Social media has traditionally been a difficult channel with which to attribute conversions and measure ROIs. However, recent studies have shed new light on the way consumers are being influenced by social media channels within consumer decision journeys. Is it time brands took a closer look at how they could be using social media to raise awareness and drive conversions?
YouTube is the most powerful platform for advertisers in terms of influence in both first and last touch conversions of consumer purchase funnels, according to a new study of social media advertising released by AOL Platforms.
The study analyzed 500 million clicks, 15 million conversions, and 3 billion impressions gathered during Q1 2014. This covered more than $1 billion of attributed revenue across Convertro clients, and forms one of the most comprehensive studies of how paid and organic advertising on social networks influences sales in recent times. Convertro used powerful algorithms based on machine learning to produce an accurate analysis of more than 13 million unique purchase paths and the touch points.
How Social Channels Drive Conversions
YouTube was the strongest of all the major social networks at both introducing new products, figuring at 18 percent of all conversions on the channel, as well as driving conversions, with last-touch attributions totaling 14 percent, according to the study. A considerable 14 percent also used YouTube as the only channel before converting.
Facebook came in a close second, with figures of 14 percent at introducing new products, and 11 percent at closing sales. Ten percent of converting customers did so without interacting with any other channels or sources, and the remaining 69 percent were influenced by Facebook in the middle of their purchase journeys.
Slightly behind YouTube and Facebook in first and last touch conversions was Google+. Of all of the conversions influenced by Google+ interactions, 7 percent were first-touchpoint introductions to new products, and 10 percent could be attributed to last-touch attributions. A further 7 percent converted with users interacting solely with Google+, and the remaining 76 percent were influenced by interactions on the channel in the middle of the funnel.
In sharp contrast to YouTube, Twitter measured just 1 percent as the first touchpoint in consumers purchase funnels, and just 4 percent in last touch conversions, but measured a massive 92 percent in middle of the path, emphasizing the value of social media recommendations and influence as consumers are considering and evaluating their purchases.
How Social Media Compares To Other Marketing Channels
The report also provided some interesting data on how social media compares to other established marketing channels.
As the diagram above illustrates, social media is much more likely than any other marketing channel to serve as a middle-of-the-funnel touchpoint in consumer purchase journeys, with 87 percent of interactions taking place in this phase, indicating the channel is most effective in building customer awareness and consideration of a product.
In terms of conversions, social media (both paid and organic) is equal to or just below other marketing channels with the overall rate of conversion measuring at 2.49 percent.
Paid & Organic Traffic On Social Media
Convertro further looked at how paid and organic traffic broke down on Twitter, Pinterest, and Facebook. On all three platforms, the data highlighted an interesting trend. On all three channels paid social advertising encouraged far more new customer acquisitions, appearing many times as “first” or “only” touchpoints, while organic social advertising functions much more often as a middle-of-the-funnel touch point.
Social Media Performance By Vertical
Unsuprisingly, not all verticals experience the same performance on social media. Convertro analyzed several verticals across social media channels:
As the chart above shows, subscription services and health and beauty products experience a strong level of first, last, and unique (“only”) conversions via social media channels.
Convertro also mentioned in the report that “paid social media also tended to be a strong channel for introducing those products to new audiences, and it played a strong part at the end of the consumer’s path to purchase, driving the eventual sale.”
Top 5 Takeaways For Brands
Convertro’s report shows the growing influence of social media channels in informing and driving consumer purchase decisions. The study highlights five key takeaways for brands to optimize their social media advertising.
1. Social Media Works For Your Brand
The data affirms the value of social media as a crucial channel in middle-of-the-funnel stages of consumer purchase cycles, but especially in the case of YouTube, and to a lesser extent Facebook and Google+, provides evidence that users are also being influenced in the way of first and last touch conversions.
2. Make Paid Social Work For You
Convertro’s analysis provides compelling evidence to suggest that paid social is a much more effective upper and lower funnel solution than investing in the channel organically.
In fact, as the graphic above shows, marketers investing in paid social can expect to see a 25 percent lift in the number of sales, compared to that generated by organic, non-paid marketing activity.
3. Social Networks Are Unique; Paid Advertising Performance Can Differ
The way social networks shape up in the ways they influence the purchase funnel is unique to each network. YouTube has a strong degree of influence in comparison to others in first and last touch conversions, although Facebook and Google+ also perform well. Furthermore, the role of paid and organic investment on various networks can also differ.
4. Consider How Social Fits Your Vertical
Social performance varies across verticals, as well as by channel and product category. Convertro’s findings suggest that social media performs better for consumer-orientated retailers that can leverage powerful visuals and impulse buying, with subscription-based services and health and beauty products benefitting the most from social media advertising.
5. Measure Social Media With Multi-Touch Attribution
The report provides compelling reason for brands to leverage the powerful insights provided by multi-touch attribution to optimize their advertising activities and budgets on social media.
You can download AOL Platforms’ and Convertro’s full report free of charge here.
Are you using social media successfully to engage consumers on the purchase funnel? Could brands be doing more to optimize social media advertising and conversions? Share your thoughts in the comments.