The previous post in this blog looked at a study which suggested that more traffic from retail websites comes from email than social media. While this certainly illustrates the value of email marketing, it raises the question: Is there any real value to social media marketing? The answer is yes, and lots of it. This post will show how social media marketers should interpret the study mentioned in the previous post, as well as introduce some other research that quantifies the value of social media marketing.
To recap the data from the L2 Think Tank study, only 2.4 percent of the traffic to retail websites came from social media. Search traffic and direct traffic each accounted for about a third of retail website traffic, referral traffic made up 18 percent, while about 9 percent came from email marketing. While some may see this as evidence for a reason to abandon social media marketing, the opposite is true. As was mentioned in the previous post, social media marketing is often a hidden factor in what creates search and direct traffic. All things being equal, people will choose to go to a organization or website they have already heard before they start their search. Similarly, they would have to know about a website before they could directly visit the site by putting in an address. This is where the value of social media marketing comes in. Every time a fan likes a post or comment, their friends will see a story in their status feed. Now when they are searching for something and they see the name of the company, they will remember that their friends like that organization, and think that maybe they should try it too.
This doesn’t mean there is no hard evidence for the value of social media marketing. A different report, released by Syncapse, showed that the average value of a Facebook brand Fan has increased by 28% to $174. According to the report, fans of a brand on Facebook are more likely to be the first person to use a brand, they spend more, they engage more in online discussions, they advocate the brand to others and they are more loyal to the brand than non fans.
The study, titled “The Value of a Facebook Fan 2013”, surveyed 2,000 panelists and used their answers to compare fans versus non fans in six key areas. First, it asked how much the panelist spent on the product in the last 12 months. Second, the survey asked about the panelist loyalty and intent to purchase in the future. Third, it asked about the panelists’ propensity to recommend the brand to others. Fourth, the researchers measured the inherent value of media and messaging in fan membership. Fifth, the measured the panelists’ propensity to organically grow more fans. And finally, it asked about brand affinity, the emotional draw felt by panelists for the brand.
The report found that on average, fans of a brand on Facebook were 11 percent more like to to to continue using a brand than non fans, and they spent 43 percent more despite not having a higher income than non fans. Though the study specifically measured the value of fans on Facebook, the researchers acknowledge that other social networks may have similar customer values.
“Our experience working with many of the world’s largest global marketers shows that fan value varies among brands as well as networks,” said Syncapse CEO Michael Scissons in an interview with the New York Times. “Many mass-market global brands with low price points may see a higher value with Facebook fans versus connections on other social networks, because that’s where their customers are. Conversely, high-end or luxury brands may see a higher fan value on LinkedIn, because that’s where their customers frequent.”
It’s important to remember that social media marketing is new territory for businesses and each organization will need to experiment to figure out what works best for them. This means establishing clear goals for social media marketing (e.g. lead generation, increased public awareness, higher sales of a product, etc.) and defining how the organization will measure success.
By taking advantage of the many different ways to quantify the effectiveness of social media campaigns, accurate data can be used to create better promotions and marketing materials in the future. Businesses that make the proper investment in social media will benefit by building a more loyal customer base that shops more and spreads the word about an organization to their friends. And when the friends of fans become potential clients, looking for services an organization provides, they too will have a strong brand affinity that will lead to more search and direct traffic. There is tremendous value in social media marketing, marketers just need to know where (and how) to look.