Commentary

2016 Is Set To Be The Year For Social Commerce

For many social networks, ad revenues have long been at the core of their impressive quarterly revenues. But this situation is facing a threat: many of today’s increasingly tech- and privacy-savvy Internet users know how to combat the tactics that make platforms like Facebook billions of dollars. By using ad-blocking tools, regularly deleting cookies or using anti-tracking software, traditional advertising and revenue strategies can be disrupted.

Of course, some perspective is essential here. Ad blockers might have grabbed headlines over the last year, but still only a minority are using them. Yet it’s hard to ignore the fact that social networkers are typically ahead of average when it comes to managing their digital footprints, with our research showing that as many as four in ten Facebookers delete cookies each month in order to prevent Web sites from remembering them. And three in ten Facebook active users say they use ad-blocking software on their main computer, with figures even higher among younger groups like Instagrammers.

advertisement

advertisement

Naturally, some social networks will be impacted by this much more heavily than others. After all, disable ads on Facebook and it can still show you a range of commercial posts based on what other users have liked (or are voluntarily sharing on their news feeds). What’s more, most networks will have behavioural data as well as at least some self-reported demographic stats they can draw on in order to push relevant native content.

Even so, it’s not hard to see why several networks are making a lot of noise about social commerce as a potential new revenue stream, with Facebook, Twitter and Pinterest among the names to have experimented with this in the past year. And the scale of the opportunity here is considerable, with social networkers typically being enthusiastic online buyers. Globally, our data shows that two-thirds or more of active users on most of the major platforms have purchased a product online within the last month, with particularly strong peaks among Snapchatters (where youth is a factor) and WeChatters (where regionality is key, most of them being based in APAC where e-commerce rates have long been some of the highest in the world).

For each platform, it is smaller but still significant numbers who say they turn to social networks when conducting product/brand research. Our data shows that over six in ten WeChatters do this already, as do 50% of Instagrammers and 40% of Facebookers. But it’s at this point where we reach the biggest current stumbling block: while networkers are comfortable using social platforms as part of their purchase journey, the desire to complete transactions on these sites is much less pronounced. According to our research, just 11% of Internet users in fact say that they would purchase through a “buy button” on social media. That rises slightly to around a fifth for Snapchatters, WeChatters and Tumblr users, but falls as low as 9% for Facebookers. In short, people don’t mind doing some digital window-shopping on social networks, but they remain much more reticent about completing a transaction in the same space.

It’s here that we can expect to see the greatest focus in 2016 -- with many networks striving to convert potential into reality. Names like WeChat and LINE have already pushed social commerce into the mainstream in many parts of Asia and now the contest to achieve the same in other world regions will be contested fiercely. And while Facebookers are currently some of the least enthused about “buy buttons” -- a direct result of Facebook having the broadest age profile in terms of its user base -- it’s worth noting that it also has by far the biggest global audience. So even relatively small percentages could still translate to it becoming the dominant name for social commerce.  

It’s in this context that we should be viewing the arrival of "M" on Facebook Messenger, its voice-activated search tool. As social networking behaviours continue to migrate to mobile, they are moving to a space where traditional search activities are not as established as they are on desktops or laptops. There’s a chance to reconfigure how people search for -- and ultimately buy -- products and to incorporate several stages of the purchase journey within the same apps. Networks are primed to capitalise on this, and it’s surely no coincidence that "M" on Facebook Messenger is a tool that could find and purchase items on the user’s behalf, drawing on all the demographic and behavioural data owned by Facebook in order to be as accurate and relevant as possible. With apps having been central to the development of social commerce in APAC, we have to expect other regions to follow suit. 

Next story loading loading..