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Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sun Sept 9 2012 19:23:50

Taking the Air out of the Social Ecommerce Myth

By: David Steiner
Sponsored Link
Being a cynic by nature, I've never been fully convinced that any of the "Big Three" social media tools was effective in driving traffic to product sales. Self-anointed social media gurus hold seminars, write books, show up at conferences and blog about the proper methods of "Tweeting," "Liking," or "Pinning" your way to online success. And yet all of that hype never seems to fully drown out the hum of online merchants telling us that, despite the hours and hours of time they spend on Twitter, Facebook or Pinterest (and any of the other social media tools out there) marketing their sales, the returns are negligible. So what's the deal?

We Tweet and Share our articles daily and post occasionally in Linkedin groups, in an attempt to take advantage of whatever additional traffic these services might offer. However, discussions tend to take place in private areas of these sites, outside of the prying eyes of Google's searchbots, so there is no real search engine benefit. To be sure, there are some fascinating topics and conversations going on in these groups, but how this drives social media to ecommerce - and I mean making sales, not sharing information - escapes me. There seems to be a mile-wide ravine between how well these tools work for bringing people together, and actually converting them into customers. 

So we decided to go up one level from the online merchants on the frontlines of ecommerce. EcommerceBytes approached several online marketplaces and asked them if they would be willing to share their sites' referral numbers from Facebook, Twitter and Pinterest. These are sites that have invested time, energy and money to integrate social media tools into their marketplaces. They have real skin in the game.

Five online marketplaces were open to sharing their data with us. Combined, these marketplaces accounted for over 100 million visitors during the past year - a sizable sampling. We guaranteed anonymity to these marketplaces, and promised to publicly share the data only in the aggregate. Here's how the data that they provided to us broke down:

Percent of Traffic to Online Marketplaces from Social Networking Sites
Social Networking Site % of Traffic
Facebook

0.55%

Pinterest

0.41%

Twitter

0.12%

Source: EcommerceBytes survey of online marketplaces conducted September 2012

The numbers represent the percentage of traffic referred to these marketplaces from each of the three largest social media tools. This may not reveal the entire story, such as peripheral traffic from these sites (someone who may find a site via Facebook, then visit at a later time) but it is quite telling (there is some data in this NewsFlash article from Monday with the conversion rates that the participating sites received from visitors referred by these social media tools).

Combined, Facebook, Twitter and Pinterest accounted for just 1.1% of the total 100 million visitors to these five marketplaces. Combined. To put that in perspective, that's a smaller referral percentage than EcommerceBytes gets from Ask.com, HotBot and Lycos combined. It's what I consider incidental traffic.

Even more revealing were some of the comments coming back from the participating marketplaces - which again, we share anonymously:

Marketplace A CEO: What sane person is going to subscribe to the Twitter or Facebook feed of a business that is relentlessly self-promotional? And if you aren't relentlessly self-promotional (posting at least one item per day), how much traffic can you possibly drive from the social media sites?

Our site has Facebook sharing buttons prominently displayed on every item page, and every (showcase). We let users tweet items directly from the item page, and we usually get a few hundred tweets per day about our items. We even went "all in" on Pinterest and put their full widget on both our item detail page, and all of our search result/store browsing pages. The sum of this implementation is that we have made every reasonable effort to allow people to share their items (their own or others) via any of the major social outlets. 

So, on the macro view, I don't believe social media is an effective way to drive traffic, relative to other options. But that isn't to say there aren't isolated success stories.

Marketplace B CEO: Shortly after Facebook started offering advertising on their system we decided to give it a try. We let our campaign run for about a week then reviewed the results. During our test campaign we picked up several thousand new "likes" for our facebook page, but further inspection showed that these new "Likes" were mostly from girls and boys in their early teens. This was odd, because historically our target audience has been women between the age of 40 and 60.

To make sure that these teens that Facebook had sent us were not some overlooked user demographic that we were not aware of, we went back and checked our internal site analytics to see if any of the referrals from facebook during the test period and several weeks after had converted to sales on our site. We were quite surprised to see that there was no significant increase in sales that we could link to the test advertising campaign on Facebook.

Comments such as these reveal a skepticism on the part of marketplace executives about the value of the traffic that comes from social networking sites. 

I recall some of eBay's past attempts at incorporating social networking into their site - blogs, neighborhoods and wikis, for example - if they had been successful in driving traffic, wouldn't those features still be around? In July, we wrote about eBay's total revamp of its MyWorld pages to make them less customizable. It also makes me wonder how their new acquisition of Pinterest-clone Svpply.com will pan out? Perhaps they can bridge what appears to be a fundamental disconnect between social media and ecommerce.

