Social Commerce is dwarfed by E-commerce from Search

Contribution by media to e-commerce

This post was provoked by the new white paper I got in my inbox from SimilarWeb.  Very interesting statistics. Statistics so compelling they had to be debated with the marketing  community. However these statistics are representative of the US and  European Markets. I would like the practicing Indian professionals to share their experience with Indian Social commerce and Search E commerce. It would be interesting to see if there are any changes to the trend reported in this paper.

Clearly the only traffic acquisition vehicle that can upstage search for E-commerce companies is Social Media. Now lets take a look at the state of  Social E-commerce through this report and see what learnings we have for India ? I quote from this report

It’s no big surprise that on a global level Facebook is the dominant player .controlling almost 70% of the social referral traffic to E-commerce sites What is a surprise is #2 on the list, Pinterest. Pinterest is helping online shops .find customers by giving them a hugely visible space to show off their products

To me there is no surprise  that Pinterest is coming in at # 2 .Its the fastest growing network ,and quickly rewards those who have nurtured it ,like Facebook must have done in the early days.Its likely to go commercial in the US in a few weeks and who knows what impact that may bring on referrals. Negative most likely!

Social Commerce Throttles on Facebook, Declining Organic Reach

The competition to get seen on a fan’s Facebook News Feed is higher than ever. At any given point a user logs into the Facebook platform, there are more than 1,500 posts that user could be shown. So  you can go Blue in the Face creating likes and engagement but you will not be rewarded with free organic traffic .Yes your Post may get free Organic Lift and Viral Shares, but only if you Pay to Boost it. The only ones who get it for free are Celebrities and  Magazines with a verified blue tag .  I have done the A/B Testing . Did Quality Posting with an engagement level of 8% plus on posts with Paid Advertising* .The Reach was  100 x  vs The Same number of Posts and quality without Paid Advertising or Boost as they would like to call it .They have your Fan and Business Page on a Perpetual Pay me motion treadmill that you cannot get off. I would like to share a comment on the  Facebook Business Pages that sums up the frustration perfectly

So, let me get this straight: we promote our pages in order to get more fans. And, in order to promote our pages, we pay for Facebook. Ok, after we pay for this, we need to pay again to REACH those fans. Is that only me, or is something wrong with that? https://www.facebook.com/alexander.almeida.9619

That’s the reason E commerce has not taken off in my opinion .Why should I invest in acquiring traffic from Facebook if I cannot harvest it with organic and direct traffic ? The single biggest source of E-commerce after Search is Direct Traffic. When I advertise in search I benefit with both organic traffic and returning direct traffic visits .

* facebook advertising referred to in this post is related to the content you can promote on your Facebook  Fan Page .It does not include direct banner or display advertising and relates to promotion of instream news content from your facebook fan page to you fans

Social Commerce – Celebrity and Artist vs Business User

Will the Facebook Algorithm Throttle E-commerce for Businesses ?

I have seen Salman change his T-Shirt and Bhai he gets 1.6 Million Likes .Which Implies that he must have got 20 Million Views . Not surprising he has a fanbase of 25 Million .coke-1200x500This means that Facebook does not throttle his Post ? Yet for all  Business Pages  their Posts are throttled .Take the case of Coke it has a Fanbase of 90 Million and a typical post will get  less than 500 likes .This is not even a commercial Post. Assuming a 3% like rate. This Post would have got 16,000 Views in a 90 Million Fanbase.

 

Is it Logical for Facebook to be under weighting Businesses  and promoting Celebrities at the cost of a Business ?

salman_blog-1024x734Celebs and SMB’s are businesses . Salman is Promoting Being Human & his movies. The Kardashians their Fashion line and so on. Coke and Small Businesses are supposed to pay!. Without this algorithmic celebrity bias, It’s impossible for Kim Kardashian to have broken her underwear, much less the Internet  for Free ! Now this is the most ridiculous media bias I have ever seen. Besides talk shows and guest appearances no celebrity gets free Media mileage .It’s also capped by the Reach of the show in which the celeb made an appearance. Networks like Facebook are losing millions by allowing these celebs to build brands. In any case they do not have a shortage of content. They are throttling our news feeds. Why throttle the news of a Closed network and open up an impersonal network. It has already hurt Facebook E commerce referrals .It’s no where close to the size of its audience base  They have reach parity with Google Ad Words Search and give 1/10  of the referrals .The celebs can afford to pay as much as a Business. Throttle equitably. Google Ad Words is Democratic it gives you organic and paid referrals . Facebook Native In Stream Advertising programme has great Potential but is fundamentally flawed in execution

Now think of Myntra  the Great Indian Mobile App only Fashion Website (funny mobile only, no website) they are breaking the Bank in Print and TV announcing the Grand Sunday Sale . Do they get any Viral impact from their Facebook Fanbase?  Will they Ever ? Think about  Coke could have with a 90 Million fanbase. You think they can ever reach out to this Base to announce an offer or launch without paying ? .The facebook Algorithm needs serious tweaking if they are ever going to get Mass adoption like Google Ad Words. Why is Myntra moving away to Traditional Media ? Are the unit economics better after all the wastage on the non Internet enabled users ?  It’s amazing to see a media that is 10X more’;/ expensive than internet media acquire budgets for a Sales Promotion Activity (yes not Brand Building) aimed at internet enabled 100 Million E e-commerce users.  The E-commerce referrals by Traditional Media vs Digital is a topic of discussion by itself and will be an interesting next edition once I have some facts to throw around.

