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Can social media influence purchasing decisions? Lots of time and money has been invested in a clear bet that the answer is 'yes'.

Some cite anecdotal reports regarding commercial activity on sites like Twitter, for instance, as evidence that popular social media services are playing an increasingly important role in purchasing decisions. But is social media the boon to the influence of purchasing decisions that many believe it is?

A survey conducted by Knowledge Networks throws the consensus into question. It found that less than 5% of social media participants aged 13 to 54 "regularly turn to these sites for guidance on purchase decisions".

The figures were under 4% for key verticals such as travel, shoes and clothing, restaurants, financial services and personal care products and cars and trucks.

Given how many social media services have been built around travel, for instance, and how companies like Ford are relying more heavily on the use of social media to launch new product, the question has to be asked: are brands wasting their time and money?

It's a tough question to answer. It's pretty well established that customer reviews, for instance, which fall under the purview of 'social media', can have a real impact on sales.

But when it comes to pure-play social media outside of the ecommerce environment, Knowledge Network's study is worth taking a hard look at for brands that are looking to Facebook, Twitter and similar services to drive sales.

AdWeek notes that:

The numbers are more robust when respondents apply the looser standard of whether they "sometimes" use social media for guidance on purchase decisions in these categories.

Only 16% of the respondents agreed that they'd be more likely to purchase a product or service from a brand advertising on social media websites, although 63% stated that advertising was a "fair price to pay" for the free use of those websites.

At the end of the day, the top priority for social media participants: "staying connected".

Obviously there are intangible benefits to brand participation in the world of social media. I don't think anyone doubts that brands can gain a lot from interacting more intimately with consumers. These interactions could conceivably impact brand perception and thus purchasing decisions, even if social media participants aren't explicitly going to notice or admit to this.

But if Knowledge Network's survey is to be believed, brands may need to rethink social media and their social media strategies. Turning social media into sales may be a much more difficult and indirect process than previously anticipated.

Photo credit: AMagill via Flickr.

Patricio Robles

Published 26 May, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2381 more posts from this author

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Wessel van Rensburg

Your report says:

"Only 16% of the respondents agreed that they'd be more likely to purchase a product or service from a brand advertising on social media websites, although 63% stated that advertising was a "fair price to pay" for the free use of those websites.

At the end of the day, the top priority for social media participants: "staying connected"."

I hope this report is not based on ADVERTISING on social networks. That's daft. Purchasing decisions via them is driven my word of mouth just like product reviews are.

Facebook - IMHO - is not the best platform anyway. Twitter is. Twitter if used right drives awareness, and through relationship building and communicatin can be a massive driver of purchasing decisions.

PS: We run a dev house and our biggest contract this year was won in repsonse to a brief given out on Twitter.

about 7 years ago

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web development company

Yeah social media can influence the buyers decision but still it depends on your product. Some people on social media network might not be interested on your products and services at all.

about 7 years ago

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Stuart Crowder, Internet Marketing Consultant / Social Media Expert at n/a

I liked this article as it brings to light the real ROI of using Social Media for marketing.

Companies cannot expect sales to happen directly, or directly influence purchasing decisions using Social Media. Its the way you come accross as a brand. A base of users who are interested in your products, and who haven't nessacarily bought them, who will talk to you, and about you to others to create that wonderful 'word of mouth' attribute of Social Media. This i think is where the real measurement should be.

Looking at social media as a direct route to sales will only bring frustration, but rather focusing on how to create brand advocates to do the selling and talking for you, off their own back, will be the real measurement of success.

about 7 years ago

Jeff Molander

Jeff Molander, CEO at Molander & Associates Inc.

Finally some common sense research. Did we really need this research to draw this conclusion?  Is it really that surprising and why will so many fight against and question it's validity?

Wessel... yes, Twitter can drive purchase decisions but why do we stop there and celebrate it?  What about profitable campaigns?  What about the larger business metrics that we must mind as responsible, forward-thinking (acting) marketers?

Brand advocacy, word of mouth, traffic to your Web site, increasing conversion -- none of this gets people paid much looking forward.   What does: sales, leads, subscriptions, trials, downloads.  People doing things. 

Social media IS trackable and can be measured despite what all the experts claim.  It's all able to be measured if we want to -- and attributable back to a larger customer viewpoint (their "chronology of purchase intent").  That's strategic.  We need to stop being so tactical IMO!

