved in each phase.
Now, I am puzzled. Forrester can find virtually no linkage between consumer retail purchases and social media, despite the fact many surveys indicate consumers say social media helps them learn about new products and influences their decisions. Meanwhile, when it comes to the least impulsive and most impersonal buying decisions imaginable--big-budget IT investments made via buying processes overseen by Procurement departments--Forrester can find substantial influence by social media in every step in the process?
Efficiency & Relevance: Why Social Media Is A Growing Force In IT Purchasing [INFOGRAPHIC]LinkedIn Corporation ©2012. LinkedIn, the LinkedIn logo and InMail are registered trademarks of LinkedIn Corporation in the United States...
Networked Insights: IBM's Black Friday Data Missed the Real Black Friday Story
Networked Insights, in an interesting post, challenges IBM's approach to the question of tracking Black Friday purchases. Using a great deal of listening data, NI demonstrates that Black Friday didn't impact overall tweet volume on Black Friday itself, but Twitter did see 8.7 million tweets stretching back as early as two weeks prior to Halloween. The data demonstrates that "consumers strategize how to get the best deals before stores run out of inventory" and that "hashtags are crucial to moving consumers through the sales funnel."
How IBM was wrong about social's impact on Black Friday : Networked InsightsAs consumers were still recovering from endless meals of leftover turkey, IBM released their annual Black Friday shopping trends report. ...
Conclusion: I Don't Know
"I don't know" is a lousy conclusion. It's an inconclusion, not a conclusion. There just is no way to square all this data. It is too easy to write it off by saying that consumers overestimate the impact social media has on their purchase decisions--there are too many studies and the percentages are simply too high to dismiss those findings as survey bias or poor self-awareness.
The Forrester and IBM findings also defy common sense. Common sense is pretty uncommon and very subjective, I recognize, but the idea that virtually every company and brand has adopted social media, over a billion consumers worldwide have made it a part of their lives, Americans spend 230,060 years in social every month, conferences and news sites are full of positive social media case studies, and Facebook accounts for one of every 11 Internet visit and one of every five page views--yet it drives no purchase decisions?!? That means social media is either the biggest fraud ever perpetrated on marketers, or... well, one only has to consider his or her own social media habits and purchase decisions to know social media is not a fraud.
So, what is wrong with the IBM and Forrester data and analysis? Is it possible we NEVER click links from social network to retail sites but that social media still wields great influence in our awareness, consideration and purchases? I certainly agree social media is better measured in relationship and brand metrics than in direct marketing ways, but it still seems hard to believe that virtually no clickthroughs, referral metrics and conversions can be found from social networks.
I hope more analysis of referral and clickthrough data surfaces soon, because there is entirely too much variance in the data around social media and purchase decisions. Marketers deserves better answers than they are currently being provided by the contradictory research!