Social Media Conundrum: I Like You, But Do I Buy Anything From You?

Marketers continue to exhibit heady enthusiasm for social media, in particular, Facebook, Twitter, and, lately, Pinterest. It is easy to become starry-eyed when you consider Facebook’s enormous user base, Twitter’s strong growth, and the red-hot interest in Pinterest. It is just as easy to think that turning one’s marketing budget upside down and dumping every dollar into social media is a sound strategy, too.

Paul Adams, Facebook’s Global Brand Experience Manager and a former social researcher at Google, has an interesting way of looking at social media in the context of “the advertising strategy of the future:”

“The majority of effort and spend will be supporting an always-on strategy based on many, lightweight interactions over time to build deep relationships and loyalty. A minority of effort and spend will be supporting a small number of heavyweight interactions with true fans to achieve specific goals (mostly around driving awareness of new things).”

The “lightweight interactions” Adams refers to occur via social media, while the “heavyweight interactions” are represented by traditional advertising.

Is It an Either-Or Proposition?

Adams’ view is in keeping with current thinking about social media, which increasingly dominates the media buys of major brand advertisers. Still, it is a perspective seen through a Facebook lens. While the marketing pendulum is swinging toward social media and away from traditional advertising, is it wise to place all the marketing eggs in one basket? There remains, after all, this nagging feeling that the marketing argument for social media in terms of conversion to sale has yet to gel.

Last December, I cited a survey from August 2011 that indicated only 25 percent of marketers use incremental sales attributable to social media as their primary measurement. The majority of marketers rely instead on a simpler metric: counting the number of “Likes” they receive on their Facebook page. Last month, I referenced a Bloomberg report that suggested Facebook “Likes” were not a good indicator of online sales; in fact, a number of major retailers were quietly closing down their Facebook storefronts.

The reality is ROI should be driving the marketing bus. Marketers need to take the same disciplined approach with social media that they take with any media. That’s why a marketer focused on accountability needs to ask: Am I getting the best return on my social media investment?

We can’t afford to have our marketing judgment clouded by the mass hysteria over social media. Yes, it’s wonderful to get tens of thousands of fans or followers, or hundreds of thousands of video views. It’s even better to see consumers truly engaging with a brand. But shouldn’t we have some idea whether fans, followers, and viewers are turning into real leads—and whether those leads are converting to sales?

The Measurement Gap

Measuring social media is a challenge made larger because there is a “gap in technology” between front-end and back-end measurement, according to Malcolm Cowley, CEO of Performance Horizon Group (PHG). Cowley co-founded PHG about two years ago, after selling the affiliate marketing network to AOL for $125 million in 2008. PHG offers ExactView, a software service platform for global brands and their agencies to manage revenue and make critical decisions through data analysis. Among the company’s clients are Nextag, Sony, and T-Mobile.

I spoke with Cowley about the need to track social media so marketers can understand its true value and effectiveness. “There are many ways to track tweets and Likes,” Cowley said, “but that doesn’t tell you if social media is a viable sales channel. Brands are always trying to find that conversion. Social media shouldn’t be viewed in isolation, but rather at the macro level. It’s important to get all of the data from all sources, like social media, search and partners, under one roof as part of the bigger picture.”

Cowley said there is “increasing pressure” on Facebook to provide data about its effectiveness on the front-end, but it’s up to marketers to determine the conversion on the back-end. “The front-end has developed faster than the back-end, and we’re still catching up,” explained Cowley. “Nobody has yet managed to create an umbrella system that looks at the whole solution.”

Understanding What Works

Cowley thinks marketers would be wise to step back and evaluate social media with a critical eye. “The first question marketers ask should be ‘What am I truly trying to achieve? What are my overall objectives for the brand?” said Cowley. “I see a lot of brands dipping their toe in the water, getting excited about the social media channel, but not fully understanding how that channel works.

“I don’t know any company in the world who isn’t interested in driving sales,” Cowley continued. “If I walked into a company tomorrow and said, ‘We’re not going to drive any more sales this year, we’re just going to engage consumers to talk about our products and services, and we’re not going to look at whether that actually drives business,’ I think I’d be pushed out the door. Every brand wants more sales for less money, and that’s the layer you have to put over social media.”

Indeed, that is the piece of the puzzle that is still missing – objectively quantifying results and being able to directly attribute sales to social media. It is imperative that marketers close the loop and validate the value of social media; otherwise, they are just assuming social media is working. And in marketing, assumptions get you nowhere fast.

About Barry Silverstein

Barry Silverstein is a freelance writer/marketing consultant. In addition to writing for ReveNews, he is a contributing writer to, the world’s leading online branding forum. He is the author of three marketing books, The Breakaway Brand (co-author, McGraw-Hill, 2005), Business-to-Business Internet Marketing (Maximum Press, 2003) and Internet Marketing for Technology Companies (Maximum Press, 2003). Barry ran his own Internet and direct marketing agency for twenty years. You can find Barry on Twitter @bdsilv.

3 Responses to Social Media Conundrum: I Like You, But Do I Buy Anything From You?

  1. […] Social Media Conundrum: I Like You, But Do I Buy Anything From You?, […]

  2. Fans, Likes, Re-tweets, etc. are great.  But ultimately you want social media to improve conversion rate.  That’s why the quality of your followers is much more important than the quantity.  It’s better to have a smaller group of engaged followers that will make a purchase than a large  number of followers that might not even be paying attention to what you have to say.  

  3. David Swede says:

    Great post. Social media is great, but without the full spectrum of marketing, both online (seo included) and offline, it’s a mistake to think that because social media is free, it will deliver clients fast or even perhaps generally.