July 03, 2013

Social Media Gets An Ass-Whooping From Google, Email

Over four years ago, in a post entitled Looking For Volunteers, I wrote the following...
"TAC predicts that when the frenzy over Facebook, Twitter, and other social media calms down and the dust clears, email and search will continue to be the dreariest and most productive forms of online advertising."
In an article on Monday  entitled "Email Is Crushing Twitter, Facebook for Selling Stuff Online" Wired had this to say:
"An endless stream...of advice from marketing consultants warns businesses that they need to “get” social... Despite the hype... it’s relatively antique tech that appears to be far more important for selling stuff online.
Wired's source for this article was a company called Custora that studied "72 million customers shopping on 86 different retailer sites." Their conclusion: search and email are far more effective at generating sales results than Facebook, Twitter and banner ads.

This chart summarizes their findings:

Here's a little recap of what Wired reported:
  • "Over the past four years, online retailers have quadrupled the rate of customers acquired through email"
  • "Facebook over that same period barely registers as a way to make a sale, and the tiny percentage of people who do connect and buy over Facebook has stayed flat."
  • "By far the most popular way to get customers was “organic search,” according to the report, followed by “cost per click” ads (in both cases, read: Google)"
  • "Email customers were nearly 11 percent more valuable than average. Facebook customers were just about average. Twitter customers, meanwhile, were 23 percent less valuable than average during the two years following that first click."
  • "Custora found that Google’s ads... lead not only to clicks but to purchases"
Now, of course, this shouldn't surprise any of the brilliant readers of The Ad Contrarian. We explained why Google was so effective and Facebook was such a whack-off in this post almost two years ago.

Social media may very well be the most over-hyped of all the online advertising miracles. Which is like being the deadest guy in the graveyard.


ghensel said...

Well, you are obviously smart enough that there are many versions or identities of this thing called social media. Me responding to your post is one of them. Brand being able to engage customers and get their permission to contact them is another. Nobody ever said that Facebook is good for selling cars directly. But a lot of people can prove that social media is one important element in the mix.

DenTarthurdent said...

This "proof" would be what? And how do you measure "importance"? As a business owner, the only proof that matters to me is sales - sales are the only important metric - Google gets people to my website, a decent number of those people buy (not as many as I'd like but, hey, nothing's perfect). I get fewer than 5 clicks a month from Twitter and not even that from FB, despite all the bots that "liked" my page. The only place where you may be right is Google+, which appears to improve my organic search ranking on Google, thus leading to more of the above. Hardly a direct consequence of social interaction, though.

ghensel said...

The are dozens of studies that prove that social media is indeed pretty valuable as a brand's long-term tool. I agree - it is almost worthless when it comes to generating short term sales (except maybe twitter and Pinterest in specific areas).

How do you measure importance? There are many ways to do so: I don't want to go into detail here. But obviously there are marketing goals beyond "let me sell cars now". And yes, you can measure how social media contributes to being successful here.

BB Hainsworth said...

More marketing goals beyond "let me sell cars now".
Dan as a car dealer, The only thing I am interested in, is selling my cars now! They are far to expensive to be sitting on my lot, while your ad agency decides social media is valuable as a brand's long term tool. Car buyers don't buy cars from me because I have the best advertising or best social media strategy. My customers buy cars because they need one. Building a brand long term doesn't keep my bank happy. Selling cars NOW does.

ghensel said...

Jesus, what kind of thread is that? I may personally like Pizza. Others may not. That does not mean Pizza is generally bad. See my point?

ghensel said...

By the way: this is one of the most tactical and short-term focused marketing approaches I have read about in years.

Cecil B DeMille said...

The trouble with social media is that, for it to work well, you have to have something to say. Often. Most brands simply do not. When they do have something worth saying, they say it in an ad. To use the car dealership analogy, would anyone follow a car dealership on – for instance – Twitter? Show of hands?

If you want to sell cars as a car dealership, your brand is going to be built by word of mouth and the quality of the cars you sell, and with dealer marketing from the manufacturer (if any). The best Twitter post you can hope for is one from a customer that gives you a shout out to all his/her friends. All two of them.

The flip side is that social media can be extremely cheap, and doesn't require the investment in list after list of email or physical addresses. You get what you pay for, there. In the above case, it's search all the way. Anyone recommending Twitter better have one Hell of a great idea to make it work – something to say that people want to hear.

Speake said...

Slighty OT, but some facebook likes cost the lives of an ambassador, three soldiers and $630,000. State dept had $$ for Likes but nothing for security. http://washingtonexaminer.com/state-department-bureau-spent-630000-on-facebook-likes/article/2532629

Phil said...

