sales

Forrester say social media ‘barely negligible’ as sales lead

Forrester’s ‘Purchase Path Of Online Buyers’ report (which tracked 77,000 purchases to identify the most fruitful sources of sales) found that only 1% of sales came from links placed in social media.

The value in social media is more in its slow burn effect, the report’s author, senior analyst Sucharita Mulpuru, says.

Social media and other ‘top-of-the-funnel’ methods, such as display advertising, are more likely to play a role in the influence chain when it involves multiple touchpoints, which Forrester estimates occurs for 33% of transactions from new customers and 48% of the time for repeat customers.

As a direct source of sales, web marketing mainstays of search and email continue to be the most fruitful despite changes to the interactive marketing landscape and the growing number of shoppers, the report says.

For new customers, the most common single source of sales were direct visits at 20%, organic search at 16% and paid search at 11%. For repeat customers, direct visits at 20%, email at 13% and organic search at 6% brought in the most sales in a single touchpoint interaction. In multiple touchpoint transactions, they remained the most influential with the addition of display ads.

Mulpuru recommends perfecting email marketing techniques, a continual focus on search engine marketing, caution in overestimating the impact of social media and actively promoting simple URLs across a range of channels in order to play to today’s online influence model.

via Forrester: Social media ‘barely negligible’ sales lead | Marketing magazine.

Online advertising’s effect on purchase intent and sales

Millward Brown have been in the business of measuring changes in brand metrics from exposure to online advertising for quite a few years. They emphasise that marketers should be measuring (brand) online advertising not by the humble click through rate, but by a change in brand metrics.

Clicks & Purchase Intent

This isn’t a new argument and one that I do agree with.

Purchase Intent is a metric that I use on a daily basis when working on digital strategy and planning for FMCG (CPG) brands. However, how many of those people that said they intended to purchase went on to actually do so?

50-70% of people follow through on their purchase intent after seeing online advertising.

Millward Brown Purchase Intent Online Advertising
I was pretty pleased that I found this stat, it’s one that I’d looking for for years! This informs and supports my estimates in ROI models.

However, my joy was short lived. Millward Brown go on to say that over the last three years, 39% of online advertising has in fact had a negative effect on purchase intent:
Clicks don't equal purchase intent

This is pretty bad! 39% of online advertising isn’t having little or no effect….it’s having a NEGATIVE effect!  We, as an industry, need to change that. We need to start producing better ads. Helpfully, Millward Brown give some tips for doing this:

Golden rules for online advertising

Oh, and consider using video ads…

Video ads and purchase intent

Full Slideshare from Millward Brown.