Social Media Influences Less Than 1% of Online Purchases [Updated]

Retailers have invested heavily in making money off social networks like Facebook and Twitter

But despite all the interest, it doesn’t look like social networks do much to drive sales, according to a recent report by Sucharita Mulpuru at Forrester Research

Less than 1 percent of the online transactions she tracked could be traced to a social media post, Mulpuru wrote in her report.

Paid search traffic is the most effective way for retailers to engage new customers, while email marketing captivates returning customers, Mulpuru wrote.

While social networks keep customers engaged with the brand, they don’t result in any immediate monetary benefit, Mulpuru wrote:

Social tactics are not meaningful sales drivers. While the hype around social networks as a
driver of influence in eCommerce continues to capture the attention of online executives, the
truth is that social continues to struggle and registers as a barely negligible source of sales for
either new or repeat buyers. In fact, fewer than 1% of transactions for both new and repeat
shoppers could be traced back to trackable social links.”

Mulpuru didn’t study small businesses, which she said do disproportionately well in social commerce.

Here’s a graph showing how effective email marketing and paid searches are:

forrester chart

[Source: Business Insider]

What about social sources that drive people on ecommerce sites to create conversions? Here’s an infographic from Richrelvance:

In the end, different thoughts and result about offline shopping from Facebook and Datalogix about Facebook Ads conversion. After measuring 45 campaigns over the past year, the companies found that in 70% of cases, every $1 spent on Facebook led to an additional $3 in sales.

(http://www.insidefacebook.com/2012/09/24/facebook-partnership-with-datalogix-helps-measure-offline-impact-of-online-ads/)

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