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.