Social Media will not make a dent in E- commerce search traffic

Bottom line Even though  Facebook Social Media Reach is as Big as Google ,it’s not going to make a dent in E-commerce .Its designed to milk the SMB businesses . The business owner is also expected to turn into a content and engagement expert .Without this he has to pay more and more for all his posts. The sad fact is that he has to now hire a content and social media expert too. To succeed on Social Media all Businesses have to become mini media houses   with multimedia and multi screen content competencies.

Social Commerce  ROI Optimization is engagement driven and not Scaleable

You are as good as your content person and strategy . His Productivity can be enhanced with several tools .But still the work is very physical.and yes popular art and not science. I wonder if there are any programmatic buying tools  to Boost your content posts. The intelligence to grasp the engagement analytics  and create reside in two different parts of the brain and unfortunately individuals .It’s not scaleable. Its Art.

Social Commerce will work for Businesses with a Social Connect or where the unit economics &  Ad ROI work

Lets take a  look  at Facebook unit economics. Currently I have seen it tries to preserve a Facebook Paid post CPM of $ 1. At 1% you are Paying Rs 6/- per Click and 3% Rs 2/- Per Click.  This will work  for you if you have to compete for very popular keywords on  Google Adwords .If  your conversion ROI is within your CAC (cost of acquisition) you have a home run. You can continue to run paid ads forever. In the Paid Search markets genuine Niche and Vertical business may get crowded out by the Large Big Daddy Marketplaces that place high bids for everything.  This will naturally reduce you click flow and sales You may like to then shift your attention to Facebook. That’s what happened to  Teespring in the US. It’s a model begging to be replicated in India .

Social Commerce is thriving for Teespring and its Minting Millionaires .Teespring is a crowdsourcing T-Shirt selling company

teespring-1200x500

 

Teesprings is making millionaires through Social Commerce

Linkedin contributes the least to E-Commerce Traffic Referral from Social Media

 

LinkedIn lets face it needs a full overhaul. Its user architecture is archaic and clumsy .Its mobile interface and app pathetic . Living by brute force of Job Seekers . It promotes Editorial Content and Influencers at the cost of its Vibrant Professional community ,who love to network in their Peer Group,but are loath to Promote. Even Promotion costs are exorbitant . So what do we have pathetic E-commerce referrals even though they have an audience base an Advertiser will salivate and kill for. Like Facebook Celebrity Linkedin has an influencer Caste System that prevents 98% of Linkedin users make any impact with their updates and posts . How will Linkedin go beyond its subscription income if it does not do anything for the 98% .Over the years I have built a 4000 plus following on Linkedin .When it comes to a post I get a predictable 100 to 400 views ?  and for updates a predictable zero. Why if my followers like my posts ,why does it need editorial or programmatic intervention .I should be motivated to reach my base and advertise to go beyond .Till Linkedin does something about throttling posts and updates its gong to be very far from participating in the E- commerce market. It wastes a lot of time flashing Job changes ,anniversaries and profile updates. But these have no commercial impact. It needs to work out a Balance.The  ways to Keep in Touch is a nice Feature and a another feature like your friend just posted  could be a way out ?

Pinterest rules Social Commerce

Extract straight from the report

Pinterest is commonly considered to be the social network that brings in the most online sales. A study by Javelin Strategy & Research found that Pinterest is 126% more successful at driving e-commerce sales than Facebook, since Pinterest users’ average order value is $123.50, while Facebook users’ average %order value is $54.64. Not bad for a platform with traffic out of the top five major social ad networks…. SimilarWeb PRO shows that 13% of all outgoing traffic from Pinterest leads to shopping websites such as Etsy and Amazon. That’s 13 million referrals

All the Social Gurus have followed Facebook for commerce ,when the low hanging fruits are on sites Like Pinterest and Linkedin .See my article Linkedin is not for Job Posting

It would be interesting to hear experiences of Indian E commerce referrals. But given the fact that Etsy gets so many referrals anything artisan should bloom on the Indian Pages too of Pinterest

In conclusion unless Social Network Majors like Facebook tweak their algorithms to reward natural organic reach and let everyone compete on merit , Celebrities to Prime Minister, it’s unlikely it will ever catch up with Search Salience to E-commerce referrals

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