New research shows that buzz plays a greater role than previously thought in getting consumers to buy and that the pool of the most effective influencers is largely untapped.
Over the past decade, marketers have increasingly turned to social-media networks like Facebook and Twitter to create buzz around their products. But what impact do tweets and other recommendations have on sales, and how can companies get a bigger return on their investments in these important channels?
To get a clearer view, we examined the purchase decisions of 20,000 European consumers, across 30 product areas and more than 100 brands, in 2013 and 2014. Respondents were asked how significantly social media influenced their decision journeys and about instances when they themselves recommended products.1 1.The research compiled social and demographic information, as well as data on social interactions on Facebook, Twitter, and other social networks. The data gathered cover a range of decision-journey touch points leading up to purchases, as well as social activities after purchase. We found that the impact of social media on buying decisions is greater than previously estimated and growing fast, but that its influence varies significantly across product categories. Moreover, only a small slice of social influencers are creating the buzz.
A growing importance
Social recommendations induced an average of 26 percent of purchases across all product categories, according to our data. That’s substantially higher than the 10 to 15 percent others have estimated.2 2.See Connected Marketing: The Viral, Buzz and Word of Mouth Revolution, edited by Justin Kirby and Paul Marsden, Oxford, UK: Butterworth-Heinemann, 2006. For the 30 product categories we studied, roughly two-thirds of the impact was direct; that is, recommendations played a critical role at the point of purchase. The remaining third was indirect: social media had an effect at earlier decision-journey touch points—for example, when a recommendation created initial awareness of a product or interactions with friends or other influencers helped consumers to compare product attributes or to evaluate higher-value features. We found that in 2014, consumers made 10 percent more purchases on the back of social-media recommendations than they had in 2013.
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