So why the big push for social ecommerce? An interesting phenomenon occurs when an industry invests billions of dollars trying to establish itself as the "next big thing." Stock analysts are given extravagant "dog and pony" shows, the press is pitched relentlessly, and a cottage industry of "evangelists" springs up almost overnight. A stampede of users jumping aboard ensues, and it quickly becomes difficult to separate common sense from hyperbole. 

Social ecommerce has had more than a fighter's chance to gain traction, however after all these years, there is no tangible evidence that it's worth the time and effort involved to use these tools to drive sales. I'd be happy to have a social media "expert" come in and comment to the contrary, after all this is how they're earning a living.

Perhaps it's time to rethink the amount of time and energy you, as an online merchant, spend Tweeting, Liking and Pinning and evaluate what you are really getting in return. Have you spent the time to see what's working, if anything? I say it's way overdue for this baby to soar, or let's finally put a pin in it.

About the Author
David Steiner is President of Steiner Associates LLC, publisher of EcommerceBytes.

Reading EcommerceBytes Blog: Taking the Air out of the Social Ecommerce Myth
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Readers Comments

Perminate Link for Taking the Air out of the Social Ecommerce Myth   Taking the Air out of the Social Ecommerce Myth
This user has validated their user name. by: TheUglySweaterShop
       
Sun Sep 9 19:51:09 2012
My stats show I get a lot of traffic (and sales) from Wanelo, Twitter, Facebook and Tumblr.

Since I refuse to pay to be seen in Google shopping, it is worth my time to engage my buyers on those sites.  It also increases my organic search ranking.  It also is fun (if you aren't having fun doing your job, you're doing it wrong).

Then again, I actually SELL to the markets that use social media.  By asking the question of sites that don't sell to them, you will get a different response, obviously.
Perminate Link for Taking the Air out of the Social Ecommerce Myth   Taking the Air out of the Social Ecommerce Myth
This user has validated their user name. by: 360
       
Sun Sep 9 19:54:58 2012
I stopped using FaceBook and Twitter last year to market my sales. I found they were totally useless to sell and a big timewaster to boot!
Perminate Link for Taking the Air out of the Social Ecommerce Myth   Taking the Air out of the Social Ecommerce Myth
This user has validated their user name. by: TheUglySweaterShop
       Web Site
Sun Sep 9 20:21:13 2012
I forgot to mention that by actively engaging my customers, I am able to stay on top of trends in my market and adjust accordingly.  I have learned a LOT from my customers!  They are awesome :)

In fact, if it weren't for social media, this particular store wouldn't have existed in the first place.  I've been selling clothing online for 12 years, but this particular store was started in 2009 after I heard from people on Twitter that they were having a hard time finding sweaters for ugly sweater parties.  Of course, everyone knows what an ugly sweater party is now, but a few years ago it was social media that introduced them to the public and made them as wide-spread as they are today.

I opened this store 2 months before Christmas that year and had zero indexing in Google for my first holiday season.  I still managed to almost completely sell out because of Twitter marketing.  It was crazy--I had people tweeting and emailing me asking for more.

Year over year, traffic and sales have only grown.

Since then, a bunch of sites that sell what I do have sprung up, which I think is great!  When someone contacts me looking for something I don't have, I point them to another seller who does.

Now, I'm no bigtime seller, I can't compete by paying for placement on Google, etc like the bit "marketplaces" you quizzed surely do.  Instead I can keep making my customers happy and engage with them as a small seller, and for me, that is all I want.  Happy customers :)
Perminate Link for Taking the Air out of the Social Ecommerce Myth   Taking the Air out of the Social Ecommerce Myth
by: alixibloun This user has validated their user name.
       
Sun Sep 9 20:51:48 2012
Interesting post. I just checked my stats and show pretty much the same numbers. My biggest referrer is Google, but I see several Googles in my analytics. Does anyone know if one is for Google search and one for Google Shopping? (and what other Google sources might be sending visitors)
Perminate Link for Taking the Air out of the Social Ecommerce Myth   Taking the Air out of the Social Ecommerce Myth
This user has validated their user name. by: Doc
       
Sun Sep 9 21:59:46 2012
I usually do a Google search for what i am in the market for. Amazon sure owns the 1st page of organic Google results.