Think about it: the problem here is that we're still calling things "social media" as marketers.  It earns us very little respect in my opinion.  The sooner we realize that the WHOLE WEB is a social media the better -- we can move on and stop allowing the "branding" mentality (unaccountable, dominated by squishy metrics/voodoo science) and start integrating across disciplines. 

about 7 years ago

Patricio Robles

Patricio Robles, Tech Reporter at Econsultancy

Wessel,

The report also states that less than 5% of the respondents aged 13 to 54 "regularly turn to these sites for guidance on purchase decisions". That's pretty clear to me. Doesn't mean that social media can't influence or doesn't drive sales but if the figures are accurate, it does mean that brands may need to reconsider their social media goals and strategies.

about 7 years ago

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Andy Xhignesse

Another terrific article Patricio, thank you, and some passionate comments, the debate continues...rages?  Perhaps social marketing engagement initiatives aren't achieving the anticipated lift and perhaps it will always be so, or perhaps not.  I'm a pretty average person in most respects and watch the ongoing web evolution from that perspective. Here's a point to ponder: google queries 2006- 2.7 billion monthly,  2008- 37 billion monthly.  Who thought this would be the case 10 years ago?  Not me!  My point is this, maybe social networks aren't the panacea that some thought they would be, maybe they are.  Are there ways that we could better employ them?  Perhaps as suggested, it's related to which vertical you operate in, or maybe the expectations need re-evaluation?  Whatever the case, if someone out there can tell me where we'll be in another 10 years can you please give me your stock picks as well?  In the meantime, continue the discussion.

We're at the edge of the future!

about 7 years ago

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Joseph Kingsbury, Text 100

(sorry for the formatting mess - reposting)

Equating ad performance in social media with the social media’s overall effectiveness as a marketing tool is misleading. We all know people aren’t looking for ads in these environments or else Facebook wouldn’t still be seeking funding. Personal interactions, however, often include recommendations and opinions on products and services. “Word of mouth” is identified as a separate source of influence in this study but social media (not ads in social media) is exactly that – opinions from peers, not companies.

Further, I’d highly suggest looking at the 27 social media sites that were the focus of this study to get better context on the findings and form an opinion. For example, travel is identified as the category in which respondents are most likely to turn to social media for purchasing. The fact that sites like TripAdvisor or even user comments on booking sites like Travelocity et al seriously skews the data, in my opinion.

For OTC and prescription drugs, what about sites like WebMD? What about the universe of gadget blogs and forums where passionate people dissect everything about cell phones? What about peer opinions on Amazon.com for almost anything?

I’m not suggesting that social media has completely arrived as a marketing tool. But I do believe the findings of this report are seriously flawed to the point of being useless when you consider the fundamentally misleading premise and the vast array of sites for each category analyzed that weren’t included in the study.

Joseph Kingsbury, Text 100

twitter.com/jkingsbury

about 7 years ago

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jenni beattie

Great post.

It is important for marketers to realise that social media is not always linked directly to sales.

If they are using social media correctly ie to garner information that helps with new product development, increase customer service etc areas that cut across many areas of the business they will still ultimately benefit from the online consumer engagement.

Cheers,

about 7 years ago

Jonathan Moody

Jonathan Moody, Freelance at Language4Communications

Another great debate-provoking post. Just to throw more fuel on the fire:

Jenni makes a good point above - social media insight and engagement is an indirect route to sales and feeds into other other (related) areas - customer service, advocacy marketing, competitor intelligence, product/service development.

Social media does not start and end with Twitter and social networks - there are ALSO very lively and influential "old school" forums (sometimes linked to well-known print and audiovisual media), message boards, communities and blogs that can contain far more detailed opinion for potetial purchasers to consult than a 140 character Tweet or a "Hey, look at my new car (with photo) -  Yo cool dude." type conversation on a social network.

Way back in 2006 IPSOS Mori carried out a survey of of 5,000 adults in 5 European countries the result of which "The Power of Blogs in Europe" makes very interesting reading (go and Google it). The title is a bit misleading because it also delves into some of the media mentioned above. I'd like to know here some of those figures have moved now...

about 7 years ago

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Vidar Brekke

I'm generally suspicious of any research conclusions that based on what consumers think influence them. Perception and reality is usually pretty far apart, especially as a multitude of messages subconsciously trigger behavioral change over time.

While advertisers today are able to attribute a purchase decision to a series of ad exposures across banners and search engines, for example, doing the same on social networks will be almost impossible.

Was it seeing a banner ad on Facebook that made me book a trip to the Bahamas, or was it the fact that two of my friends had just posted pictures of sandy beaches and blue waters on their pages and received tons of 'wish I were there' comments from friends?

Social media is not an easily controlled or manipulated channel for advertisers, but I'm convinced that friends and peers remain key influencers there as they do in 'real life.'

When research concludes that consumers don't use social networks for guidance in purchase decisions, my gut tells me that the research is not asking the right questions or measuring the actual behavior. In lieu of good research, I guess my gut is what I'll have to trust.

about 7 years ago

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MediaAgility

No company, be it small or very large is immune to competition in this ever increasing competitive business environment. No longer, mere availability of good services or products is sufficient enough to attain edge over your rivals. Only way to survive is to combine your excellent offerings with ultra-savvy marketing tactics. The new marketing buzz is Social Media. In fact, it is as important to excel at social media as it used to be to just have a web presence few years ago.

over 6 years ago

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