Do social networks deliver the goods?

28th September 2012

It’s not an anti-social question, but will social media ever deliver the sales your business needs?

Global phenomenon it may be, but new research has indicated that more conventional forms of digital advertising still rule the roost in delivering those all-important pound notes.

US-based Forrester Research has found that as little as 1% of online purchases come through social channels. The findings surfaced after Forrester and marketing firm GSI Commerce examined 77,000 online orders placed in April 2012 over a period of 14 days.

The results show that despite the popularity of Facebook and other social networking sites – combined with the increase in smartphone and tablet use – buying habits aren’t being heavily influenced by the presence of ads on these kinds of sites.

And, in fact, 39% of new customer transactions came from ‘traditional’ pay-per-click ads or from search engine results.

Probably not what Facebook wants to hear, given the furore over their share flotation and subsequent stock market performance. The internet giant is now embarking on a programme to rid itself of fake accounts in a bid to become more attractive to advertisers.

Social media still has many plus points for business, but the data would seem to support the theory that it’s best-used as a means for raising awareness of a brand or to engage with customers and their feedback – rather than a way of attracting straight-up sales.

Pay-per-click (PPC), organic searches and email marketing appear to offer a more consistent return on your advertising investment. Email marketing in particular scored high in the findings with 30% of repeat customers buying after receiving a direct email.

For SMEs, social networking still represents a valuable marketing tool especially when budgets are tight and resources thin on the ground. But concentrated PPC campaigning, effective emailing and good search engine optimisation/keyword selection throughout your website is still the bedrock of a successful digital marketing strategy.