By Adam Fraser
A long time challenge for social media – and in fact for marketing more generally – has been accurate attribution.
The final click before you bought came via a Google search – hence let’s credit SEO with the sale. Nice and clean.
But the buyer’s journey is rarely that straightforward. That radio ad you heard a week ago, the billboard you saw yesterday, the newsletter you got last month. Oh and the various word of mouth recommendations and information you got via social media. To what extent did these other touch points contribute to the sale?
Paradoxically in a data saturated world, attribution (where the traditional AIDA marketing funnel seems less and less relevant) gets harder and harder.
In this context a report from the strategy consultants McKinsey released this week, provided some excellent data points on the importance of social in driving actual commerce. McKinsey surveyed 20,000 customers in the EU across 30 product categories and 100 brands on their buying habits and drivers during 2013 and 2014.
Some of the headline findings were:
- 26% of all purchases were driven by a social recommendation
- In some cases (2/3 of product categories) the impact was direct (i.e at point of purchase) and in other cases (1/3 of product categories) the impact was indirect (at an earlier decision point in the journey)
- The importance of social is growing: in 2014 buyers made 10% more purchases based on social media recommendations than in 2013
- There is a strong divergence between product categories: for example, only 15% used social when purchasing utilities versus 40-50% for travel and investment services
- Timing matters: a first time buyer is 50% more likely to turn to social media than a repeat buyer
- Traditional word of mouth still matters – of the brands studied, half of recommendations were made either in person or over the phone
- Power influencers matter: a small number of influencers account for a disproportionate amount of influence (10% of influencers impact 24% of recommendations)
- While SEO marketing tends to compliment social media activity, TV advertising largely competes with or substitutes for social media research
Some important inferences can be drawn from this study:
- Social touches various stages of the buyer journey – from top of funnel initial awareness all the way through to purchase (and unquestionably – whilst not covered in this research – through to retention)
- One size does not fit all for social media strategies: different industries will exhibit widely different consumer behaviours
- Paid, owned and earned media approaches can work synergistically in driving an effective social media strategy
- Word of mouth in the non-digital world is still a key driver
- Social’s impact and importance is growing
A very useful piece of research from McKinsey and a reminder to all of us to not over simplify the attribution equation.