"By far the most popular way to get customers was “organic search"

Fact of the matter is companies, regardless of size or industry, can't ignore social media and need to start thinking long term. We've known for quite some time now that social indicators impact SEO. Are you actively engaging your followers, are they sharing/retweeting/liking/commenting?. What about review sites? What are you past customers saying about you that could positively or negatively influence someone else's decision to buy from you. Are you actively monitoring and responding accordingly? Do a search for "car dealership + city" and look at the reviews under, those are just another indicator that a search engine will use to rank a site. Are you actively encouraging users to write a review? An active social presence has become indispensable to SEO and IMO in the coming years search engines will only continue to give it more weight.

As a car dealership for example I can understand how your main goal is to drive as many qualified leads to your site as possible and that paid search advertisement is the easiest and quickest way to do so but it comes at a cost and ultimately you're constantly working to keep your CPA or CPL at a profitable level. All the while more and more competitors spring up and start buying up the same keywords and driving up the price.

A successful web marketing campaign should incorporate all of the different mediums and make them work together.

TCWriter said...

Some of us never abandoned email (especially for and mid-sized businesses), but I hereby lodge my protest at the use of the word "dreariest."

Some of our client email work has been fun and productive.

What remains a mystery is why my clients continue to invest heavily in social media while email remains the red-headed stepchild. Among at least a couple of my clients I'm acquiring "Hey, you kids get offa my lawn" oldguy status for insisting marketing resources balance out with returns.

Content marketing via social media channels does have the benefit of returning Google juice to an online presence, but it turns out -- and you might appreciate the irony -- it takes a pretty good writer to generate that content.

Turns out there aren't that many good writers (just as there aren't that many ad creatives who can craft a great ad).

Shanghai61 said...

How hard is it to understand?

The world of advertising has always been divided into two kinds: ads that come looking for you (display) and ads that you go looking for (classified).

Display is what builds awareness and familiarity with brands over time and creates 'saleability'.

Classified is where people go to look when they're ready to buy; to buy a car, a holiday, a tax accountant, whatever it is they've decided they need right now. And usually what they're looking for is who has the best deals.

What drives their mental shortlist of brands at this point is as much the long-term memory of the alternative brands that was created by display advertising, as it is the attractiveness of the short-term offers. A great offer on a product you've never heard of , or don't like much, isn't going to cut it. (In other words, there is no short-term sales success without some sort of long-term brand effort).

Newspapers are full of ads by car makers talking about this year's great new model, and car dealers talking about this week's great new deal. There's a logic to that. Car makers want everyone who might be interested to know about their car. They realise not everyone is going to buy this weekend, but the dealers are talking directly to those who are.

'Search' is the obvious digital parallel to the older forms of classified advertising - press, catalogs and directories.

Display is still about effective reach and creative engagement in an 'unsought' or 'interruptive' media environment, and so it's still heavily reliant on traditional channels like TV, press, magazines, etc.

But where exactly does 'social' fit? Is it 'display' or 'classified'? Or something else? The results to date suggest nobody has figured it out.

So until someone can explain which of the two roles it best fullfils, or invent a credible third role for how advertising works, I will have no trouble sticking to the two that do.

BB Hainsworth said...

"There are dozen of studies"? Please link them to this thread. Social media is engagement one day, content another, data another etc etc etc. Dan, Lets agree to disagree on this one.

Gerald Hensel said...

This is just one of them http://de.slideshare.net/Syncapse/syncapse-value-of-a-fan-2013-summary-of-findings

Graham Strong said...

Hear hear!

I took TAC to mean "dreary" in the sense of "not over-hyped; the workhorse" of marketing rather than as a description of the work itself. But I agree with you 100% that direct email and Google Adwords and/or landing pages writing is far from dreary. (As the father of two red-headed children though, I hereby lodge my protest to your metaphor... lol)

Whenever people want to build up their Facebook likes or even Twitter followers, I always tell them the best results will come from building your email list. (Actually, Twitter's not too bad, but you've got to be committed and engaged for it to work effectively.)

You'll get fewer email signups, but they'll be more qualified -- anyone can click a "Like" button, but to commit to giving up your email address, that shows more potential for becoming a customer.


Jim said...

There is some brilliant BS in there. "The coca cola brand is so strong non-Fans appreciate and use it." Err okay, did you not know that some people use product even though they aren't on that brands facebook, hang on - most of the world behave like that, weird aye

"Create new moments of social brand truth", whatever you say, I am on it.

And some sense - people tend to like a brand and use it before they became a fan and the main reason to be a fan to get a coupon or discount.

Gerald Hensel said...

I am sure social media is just a fad and people following brands just do that for the purpose of getting coupons.

Gerald Hensel said...

What a comparison

Matt Sharper said...