Measuring the Impact of Facebook on Sales
There's been a lot of talk about Facebook's impact on commerce from industry pundits. “Will it be retail’s next Google?” asked one report from a leading analyst's firm. While we're still very much in the early stages of social media marketing, one thing is certain: In a world where people are increasingly turning to others for opinions and recommendations on the things they need, social commerce, specifically Facebook commerce (f-commerce), is something worthy of additional exploration. But before we jump into the numbers and opportunities, let’s examine what’s required to build a successful f-commerce effort.
First off, I’m a believer. (So much so that I recently joined the marketing advisory board of an f-commerce provider, Milyoni.) Some of the examples below, including Warner Brother’s experimentation with Facebook as an alternative digital distribution platform, are powered by Milyoni’s technology. Having said that, f-commerce doesn’t just happen.
I believe that all successful f-commerce programs start with creating engaging conversations and communities. Trust and advocacy flourish over time, allowing brands to develop programs that harness the power of the social graph. If done well, brands have the opportunity to build a commerce platform that not only stands on its own, but ultimately supports and amplifies existing marketing and sales efforts.
If you’ve spent time building your Facebook community and implementing channel tracking for promotions, you’ve probably already witnessed the growing influence social networks are having on your overall promotional efforts. For one of my clients, Facebook is now second to email in terms of rebate form completions and conversions. That's a testament to the power of building a highly engaged community and its impact on sales.
Now for the data. If you’re still a skeptic, consider the following:
Sales: A recent report from consulting firm Booz & Company titled Turning "Like" to "Buy" estimates social commerce sales will reach $5 billion worldwide this year, with $1 billion coming from the U.S. This is expected to grow sixfold to more than $30 billion worldwide ($15 billion in the U.S.) by 2015.