Social Marketing Drives Higher Value, Revs

Randy-Smith

Premium display advertising and social marketing require considerable time and money, so it’s fair for companies to question their effectiveness. Do they actually drive product sales, media subscriptions and memberships?

New research finds a direct correlation between visual and emotional resonance and higher revenue per order.

In fact, although social is hardly the highest-traffic channel -- nor the leading driver of sales volume -- its presence in the so-called “purchase path” drives higher-value orders (in terms of revenue per order) than natural and paid search combined.

That’s according to new research from advertising analytics and attribution platform ClearSaleing.

“Everyone believes that it’s the site-side activity that’s important for conversion quality,” said Randy Smith, CEO of ClearSaleing. “Media with higher visual quality and with [more] trusted content] is pretty significant.”

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Indeed, the presence of social media in a purchase path drives higher-value orders, in terms of revenue per order ($280), than natural search and paid search combined ($230.07). When display was included in a conversion path, the average revenue per order increased to more than $206 -- almost 65% more revenue than the overall average order size of $135.37, according to Smith. 

Although social media is still in its early stages, it is proving to be a core channel for driving intent, Smith added.

When social media was presented in a purchase path, the social media click accounted for $5.24 in revenue, ClearSaleing found -- a 20% increase from paid search ($4.38) and an 84% gain from natural search.

Meanwhile, premium publishers showed twice the ability of ad networks, and four times the ability of demand-side platform’s (DSPs), to introduce and initiate new customer conversations. What’s more, roughly 8.4% of all premium-publisher advertising interactions were the beginning of new purchase paths, versus 3.62% for ad networks and 1.58% for DSPs, ClearSaleing found.

Still, that doesn’t mean that ad networks and DSPs don’t serve an important role for advertisers and publishers. To understand why, it’s important to first understand ClearSaleing’s methodology, which defines a customer purchase path in three sections.

It includes “the introducer” -- the first touchpoint in a multistep purchase path; "the closer” -- i.e., the final step a customer takes on their journey to conversion; and “the influencer” -- or all steps between introducer and closer in the purchase path that influence a conversion.

According to Smith, ad networks and DSPs are vital “influencers,” which means they do their part in influencing conversions and connecting the entire purchase path.    

For its research, ClearSaleing analyzed advertisers across multiple verticals, including retail, luxury retail, travel, health care, education and financial services, between Jan. 1, 2010 and Aug. 31, 2011.

Smith said his team studied more than 56 billion impressions, 2.7 billion clicks and $13 billion in revenue tracked through ClearSaleing’s own system, as well as channels across the spectrum of online marketing, including intensive display advertising, social media channels, paid search, natural search, email marketing, affiliates, and comparison shopping engines.

5 comments about "Social Marketing Drives Higher Value, Revs".
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  1. Grant Crowell from ReelSEO.com, February 9, 2012 at 9:31 a.m.

    I can't understand why MediaPost never includes the actual hyperlinks to what their own contributing bloggers are referring to! Talk about bad usability, guys.

    Here's the link to the ClearSaleing report. (MediaPost, don't make us do your job, OK??)

    http://www.clearsaleing.com/about/press-releases-and-media-kit/in-the-news/

  2. Grant Crowell from ReelSEO.com, February 9, 2012 at 9:31 a.m.

    Actually, it's here:

    http://www.clearsaleing.com/a-guide-to-market-leadership-in-2012/

  3. Henry Blaufox from Dragon360, February 9, 2012 at 10:56 a.m.

    This study is important because of its depth. The sample size is enormous, so the results - a considerably higher rate of spend per online sale when social media are in the conversion path - have to be acknowledged.

    But good, credible social engagement of you consumers is essential. If the social channel doesn't provide trust and confidence (that is, if it is artificial and looks phony,) it will drive consumers away. The brand will also risk negative comments, which fly across the online social spectrum.

    So the key is to rely on your social team and social marketing agency for the professional, genuine work. It is laborious and detailed, not cookie-cutter. But the results are worth the money and time spent.

    If you don't have a trustworthy social marketing agency, get one.

  4. Ted Rubin from The Rubin Organization / Return on Relationship, February 13, 2012 at 12:23 p.m.

    Consumers now have “the channel of me” – their opinions now create the reality of the brand, and they are watching to see which brands are truly paying attention to them. Shoppers want to know more than just which brands are offering worthwhile promotions; they also want to know which brands are open to being influenced by shopper opinions and behaviors. Those are the brands they will purchase from and that is one of the many reasons social is having such a dramatic effect on shopping and path-to-purchase.

  5. Karen Ticktin from brandthis, February 13, 2012 at 2:56 p.m.

    I think it's key to remember that social media are not direct response vehicles but rather their beauty is in the slower burn. It's about buidling and nurturing longterm relationships over the course of which brand loyalists are transformed into advocates. Totally agree with Ted that the consumer wants added value but also wants to be heard and valued.

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