Friends with benefits or the untapped long tail of social influence
Thursday, July 23, 2015/
On many occasions I have continued to prompt, push and advocate that social media influence is not really “likes”, nor is it cute marketing campaigns to drive Facebook traffic.
The true commercial benefit of social media is the power of the recommendation.
This week a report on social media from McKinsey Europe confirms this and adds weight to previous research on this matter.
The main outcome of this research points to the long tail of social influence, which is largely untapped, and of which 50% relies on offline recommendation not online social media. This suggests that for all the social data being collected, it is not necessarily being used very effectively to find the nuances of influence.
In marketing we see ‘influencer programs’ that are not actually influencer programs. They outreach to bloggers in a bland way and do not reach the peer-to-peer influence of the social net. It does not rely on bloggers, but on ‘friends of friends’.
Key insights in building social media recommendations to consider are:
- Social recommendations induce an average of 26% of purchases across all product categories, up to 50% in some categories.
- Two thirds of the recommendation impact was directly at point of purchase, a critical collusion between online sales and online reviews
- It’s not just the search journey, but rather the comparison of different attributes of a product that peer-to-peer reviews influence. Also a first-time purchaser is 50% more likely to want to back up a find on search with a social media recommendation of some kind before they move further down the purchasing path.
- Travel, investment, over-the-counter pharmacy, all scored highly for social media consumer recommendations, with influence as high as 50% of a purchase decision
- Five per cent of people accounted for 45% of influence. I use 6%, because of all the content on YouTube, 6% of the membership create the vast majority of it. Most databases of most companies – 6% of the customers will truly be un-incentivized brand advocates.
- Positive comments outweigh negative one by three times the influence. But don’t forget if you respond well and fast to a negative comment on your business you can turn that round to your advantage.
Our marketing economy is now a peer-to-peer driven economy of recommendation. Less weight is placed on simple star endorsement, but more on comment.
It is a niche-driven long tail of community that drives the recommendation economy. It is not an obvious thing you can tap into, unless you are part of that niche community and understand its nuances. No wonder marketers are struggling.
A study by ShareThis and the Paley Center with Beresford Research was the first of its kind to apply scientific, statistical methodology to the problem of determining the actual monetary value of a social share.
This research is a crucial milestone for product marketers and publishers who no longer have to guess at the value of their social campaigns, and instead can use the evidence-based model and findings presented in this report.
“We are seeing a fundamental shift in consumer purchasing behaviour,” said Lisa Weinstein, President, Global Digital, Data and Analytics at Starcom MediaVest Group.
“The explosion of social content like recommendations is having a real impact in people’s day-to-day lives, including what we buy and how much we are willing to pay.
“While we’ve known intrinsically that online engagement is important, being able to quantify the monetary value of online recommendations and sharing, as these findings do, is incredibly important for brands.”
So shouldn’t we apply KPI and ROI to our social media marketing using industry data on recommendations impact on revenue and propensity to purchase?
Sharing and recommendations influence consumers’ buying decisions more than brand or price, so smart ROI should be measured on a series of metrics:
- Has a recommendation motivated your consumers to spend 9.5% more for a product or service?
- Have your ratings generated 6% additional value?
- Have your reviews generated 7% additional value?
- Have you tracked whether in-person recommendations generated 10.6% additional value?
- Professional reviews generate 10% additional value and intent to purchase – have your bloggers or PR commentators?
- An online share has a value of between 33 cents for a brand or store recommended by a stranger, and $1.33 for brands recommended by friends or family. Mobile devices account for twice as many shares as desktop – where does your social strategy fit in to this commercial modelling?
It is smart to measure and invest in social media recommendation, based on hitting some of these key targets.
The brands that start building sharing experiences and leveraging recommendations through mobile devices via chat applications could potentially tap into the long, lucrative and discreet tail of recommendation.
The passive ‘like’ or ‘heart’, isn’t the truth of the long tail of recommendation, where through our mobile devices and chat applications we genuinely share a recommendation or experience that will drive purchasing preference from consideration to point of purchase.
Fi Bendall is the managing director of Bendalls Group, a team of highly trained digital specialists, i-media subject matter experts and developers.
This article was originally published on SmartCompany.