Social Media Has No Effect on Sales? We Think Not.

by Andrew Krebs-Smith | May 11

A couple of days ago, Forrester Research and GSI Commerce released a report which analyzed data from online retailers, examining the effect that their social media efforts had on influencing purchases. The results were, at first glance, an open-hand slap to the face for social media, as the data showed that less than 2% of sales were driven by the brands’ social media marketing.

On the day this report was released, the Social Fulcrum team was busy working on an in-depth, sales-focused case study for an eCommerce client. We spent the day crunching numbers, counting clicks, and measuring interactions. Upon completion, this daunting figure stared us in the face: in just a short three-month-long campaign, we garnered $50,000 in sales for this client. [It’s important here to note that Social Fulcrum, and Social Fulcrum only, was tasked with the launch and promotion of this client’s website. It was not in existence before we began our campaign, and there were no other marketing efforts other than ours underway during these three months. In other words, we can say without a doubt that these sales were a result of Social Fulcrum’s social media and word of mouth marketing efforts.]

Wait a minute – “$50,000 in sales” on the one hand, and “social media has no bottom line impact” on the other? Something doesn’t add up.

After examining the study a bit more carefully, we realized that the study was likely quite accurate. It’s what they were studying that was off-track.

The report claims that “less than 2% of orders were the result of shoppers coming from a social network.” In other words, less than 2% of orders were made after a user clicked through to the website directly from a social media platform. What the report didn’t account for were the purchases made by users who had direct interactions with a brand online and, as a result of that interaction, visited their site at a later time and made a purchase. Or what about the purchases made from users who signed up for an e-newsletter via a Facebook tab and then clicked through to the website from an email they received from the brand? Did this traffic come directly from Twitter or Facebook or another popular platform? No. But were these purchases influenced in some way by social media marketing? No one can say for sure, but $50,000 in sales tells us it’s quite likely.

So, what’s the moral of the story? The effects of social media are often not direct, and a great Facebook page isn’t¬†necessarily¬†going to immediately send a million people to your website, ready to purchase your products. But that same great Facebook page, integrated into a strategic online marketing plan, can increase brand awareness, foster customer loyalty, generate online buzz, and do a whole bunch of other awesome things that can translate into increased sales. Indirect does not mean ineffective.

Andrew Krebs-Smith
About the author

Andrew Krebs-Smith

Andrew sings our praises to anyone that will listen. Before founding Social Fulcrum, he developed and managed social media strategy for accounts including Pfizer, Ocean City MD, The National Aquarium, and Strayer University. Andrew loves food, travel, music, exercise, and tea. Connect with Andrew on Twitter and LinkedIn.