Reality: The Social Media Marketing Honeymoon Is Over

Social media, social media marketing, and social networking have been the subject of much hype, buzz and marketing budget disruption for big and small business alike.

Most businesses entered into social media marketing as a defensive strategy because they were afraid of losing out to competitors who were quicker to adapt and leverage this new platform.

Buoyed up by a seemingly endless cavalcade of social marketing experts demonstrating how their own social marketing success was evidence of how social media marketing would work for each and every business, if only they invested cash, time and effort.

Businesses bought into social marketing wholesale. Huge marketing budgets were allocated for social marketing campaigns intended to catapult the marketing reach and social influence of that business into huge, untapped online markets.
Business and social media marketing today

Business has now invested several solid years in social marketing. It’s been a wild ride. Stories abound of incredible marketing successes, dismal social media failures, and everything in between.

But what is the bottom line?
Social media’s shocking ROI for Black Friday

According to research by Forrester:

“Social tactics are not meaningful sales drivers”

They arrived at this conclusion after analyzing the primary sales drivers for eCommerce and found that less than 1% was driven by social media.

But this was prior to Black Friday and Cyber Monday of 2012. Surely, several years of investment into social media marketing would have paid dividends on over the biggest online shopping frenzy of the year?

According to IBM Smarter Commerce, which tracks sales for 500 of the top retail sites, social media made up less than 1% of Black Friday sales.

FaceBook, LinkedIn and YouTube combined contributed a dismal 0.34% to Black Friday sales.

Twitter, contributed 0%.
But social media has value, right?

Many proponents of social media marketing will point out that social media has less tangible benefits. It’s quite reasonable to assume that someone who sees your brand on FaceBook may not necessarily buy there and then, but may make a purchase further down the line.

Yes, of course, this is absolutely true. There’s no debate about whether or not it’s productive to have people talking about your company, brand or product on the social networks. Generating buzz, and building social influence do have value.

But let’s go back to the bottom line. Consider what your business has invested into all things social in the last few years. In tangible benefits, social media marketing has contributed less than 1% of your revenue.
Working out social media’s value

So, has this provided you with a positive ROI? If the answer is yes, then there is no further debate and you can continue happily with your social media marketing strategies and campaigns.

If the answer is no, then you need to consider the value of the intangible benefits of social media marketing.

Let’s be generous. Let’s assume that the intangible benefits of social media marketing offer an entire order of magnitude more revenue than the direct revenue. This would mean that social media brings in slightly under 10% of your online revenue.

Compare this to how much you have invested in social media. Do you like what you see?
Why business has gotten social media wrong

Social media marketing has been driven by businesses’ fear of losing competitiveness. This is not the same as adopting a new marketing platform because it has proven itself time and again.

The one thing that social media has actually marketed very well is itself! This is because social media has a vested interest in social media.

But why doesn’t it work for business?

Buying “likes” was never a smart idea
Likes don’t have much intrinsic value
Being great in social media doesn’t trump good products and service
Publishing great content requires the skills and expertise of a publisher
People immediately assume there’s bias in content that comes direct from a company (read How social influencers can grow your business online for a good way to get around this)

How to use social media marketing properly

Businesses’ underlying error in judgement is this:

Business mistakenly views social media as the connection with customers. It’s not. Social media is a tool to connect with customers.

In other words, that connection with customers that will make them ready to buy is not sufficiently met by social media. Social media is a great tool for reaching out to customers, but it’s not the whole equation.

That’s why so many businesses are able to obtain fine looking social media marketing metrics (i.e. plenty of likes, lots of “engagement”), but completely fail to convert it to revenue.

Here’s what you do to fix the problem:

Start treating social media like a tool that reaches out to customers
Stop believing it can magically conjure sales, if only you get it right
Realign your expectations to meet reality
Create a strategy to build on the achievements of your social media marketing
Be creative and innovative in how you look to further increase trust and engagement online

In other words, start looking at social media marketing as a link in the chain, instead of the whole chain itself.

How you take your engagement with potential customers that have been reached via social media marketing is up to you. It depends on the type of business you are, the type of products and services you offer, and a whole host of other things.

If you can’t think of ways to do it, pay someone who can. The great thing about this type of problem, being directly tied to revenue, is that you can offer an expert an incentivized pay structure, so that you only fork out the big bucks if the strategies they put in place generate big bucks.

What are your thoughts on this analysis of social media marketing? If you disagree, why? How do you explain the dismal failure of social media to drive sales? If you do agree, what are you going to do to improve conversions and drive sales online?

History: Top 50 Facebook Stores, Top 20 Facebook Store Solutions

Want to know who’s doing what, and with which technology partner in the fabulous world of f-commerce?

Then look no further.

Here are the top (most liked) 50 e-commerce enabled Facebook pages and the store solutions they are using – as captured by f-commerce consultant Steven Hall, from 150 hours of sleuthing with his research team (and then a little editing from us, adding in some omissions).

