• by Todd Labeau , September 25, 2012

JC Penney, Nordstrom and Gap have all opened and closed stores on Facebook in the last year, but the drive to get eCommerce conversions from Facebook (fCommerce), or any social media platform, is nothing new. Brands have been questioning the ROI for a while now. Finding the value in Facebook as a sales channel may actually mean rethinking the role the platform plays in aiding sales. Despite ongoing focus to build ROI through social media, brands focusing on the traditional definition of commerce through these channels – direct sales on a site – are missing the boat on what’s far more important to social media users. The real value of Facebook’s 900 million users is the amount of engagement and reach a brand can achieve; not the direct dollars the platform can push their way.
 
The key for Facebook’s survival is to maintain a level of interest and relevancy that sustains the ad revenues. From beefing up its search engine, to acquisitions like Instagram, to figuring out how to serve ads on mobile devices (their highest volume of users), it's clear Facebook is aggressively and proactively trying to stay relevant, which directly feeds its monetization ambitions. Additionally, features like Facebook’s rumored “want” button could potentially help establish the platform as a virtual marketplace for consumers and brands to meet and make connections.
 
Reuters/Ipsos research states four out of five people have never made a purchase via Facebook influence. With nearly $3.7 billion in Facebook advertising revenue last year, it's clear brands have been trying a lot of different strategies to change that statistic, including fCommerce strategies. The strategic shift away from those models suggests that an awareness/brand building approach is the best strategy for producing the highest ROI from Facebook. While that may not translate into direct revenue, neither does most brand building advertising (e.g. display media on any other site). Additionally, a 2009 Forrester/iProspect study found that “38% of Internet users learn about a brand through display advertising and that 33% of those people eventually purchase something from a brand they are familiar with.” In short, awareness drives purchase, and building this awareness through Facebook could potentially make all the difference.

Todd Labeau, VP, Director of Interactive, Lindsay, Stone & Briggs (LSB)