Twitter censors a lot of tweets and Facebook fan pages dont get indexed very well in search.  
Perminate Link for Taking the Air out of the Social Ecommerce Myth   Taking the Air out of the Social Ecommerce Myth
by: Sierra This user has validated their user name.
       
Sun Sep 9 23:09:59 2012
I don't need FB to drive sales to another site. I do quite well selling right there on FB!
Perminate Link for Taking the Air out of the Social Ecommerce Myth   Taking the Air out of the Social Ecommerce Myth
by: truehandmade This user has validated their user name.
       
Sun Sep 9 23:30:01 2012
Thank you for your post on a very important topic that no one talks about; I agree with your points as well as those made by sellers who have put great efforts into this fruitless exercise for months and years.  The comments by CEO of mkplc A are more interesting!  Sellers on most if not all these sites are TOLD that they have to do 150% of their OWN mktg because the sites don't do ANY themselves but now he/she is saying this is relentless self-promotion?  Isn't that what they tell their sellers to do every day?  Maybe that's why these social links ain't workin'!  They were overwhelmed with millions of seller promos ENCOURAGED by the sites!  They killed the tool but still encourage their sellers to do all their own mktg, where? how?  with what money?  
What a contradiction!  
Many of these mktplc sites are expert at feeding their sellers a lot of myths and the social media lie is only one of many many many more that center around coaxing a lot of free labor and free mktg that sellers continue to provide for them - they don't have to do the work and they sure haven't spent the big bucks on mktg & advertising!
Perminate Link for Taking the Air out of the Social Ecommerce Myth   Taking the Air out of the Social Ecommerce Myth
by: Belle This user has validated their user name.
       
Sun Sep 9 23:38:01 2012
I don't 'Facebook', but I do tweet and pin. I tweet every day, but I only pin maybe once a week. Funny, because I like Pinterest much more than Twitter.

I've always wondered if twitter was worth it.

Thanks for writing this article! You just saved me a boat load of time. I'm done tweeting and will concentrate on helping Pinterest shoot past Facebook.
Perminate Link for Taking the Air out of the Social Ecommerce Myth   Taking the Air out of the Social Ecommerce Myth
This user has validated their user name. by: Rocky
       
Sun Sep 9 23:50:03 2012
Without Amazon and eBay participating, and without knowing what goods/services the participants are selling... what good is the data?
Just askin'.
Perminate Link for Taking the Air out of the Social Ecommerce Myth   Taking the Air out of the Social Ecommerce Myth
by: JoJo This user has validated their user name.
       
Sun Sep 9 23:51:35 2012
Some success with social media but it's really hot and cold for me.  I have to admit that it's not my primary focus.  

I do know someone who bypasses it all and sells directly on Facebook with a fair amount of success, similar, I suppose, to @Sierra.

@Belle You can link Pinterest to Twitter so all your pins are automatically Tweeted saving you time.  Although I suspect Twitter is now quite a lot of bots Tweeting to other bots, it still seems to help with the search engine rankings.

There was a time when I saw a lot of Twitter traffic, and then Facebook, but now it's Pinterest.
Perminate Link for Taking the Air out of the Social Ecommerce Myth   Taking the Air out of the Social Ecommerce Myth
This user has validated their user name. by: elpereles
       Web Site
Mon Sep 10 01:09:03 2012
Congratulations to all the sellers that are using and getting sales (because traffic is nothing without a sale unless show get money from ads) by the social networks.

Now seriously, it is nice to read some CEOs making comments, but hiding their ''faces'' for something so important to them. I gives me feel insecure and believe that they consider it a waste of time and money.  
Perminate Link for Taking the Air out of the Social Ecommerce Myth   Taking the Air out of the Social Ecommerce Myth
This user has validated their user name. by: eBankrupted
       
Mon Sep 10 01:34:23 2012
Social networking is suicide for importers because overseas suppliers data-mine, shadow and steal contacts, ideas and entire customer market networks.

Vintage collectors and sellers would see more of a benefit because Asian manufacturers can't compete with the historic collectable niche.

EBay has sold it's soul to the devil in attempt to eliminate the vintage collectable market to favor Chinese megasellers, and this fact will eventually prove to be the end of ebay. It was likely JD's idea to promote FB/Tw so ebay could datamine, and steal customers. It's sad that so many sellers fell for this 'social media' dead end trap.

Facebook/Twitter/Linkedin/Pinterest are guaranteed to kill the business of any importer, but vintage rare item sellers should be able to create a buzz within their social networks and sell outside of ebay if they have an established local customer base with many followers and use ebay only as a secondary marketing tool instead of a primary selling platform.

