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I keep hearing these social media claims, but no hard proof.

tomhudson (43916) writes | more than 2 years ago

Facebook 2

We've all encountered those "web designers" who claim that you need facebook, twitter, whatever "social media web integration". And yet, we all know that you can buy facebook fans for as low as 500 for a buck, that you can buy twitter followers, you can buy google+ friends, you can buy web traffic to give any site a temporary artificial boost and make it look like the social media gimmick is working its magic ...

But where are the hard statistics?

We've all encountered those "web designers" who claim that you need facebook, twitter, whatever "social media web integration". And yet, we all know that you can buy facebook fans for as low as 500 for a buck, that you can buy twitter followers, you can buy google+ friends, you can buy web traffic to give any site a temporary artificial boost and make it look like the social media gimmick is working its magic ...

But where are the hard statistics?

Where are the studies that show that spending $X on "social media" gives a ROI of $Y?

And is the ROI better than if you had just spent the same budget on beer for the office party and returned the empties for the refund? It seems to me that, rather than being a way to add value, it's just something that will turn into an unproductive time sink - just like social media in general. Coincidence? I think not.

Does anyone have hard figures - not anecdotal "evidence" - to the contrary?

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2 comments

Google is trying to find out. HARD. (0)

Anonymous Coward | more than 2 years ago | (#39373673)

The answer to this question is the Holy Grail to Google.

Google wants to be able to say "advertise with us, and use us for your intelligence work. Our keyword ads combined with our competitive shopping price list are guaranteed to increase sales by X%". I could look at their rates, look at my sales, say "I want a piece of that", and happily give Google half of my bank account if it means doubling my sales over six months.

Google knows. They know what people search for. They know what advertisements people click on. They know if you searched for "LCD TV", and that you followed their link to amazon, then went to epinons, back to amazon, then to newegg, bestbuy, slashdot, bestbuy, newegg, twitter, facebook, newegg, slashdot, walmart, and 4chan. That's what google-analytics.js on every web page gives them. And if a site uses Google custom search, they can see that you searched slashdot for LCD TVs, too.

But Google doesn't yet have the most important information. They don't know if you bought a TV. And they don't know who you bought it from. They can't deliver that "increased sales by X%" figure because they don't know if bestbuy, newegg, walmart, or amazon closed the sale. They don't know if you got in your car and drove to Fry's and bought one. And they don't know what you paid for it.

Introducing Google Wallet. If you use Google Wallet, the merchant is telling Google who you are, what you bought, and what you paid for it. They now know have another data point that says people who search for LCD TVs and browse the sites of bestbuy, walmart, and newegg end often up at Fry's brick-and-mortar stores unless the price is 5% cheaper online, or if it's 10% cheaper with UPS ground shipping, or 20% cheaper but with expensive next day shipping. Now they can tell you just how effective their ads are, and how effective their search engine placement is. They could tell you that 32% of people check with followers on facebook before buying TVs in the $400-$800 range. And they can tell you that for a price.

And that's why Google is trying to give away free NFC readers to select large retailers, and investing so heavily into Android. They want their meatbags (uhh, google pluslings?) to freely donate their purchase info.

But shoppers are awash in apathy. One retailer I heard from that installed a Google Wallet reader reported that she had six customers use it last year. Not six per day, six for the whole year. Cell phones are awfully clunky and slow when compared to a mag stripe card. You have to fish the phone out from your purse, enter in your unlock code, launch the Google Wallet app, enter your PIN to authorize the sale, and then tap the phone on the reader, all in about twenty seconds. Or you can swipe your credit card in slightly less than two seconds, and Google will still not know if their ads were effective. A mobile wallet works for some certain kinds of purchases like coffee, where you're standing in line for a minute bleating with your smartphone anyway while you await the barista, but it has not caught on for general merchandise.

Re:Google is trying to find out. HARD. (1)

tomhudson (43916) | more than 2 years ago | (#39379389)

Thanks for the feedback. The only "case studies" I found were limited to really small potatoes - like "every $ spent generated $5 of revenue" - but the totals were risible - something that didn't justify the time, even at a fraction of the minimum wage (not to mention that revenue != profit. If your profit margin was < 20%, you were losing money - and even at 20%, what's the point of changing 4 quarters for a dollar?)

One site boasted of a 4,400% net return. Sounds good, until you look at what it was. $30 ad spend to sell a dog for $1,400. Not exactly something you can repeat on a daily basis. Twice a year if you're lucky (and the dog's not). And no follow-up on how much it cost to sell the next dog (a year later, despite updates to other stats in the "study", that figure wasn't - so it's safe to guess that it was a one-shot affair, and that any money spent after just inflated the original cost).

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