What’s the Value of a Facebook Share? $2.10
Michael Lazerow, entrepreneur and founder of Buddy Media, gave an insightful talk at Internet Week about social commerce. He compared the evolution of e-commerce to Maslow’s Hierarchy of Needs Theory where e-commerce 1.0 was utilitarian and met the physiological and safety needs of a consumer. E-commerce is evolving into social commerce and moving up the hierarchy. Now people‘s needs for love and to belong get met by sharing their purchases with friends providing feedback, and this will play an even bigger role going forward.
The three main ideas that Lazerow espoused for putting this evolution into practice are:
1. Social commerce is more about commerce than social: drive people to buy on your site.
This is about making money now, and right now people are not spending on Facebook. According to a recent Forrester study only 3% of Facebook users purchased on Facebook in the past month. Don’t spend millions of dollars porting a store over to appease that 3%. There are no big success stories yet. Conversely, look at Groupon, which uses the viral functionality of Facebook but drives that traffic back to their site. Their success speaks for itself.
Takeaway: Put share functionality on your existing e-commerce experience.
2. Your smaller, most vocal customers are your most profitable customers because of sharing.
It pays to engage with your vocal active customers, not because you need them to buy more, but because of the Facebook shares they provide. The data of how a share can affect revenue is some of the most valuable data in social media right now, and only a few are starting to figure out how to quantify it. That’s why Buddy Media acquired Spinback because they were so impressed by how they tracked Facebook shares and put a dollar value on those shares.
Takeaway: Community management is important and directly affects revenue
3. Silos are killing social commerce; we have paid, owned and earned media
The traditional model of viewing campaigns from the paid media, owned media and earned media perspective is outdated. Brands and agencies need to answer the question, “How do we use paid and earned media to have connections share?” This leads to a new paradigm for planning where the goal is getting the right person to the tab, and optimizing that tab and corresponding media. For example, if women 25-35 in Boston are converting and sharing the most, drive more media to that segment to maximize ROI.
Takeaway: Plan media dollar and creative iteration into your campaign plans.
Lastly he reported on stats gathered from Spinback, which is a closed loop system that tracks clicks, shares and purchases. As an aggregate across their client:
- A share generates $2.10 in revenue
- 12:15 – 1:45pm is the best time for sharing and driving the highest conversion
- Wednesday is the best day for conversion
- While Twitter drives significantly more traffic than Facebook, resulting in 10% conversion, Facebook gets 87% conversion
These are still early days in social commerce, but these insights are bankable now.
By Ben Stein, via Porter Novelli Global Blog