If you want to get a glimpse of the economic future, focus on the emerging trends driven by those defining the evolution of the social Web.
Social media is not only democratizing influence and upsetting the traditional media ecosystem, it is now an indicator for a potential economic resurgence. Leading metrics firm, comScore, released its Q1 U.S E-Commerce Spending Report recently, finding that online retail spending approached $34 billion in Q1 2010, which represents a 10 percent boost compared to last year. The surge also symbolizes the first time that growth rates hit double-digits since the second quarter of 2008.
In its detailed report, comScore also revealed both interesting and promising insight into the social consumer and their spending habits. We are officially entering an era of social shopping, where individuals influence and are influenced by their peers within traditional social networks and a new genre of group buying or social commerce networks. Services such as Groupon, This Next, LivingSocial, ViewPoints and Milo represent what comScore dubs as Social Retail 2.0. At the very least, these networks, in addition to social powerhouses Twitter and Facebook as well as location-based content and connectivity networks such as Yelp and FourSquare represent the need for brands to think beyond their domains in order to connect their products and services to consumers where their attention and interest is focused.
Consumers on Twitter
According to the report, 23% of Twitter users follow businesses to find special deals, promotions, or sales. Of that, 14% of Twitter users reported taking to the stream to find and share product reviews and opinions.
Consumers on Facebook
The time consumers spend on social networks, especially Facebook, continues its steep rise. But, top retail display advertisers are hesitant to advertise in social media.
As we can see however, several forward thinking brands are experimenting with the ability to earn awareness and “likes.” comScore’s Ad Metrix ranked the top social advertising foragers, with Netflix, ebay, and Teleflora taking the top three spots.
Online Spending
If there were doubts as to whether or not engagement or paid presence within social networks offered benefits, perhaps comScore’s research will shed some light on your consideration. The revelation as surfaced in this study, is that Facebook and Twitter visitors spend more money online than average Internet users. And, as Facebook usage increases, so does the propensity to spend online.
On Facebook, heavy users spend on average $67 online, topping the total internet average of under $50. Active Twitter users weren’t far behind, spending on average $63. Perhaps most interesting here is that on Twitter, usage didn’t parlay into spending. Medium users on Twitter spent $75 online compared to $61 on Facebook and light users on Twitter also outspent Facebook users $73 to $50. Either way, heavy, medium, and light users outspent general Web users by upwards of 64%.
Taking a snapshot view, members of social networking sites spend 1.5x more online than the average Internet user. However, engagement is absent from the comScore report. While we review spending and advertising behavior, it would behoove brands to study the opportunities rife within participatory circumstances where insight, direction, special offers, and support are offered person to person. With that said, I recently wrote about the Top Brands on Twitter. And, if you review the data shared at Fan Page List, we can also observe the Top Brands on Facebook as measured by the size and growth factor of brand pages.
With 7.9 million “likes” (formerly fans), Starbucks is lauded for its consistent engagement across multiple networks, fusing reciprocity, recognition, and reward in its day-to-day engagement with consumers and influencers alike. Coca-Cola follows with 5.8 million and Redbull and Victoria’s Secret follow in fifth and sixth respectively with 4.3 and 3.8 million. The balance between marketing, advertising and service is far from an exact science and the formulas for assessing ROI is unique to the cases, the objectives, and the resources required brand by brand. What’s certain is that Return on Ignorance if far more costly and devastating when competing for the future than we might have previously expected.
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Ate this report up the day it released. Social commerce is not the next thing, it is the now thing.
Social marketing is still cheaper than other forms, nets a higher yield, and results on higher average transactions. Does it get any clearer than that?
Affirmation of what we probably knew, but may have been ignoring. Now we need to use it and prosper. Thanks for the wake up call!
I believe in a saying: where there is critical mass, there is cash. A few of the those brands I didn't know had that large of a following, with Converse being the brand that sticks out (not sure how much of this is helped by their John Varvatos designed line) to me. More than Nike, Puma, Adidas, Reebok. Interesting. Surprised to not see H&M or Apple in there. Blackberry could use a hint with all this and try to innovate themselves a bit (see Domino's for example).
Those brands that are charging ahead in the social media world are doing so really getting back to the basics of connecting with their customers. And they've probably cut ad and marketing expenses immensely, while also increasing not just their brand awareness, but brand liking as well.
Customers want to feel valued, important, and also empowered to speak their minds with someone (or team) listening.
Props to the term “Return on Ignorance” Brian.
Good stuff.
If you want to peek in the economic future to concentrate on emerging trends to drive by hmmmm defined as the development of not only the social Web.Social Influence shocking to democratize the media and traditional media ecosystem is now a potential indicator of economic recovery.
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Brian, thanks for the mention. In addition to our Top Brands on Facebook list, you can also check out the Top Brands on Twitter now since we've added Klout scores: http://bit.ly/9QhloP
That's supper power now ……..
Social shopping is so fascinating. I just wrote a post on social shopping on my blog as well as posted a slideshare presentation with about 16 Groupon knockoff sites that sell stuff fast. You might find it interesting/helpful.
Indeed a wake up call…and an oppotunity which can't be ignored.