All in all, it’s very a mixed bag that compares apples with pears in the Facebook world of social commerce. Some of these f-stores are basically no more than glorified banner ads linking to product pages on external websites – whilst others are fully fledged stores that handle transactions within the Facebook environment.

But the list is still a useful reference resource – since browsing through it you’ll get an clear idea of what is currently being deployed in terms of f-commerce today.

Of course, it’d be nice to list the f-stores by sales – but the world is currently not that nice, and we have no access to that data – so the list is ranked by page ‘likes’.

20 Leading* F-Commerce Software Solution Providers

8th Bridge
Adgregate Markets
Resource Interactive
Shop Tab
Storefront Social

* Powering f-stores on Facebook pages with 100K+ likes (size, isn’t everything – we know – and we’re compiling a full directory, including new solution providers). But do let us know if we’ve missed any f-commerce software being used on pages with 100K+ likes.
Top 50 Facebook Stores*

Lady Gaga (29,866,781) (Music) (Bravado)
Justin Bieber (22,796,867) (Music) (Bravado)
Starbucks (19,970,760) (Retailer) (Custom)
Green Day (13,066,082)(Music) (Bravado)
Grey’s Anatomy(12,238,638) (TV) (ShopIgniter)
Muse (8,766,601) (Music) (?)
NBA (7,685,026) (Sports) (Milyoni)
Dexter (7,249,844) (TV) (Milyoni)
Desperate Housewives (7,086,194) (TV) (ShopIgniter)
Lost (7,008,866) TV (ShopIgniter)
Jason Mraz(6,971,319) (Music) (Bravado)
UFC: Ultimate Fighting Championship (4,895,618) (Sports) (Milyoni)
George Lopez (4,859,046) (Celebrity) (?)
Liverpool FC (4,693,373) (Sports) (?)
WWE (4,586,089) (Sports) (?)
30 Seconds to Mars (4,531,521) (Music) (?)
I Love Being Black (4,125,177) (Product/Service) (Payvment)
Batman: The Dark Knight (3,964,032) (Movie) (Milyoni)
Celtics (3,479,433) (Sports) (Milyoni)
Best Buy (2,605,309) (Retailer) (8th Bridge)
The Bad Girls Club (2,496,373) (TV) (Milyoni)
Discovery Channel (2,434,369) (TV) (Milyoni)
The Breast Cancer Site (2,293,656) (Charity) (SortPrice)
Dave Matthews Band (2,139,775) (Music) (Bravado)
Vans (2,046,923) (Product/Service) (Fluid)
It’s Always Sunny In Philadelphia (1,994,925) (TV) (Milyoni)
The Animal Rescue Site (1,951,204) (Charity) (SortPrice)
Reba (1,777,824) (Music) (Moontoast)
The Miami HEAT (1,695,371) (Sports) (Milyoni)
Old Navy (1,688,134) (Retailer) (Adgregate Markets)
Kid Rock (1,668,282) (Band)
Official Need For Speed (1,547,969) (Game) (Fluid)
Chelsea Handler (1,527,288) (Celebrity) (?)
JCPenney (1,483,725) (Retailer) (Usablenet)
Castle (1,294,555) (TV) (ShopIgniter)
Old Spice (1,314,395) (Product/Service) (Custom)
Deftones (1,178,593) (Music) (Bravado)
Silly Bandz (1,083,684) (Product/Service) (Shop Tab)
Children Of Bodom (1,039,116) (Music)
(RED) (1,022,681) (Product/Service) (?)
Indianapolis Colts (982,533)(Sports) (?)
Pawn Stars (977,029) (TV) (Milyoni)
Modest Mouse (938,572) (Music) (?)
Five Finger Death Punch (836,320) (Music) (?)
DOG The Bounty Hunter(808,484) (TV) (Milyoni)
Kick-Ass (807,463) (Movie) (Adgregate Markets)
AFI (769,657) (Music) (Bandmerch)
Cabela’s (753,841) (Retailer) (Shoutlet)
Cougar Town (752,602) (TV) (ShopIgniter)
Interpol(685,347) (Music)
Metal Mulisha (648,442) (Sports) (8th Bridge)
Coheed and Cambria (638,544) (Music) (Cinderblock)
Urban Outfitters(626,331) (Retailer) (Adgregate Markets)
Paranormal State (533,382) (TV) (Milyoni)

* By number of page “likes” (E&OE) – list expanded beyond top 50 as updates are received

A word of warning. Do take these lists as an indicative snapshot of the f-commerce market, not an accurate representation of it – number of likes is unlikey to be a good proxy for store sales, and there are certainly many omissions (we’ve added some – let us know what we’ve missed/got wrong).

But kudos to Steve for putting the original list together – his PDF can be downloaded here (no embedded links alas or data on page/store popularity – but we’ve added these for you in the list below).

Again, let us know of any popular e-commerce enabled pages that should appear in the list, any errors, or missing data (marked with a ?).

