A new study from e-Dialog and ClearSaleing suggests that conversions that occur after exposure to a brand on social media deliver more than $280 per order - compared to less than $100 for those that are driven by natural search.
Social also delivers better revenue per click ($5.24) than email ($3.18) and paid search ($4.38), indicating that purchasing intent is high.
The Guide To Market Leadership 2012 set out to identify the trends that will impact digital marketing this year, including improving conversion quality, increasing the focus on customer intent and seeking quality in display media campaigns.
Improve Conversion Quality
The report found that efforts to increase conversion rates need to focus as much on the consumer journey before they reach the site as the on-site experience.
For example, when a display advertisement was included in a conversion path the average revenue per order increased to more than $206, almost 65% more revenue than the overall average order size of $135.37.
e-Dialog says that online marketers should focus time and effort on growing channels as “the more visually and emotionally connected channels, such as display and social media, have proven to be highly effect the overall revenue per order, when present in a conversion path.”
Increase focus on consumer intent
The study found that channels with traditionally high consumer intent continue to be safe bets for online spend.
For example, paid search showed a relatively high intent factor, with an average of $4.38 revenue per click in this study.
However the findings illustrate that in addition to the increase in revenue per order when social media is present in a conversion path, the channel also offers a higher level of intent to buy than any other channel.
When social media was present in a click path, the social media click accounted for $5.24 in revenue, an 8% increase over the overall average, and more than 84% more revenue than from natural search.
The report clarifies that “although social media is still in its early states in terms of revenue capture, it is proving a core channel for capturing intent and driving quality customers.”
Seek quality in display media campaign
e-Dialog also evaluated the strength of various display ad channels in starting new customer conversations within the overall consumer journey.
Premium publishers (those that belong to the Online Publisher Assocation) displayed twice the ability of ad networks, and four times the ability of Demand Side Platform’s (DSPs) to introduce and start new customer conversations.
This means that within online display, roughly 8.4% of all premium publisher advertising interactions were the beginning of new customer purchase paths.
Enhance visibility and efficiency in downstream channels
The report looked at the performance of marketing channels that are often seen as downstream channels due to their strong performance on a last ad basis.
With the exception of affiliate marketing, all channels saw an increase in order credit when analysed through an attribution lens.
The report suggests that this undermines the view that moving to an attribution model may negatively impacting channels like search and email.
Additionally, as these channels tend to use performance-based pricing, data automation from the attribution platform to the appropriate bidding agents will make the efficiency gains of attribution an automated function, as opposed to a manual function.”
Social certainly appears to be a key indicator for purchase intent, but it is still unclear whether social can be said to drive sales or is simply the channel that consumers use to engage with brands they are already ‘fans’ of.
What is apparent is that working out an attribution programme is a useful tool for brands when making decisions about marketing budgets.
The data in this report came from advertisers using ClearSaleing's platform, including retail, luxury retail, travel, healthcare, education and financial services, between January 1st 2010 and August 31st 2011.
This included more than 56bn impressions, 2.7bn clicks and $13bn (£8.3bn) in revenue.