In spite of the economic downturn, eCommerce registered a near 10 percent growth to reach US$227.6 billion in 2010 spending according to the latest ComScore report. Industry experts attribute much of this growth to the strong involvement of brands in social media among other marketing campaigns. Social media has proven to be a hub not only for individuals but also for eCommerce companies who optimized the channel to easily conduct marketing campaigns to opt-in users. Facebook, in particular, garnered much of brand marketers' attention, with its compelling statistics on user base and engagement duration. If anyone still harbors doubts about the inevitable integration of eCommerce and social networks, then the recent news on Amazon's ambitious plan to allow their users to connect their Amazon and Facebook accounts is a prelude to a looming megalithic phenomenon that might be tentatively called social commerce.
Here are some reasons why social media has attracted eCommerce practitioners en masse:
1. It is cost-effective.
2. It provides feedback.
3. It shows how well competition is performing.
4. Fans and followers tend to make purchases and recommend brands to their contacts.
And here are some statistics to give you an idea on how tightly eCommerce is embracing online social networks:
1. According to ZenithOptimedia, web marketing expenditures will increase by about 14 to 18 percent in 2013, much of the growth propelled by video and social media.
2. Groupon announced that it helped global customers save an astounding US$ 850 million.
3. As stated by Facebook COO Sheryl Sandberg, the largest advertisers on Facebook are infusing more advertising money into their social media campaigns by as much as 20 times!
4. Venture capitalists ranked social media as the number 1 online sector to invest in.
5. According to Constant Contact, Facebook ranked third after websites and email marketing as the most prioritized channel for promoting small businesses.
6. Forrester Research reported that online retail sales are expected to grow annually by 10 percent for the next five-year period. In addition, online sales will account for more than half (53 percent) of all retail sales in the US by 2014.
7. HubSpot reports that brand followers on Facebook are 51 percent more likely to buy while brand followers on Twitter are 67 percent more likely to consider a purchase.
There is no question that you need to join the bandwagon or be left behind by competition. Doing so at the soonest time is also critical. However, before you draw up a budget for your social media campaigns, it is important that you establish the precise criteria that you will use later on to assess whether the money you have been spending actually delivers commensurate value for your business. How do you measure ROI for campaigns conducted in social networks?
This question is critical because many experts believe that almost half (around 47 percent) of companies that conduct campaigns on social networks either have poorly drawn metrics or have no clue whatsoever on how to measure social media ROI. In general, marketing veterans classify social media measurements into three broad categories: 1) quantitative metrics; 2) qualitative metrics; and, 3) ROI metrics. Qualitative metrics entails tracking presumed market reaction to the marketing campaign, which may be reflected in site visits, page views, growth in the number of followers, bounce rate, and duration of visits. Meantime, Qualitative metrics aim to assess the "emotional" components the target audience exhibited after being exposed to the campaign's dynamics. These include feedbacks from surveys, polls, or contests. Lastly, ROI is the bottom line measurement--meaning the final yardstick with which the success of the campaign is assessed. This measurement accurately tracks actual conversions (sales) as a result of launching the social media campaign.
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