Social Media is UnSKUable

There is a dirty little secret that marketing industry insiders whisper about over beers and conference call lines: Social media barely drives direct ecommerce sales. It is something that puzzles and confuses us at a time where social dominates. But dig further and you will find that social media can sell, but the same old way of doing it doesn’t work.

Direct marketers earn their living and budgets because they can show how a paid media placement drives a conversion to sale within 24 to 48 hours after the impression or click is made. Unlike traditional brand marketers, who enjoy annual planning processes and quarterly campaign budgets, the “Direct Response” (DR) marketer is in the trenches moving money around daily.

Paid search and programmatic banners—powered by sophisticated bidding tools and conversion-tracking pixels—power this role by proving the cost/benefit. The DR marketer is often willing to try anything new—so long as it pays out every dollar spent within the first week of tests.


So Why Isn’t Social Selling?

But social media continues to perplex the DR marketing world. I’ve spoken with several search engine marketing companies and DR sellers that are perplexed by social. For the price of a beer to cry into, they will confide how grand hopes of social media expansion have been killed by anemic ROI. In the U.S., we spend 6 hours per day using social media, and 46% of people say their purchases are influenced by social media. But social drove only 1.8% of ecommerce sales during the 2015 holiday season.

How could this be? Do we just need more buy buttons on social posts? Nope. We’ve just been doing it wrong…

Our approach to new advertising platforms typically begins with a reapplication of the current historic models. The first TV ads featured radio-style announcers reading into the camera. The first banner ads were very much like print or outdoor creative. And social media continues to be thought of more like Search, in which a click to buy is expected to happen.

But we fail to adjust to the new medium and how consumers use it. While Search is a heads-down hunt, people use social as a lean-back, entertainment experience. Ironically, we should actually think of social more as an evolved form of TV or Print ads. We must lure their attention to something different, and place our ads based on relevance, interest and intent—just like placing makeup ads in a beauty magazine or kitchen appliance ads on HGTV.

Of course social allows us to personally target at a breakthrough level, and the new creative options can be incredibly engaging, entertaining and informative. In our experience as a social and content technology company that works with some of the biggest brands in the world, we have seen first-hand how a new approach to social can clearly drive sales at scale. Even generating that elusive click-to-buy.

It takes a fresh approach to seeing this success on social. And there are two initial steps that performance-focused marketers should start with on the journey:


Spark Ideas that Inspire Action

People use social in a way that is fundamentally different than a search engine or product catalog. Don’t believe me? Try posting your top selling product SKU on a white background and watch as almost no one clicks through. Post an incredible digital coupon or offer code and you’ll hear the same digital crickets.

To succeed on social you have to swim with the current of the platforms. The light, lean-back nature of social means you have to deploy creative that actually adds value to this consumer experience.

In case you haven’t noticed, Facebook, Instagram and Pinterest are being overrun with food content in recent months. That’s because we all decide what to eat at least three times a day and we enjoy variety. The social platforms have tweaked their algorithms to highlight food content because we enjoy it.

Smart marketers like Kraft (an Ahalogy client) are not using this “insight” to promote $0.50 off spaghetti sauce. Instead, they are posting relevant, timely, and oftentimes personalized recipes that meet this demand in a way that feels natural and authentic. A click to get the full recipe gives Kraft a chance to feature its products and even share promotional offers to help close the deal. Engaging ideas lead to sales.

Few companies, including our clients, want to give away the secret sauce of their results with this content marketing approach. However one piece of evidence comes from a group of Pinterest panel studies which proves that this kind of marketing approach drives 5x more in-store sales than the Oracle industry average for digital media.

For ecommerce businesses that sell individual products, one of the best tricks we’ve used is to organize SKUs into bigger ideas and collections. Again, you’ve got to think in terms of ideas and inspiration instead of pure product. Polyvore has been the leading company to package products into content in this way by allowing people to create, discover—and then buy—complete outfits.

We recently brought this approach to a new retail client, and it is already generating over $5 in ecommerce sales for every $1 spent in paid media—and that’s before what they expect will be a further boost to in-store sales.


Look Broader For Proof of Purchase

All too often we see direct response and ecommerce marketers limit their view of sales evidence to the last click, which must occur a day or two after the media is served. But they can be missing significant sales hiding in plain sight.

We recently worked with a home furnishings company on a 3-month Pinterest paid media campaign to promote its new lineup. By the end of the campaign, our clients were disappointed to find that sales were not matching what they usually saw in Search marketing.

But a funny thing happened when we updated them 4 weeks later—a huge burst in sales from the promoted products after the campaign was completed, and what was now a very positive ROI. Sales from those promoted pins continued over the “dark” months to come. No wonder Pinterest is a top investment priority for the company today.

When you are creating and promoting content that helps people plan a future purchase, it takes a different model to measure results. In this case, furniture buyers need time to plan a room and like to consider the options over weeks or months. The paid media campaign led to a lot of re-pins that buyers went back to later when they got to a decision. This is happening on Instagram, too, where research from the platform shows that only 21% product purchases happened within the first 24 hours of engaging with product posts.

In addition to looking at longer payout periods, we’ve got to make sure we are measuring the lift that happens in-store. Clicks-and-mortar stores too often separate their retail and e-tail spend and measurement, but new tools from hot startups and huge players like Visa are finally tying the two together for one complete view of ROI.

Simply put, social sells—but it takes a different approach in creative and measurement. If you and your organization don’t make the changes needed to get there, someone else in your category most definitely will.

If you would like to learn more about how we’re helping retailers sell on social, please request a meeting and my team and I will set up some time to chat.