ROI on social networks and online retail sales

Still playing traditional marketing numbers games, this mob (from technology news daily:

JupiterResearch has found that despite the growth of social networks and online communities, they have little effect on influencing online retail sales. Outlined in a new report, “US Retail Consumer Survey, 2007,” social and community sites are only driving about 12 percent of online shoppers to buy more than planned.

The effectiveness of social and community sites, like MySpace, in driving retail sales is still emerging. Because 53 percent of online shoppers go directly to the retailer website while they are shopping, in contrast to the only three percent utilizing blogs, it’s clear online shoppers continue to seek out direct access to locations where they can purchase a product or the source of that product when researching and purchasing both online and off-line.

According to the report, social and community sites help reaffirm purchase decisions as 29 percent of online shoppers say they make better decisions after using these sites. Yet retailer must also manage their expectations with regard to incremental sales potential. In this increasingly competitive retail market, those that use an affiliate model will maximize opportunity with appropriate social and community sites.

The complete findings of this report are immediately available to JupiterResearch clients online at www.jupiterresearch.com.

US Retail Consumer Survey, 2007

An old old story – if you don’t do it, and your competitor does, they just might turn a corner that you can’t compete on. Anyway, as hinted above, social networks aren’t about where to place ads on a portal page, but all about social capital and knowledge. A report from McKinsey and a now defunct company (well, it was the late ’90’s) showed that consumers trust peer reviews in an online forum 5x more than so-called expert testimony.

By the way, is 12% really bad? I’ve lost sight of what is acceptable re: cost of acquisition online lately.

Laurel Papworth

Named by Forbes™ Magazine in the Top 50 Social Media Influencers globally, named Head of Industry, Social Media (Marketing Magazine™) and in the Power150 Media bloggers (AdAge™). CERT IV Training and Assessment certified trainer (Diplomas and Certificates etc) Adult Education. Laurel has manager Facebook Pages for Junior Masterchef, Idol, Big Brother etc. and have consulted on private online communities for banks Westpac, not for profits UNHCR & governments in SE Asia. Lecturer, social media, University of Sydney for 10 years and Laurel has 11,000 online students. Laurel Papworth personally connects to 6 million followers online and has taught around 100,000 people in the last 10 years how to be social media managers.

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