I don't waste much time on FB/T... unless I'm selling something that has a cult following and was made decades ago. Social media can be a great tool to eliminate ebay's commissions from vintage and collectable sales. Ebay has earned NO LOYALTY from online sellers.
Perminate Link for Taking the Air out of the Social Ecommerce Myth   Taking the Air out of the Social Ecommerce Myth
by: jilly This user has validated their user name.
       Web Site
Mon Sep 10 02:37:22 2012
Yay....!!! Thanks sooooo much Ina for posting this. I just knew it in my bones. So fabulous to have it confirmed...:)

I don't like the social sites at all, but one is almost forcibly ''steered'' towards them to stay in touch with friends and now, moreso, encouraging online traders to link with their websites etc.

I thought I was just being old fashioned & sceptical.

Yet another urban/internet myth busted....fantastic and thanks again.... Jilly
Perminate Link for Taking the Air out of the Social Ecommerce Myth   Taking the Air out of the Social Ecommerce Myth
This user has validated their user name. by: Spartacus
       
Mon Sep 10 02:38:05 2012
I'm with Rocky. Data is only data unless it is further refined to show what goods or services are being solicited via these social channels.

For my business, Twitter is king but then again, the type of people who buy my products are generally the type who are active Twitter users as opposed to the numbskulls found on Facebook or the lowest of all social sites, Pinterest.

Here's a hint, if your buyers are coming from Pinterest, you can count on a 50% higher problematic buyer ratio.

 
Perminate Link for Taking the Air out of the Social Ecommerce Myth   Taking the Air out of the Social Ecommerce Myth
by: Watching the Wheels This user has validated their user name.
       
Mon Sep 10 03:39:34 2012
I gave up on the social sites eons ago. They are a colossal waste of time.

These sites get pushed because their investor money also has interests in retail areas, which in turn are used to pump up the numbers for the social in the hopes of doing a killer IPO.

People should do some research. There are all sorts of inbreeding among Cyberland's elite. Nice little "good ol'boys network" going on that has little interest beyond siphoning profits for themselves.
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This user has validated their user name. by: Tula
       
Mon Sep 10 03:41:26 2012
I can see social commerce working for certain trendy or niche items, but I think the poor showing illustrated by the article is likely the typical result for most goods. I know my own sales numbers reflect similar results to the sample. It just goes to show that you have to experiment with it yourself and not just invest a lot of money or time in something that may not give you any return. There's no magic button that will instantly deliver sales, no matter what all the books, blogs, or "experts" tell you.
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by: Jacque This user has validated their user name.
       Web Site
Mon Sep 10 07:32:08 2012
Honestly I feel this social ecommerce is a MAJOR time suck - I have continued to focus on my site SEO and that's where I see results and sales.  
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by: Jacque This user has validated their user name.
       Web Site
Mon Sep 10 07:33:42 2012
And I've found having a product people actually want is another factor to selling.
Perminate Link for Taking the Air out of the Social Ecommerce Myth   Taking the Air out of the Social Ecommerce Myth
by: truehandmade This user has validated their user name.
       
Mon Sep 10 07:51:03 2012
Watching the Wheels added a crucial point about who's benefitting from the social media/retail myth.  Sellers should look at who's benefitting ka-ching from their countless hours of free labor and mktg for mkplc sites that give little to nothing in return.  They love your free labor, FB/T, Etsy & eBay are at the top of that list!
Perminate Link for Taking the Air out of the Social Ecommerce Myth   Taking the Air out of the Social Ecommerce Myth
This user has validated their user name. by: Nolle
       
Mon Sep 10 08:02:19 2012
I think a lot of sellers don't ''get it''.  You don't directly ''self-promote'' yourself on social media.  It's not like pay-per-click or a numbers thing. It's a word-of-mouth thing, it's a viral thing, it's all about referrals from users.

When someone goes to my website and pins one of my product pictures on Pinterest, and shows their friends, I get sales.  I don't do anything at all to ''promote it''.

It's all about the referral - and there is really nothing a seller can do about it.  If you sell the kind of unique stuff that allows social media users to ''discover'' you and spread-the-word, you benefit.  But it's nothing like conventional advertising.

In fact, one of my products was recently ''discovered'' and was picked up by a major fashion blogger.  Been having sales all week on this one item.

At least for me, that's how social media creates sales.
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