Given these caveats – the list of f-commerce software providers below is probably more useful than the list of stores themselves – which are in a state of, to put it politely, flux (Facebook is making big changes to how f-stores are implemented (no tabs, just app menu, iFrames not FBML – new dimensions etc), so many stores look a mess right now: This evening the much vaunted ASOS store is the wrong size and squeezing down the sidebar… Normality should be restored soon.

But for now, this list does give an interesting overview of the early movers and shakers in f-commerce, a feel for what’s possible, and insight into the sectors that are trailblazing with this nascent technology (music, sport, TV and film…).

History: The Problem with Facebook Commerce

Throughout 2011, many analysts and marketers were hugely optimistic about Facebook’s potential as a shopping platform. “It’s a matter of time—within the next five or so years—before more business will be done on Facebook than Amazon,” said Sumeet Jain, a principal at CMEA Capital. “In three to five years, 10 percent to 15 percent of total consumer spending in developed countries may go through sites such as Facebook”, said Mike Fauscette, an analyst at research firm IDC.

One year later, opinions may be shifting. Last Friday, Bloomberg reported that retailers Gamestop, JC Penny, Gap, and Nordstrom – all early adopters of f-commerce – have now closed their Facebook stores. The tech press was filled with analysis and opinion, creating a fairly rare moment of criticism for the marketing value of Facebook.

Why are these brands giving up? Generally, it seems like consumers just don’t seem interested in shopping on Facebook. Sucharita Mulpuru, an analyst at Forrester Research, noted- “it was like trying to sell stuff to people while they’re hanging out with their friends at the bar.”

Similarly, many f-commerce strategies seemed to lack ingenuity. Many brands simply converted their existing e-commerce content to Facebook. For consumers, there wasn’t much reason to shop on Facebook, when buying from a website was identical and more familiar. Ashley Sheetz, Gamestop’s VP of marketing, explained, “Customers had no incentive to shop at Gamestop’s Facebook store rather than the company’s regular website because purchasing online is already convenient.”

Despite the recent buzz on f-commerce failures, it’s not as though the concept is doomed. There are still many successful Facebook stores. However, an examination of the top f-commerce pages shows an obvious trend: most big f-commerce plays are in entertainment.

That makes sense given the role that Facebook plays in the web presence of, for example, Lady Gaga. With almost 50 million Facebook fans, and nearly a million “currently talking about” her, Lady Gaga’s Facebook page is vastly more important than It just makes sense to sell through Facebook – that’s where the fans are.

While it might work for Gaga, it just isn’t the same trend for retailers like JCPenny. Although seems to get more than 1 million visitors a day, with an impressive 5.3% regional reach, currently less than 40,000 people are “talking about” JCPenny on Facebook. The technical and audience limitations of Facebook make a simple commerce-cloning strategy ineffective.

At this point, it’s important to consider what exactly f-commerce is, and what different options are available for companies to do business on Facebook. Firstly, the Bloomberg-buzz on f-commerce failures was specifically talking about retail sales through Facebook. It wasn’t a discussion of Facebook’s advertising system, which continues to grow rapidly.

In fact, some recent stats from eMarketer show Facebook’s overall advertising model looking very strong. The charts below, from a recent eMarketer study, show that Facebook currently holds the #1 position in display advertising revenues, and is likely to not only hold, but strengthen that position over the next 3 years.So we can see a clear distinction between actual Facebook commerce – meaning selling directly on Facebook, and Facebook assisted commerce – a category which includes Facebook ads. To categorize things more explicitly, we could create groupings like:

Facebook Commerce

Facebook Stores
Facebook Credits
Facebook Deals

Facebook Assisted Commerce

Facebook Apps
Facebook Ads
Facebook Login
Open Graph
Facebook Marketing (in general)

More information on this categorization can be found in an excellent whitepaper by Syzygy, but the broad difference should be clear. And for now, it seems like while Facebook Assisted Commerce continues to rule the social web, actual buying on Facebook seems to be struggling.

We’ve already covered some of tactical failures of Facebook stores that are creating this divide. Beyond the straightforward concept that f-commerce needs to add value to be effective, there may be a broader strategic lesson here. Despite social’s obviously huge marketing potential, the days where mere platitudes like “Make it Social” could be considered business strategy may have passed.

Beyond the problems for brands, f-commerce problems reflect issues with Facebook itself. Facebook’s 2011 revenues were about $3.7 billion – certainly not a small figure. However, consider that Google’s 2011 revenues were $37.9 billion – basically an order of magnitude higher – and it’s obvious that Facebook still has a considerable need to grow and monetize.

A Google/Facebook revenue comparison isn’t really fair – Facebook’s a much younger company, and with big opportunities in many spaces – such as triple-digit user growth in developing countries, and the upcoming monetization of mobile, they’ve got plenty of room to grow.

That said, it isn’t all blue-sky growth for Facebook. With a monthly active user count of about 850 million, they don’t have that much room for to grow against Google’s 1 billion users. The reality is that Google and search just monetize better than Facebook and social. To get the 10X growth that Facebook will need to match Google, Facebook needs to go beyond user acquisition, and start making each user more valuable. The closing of Facebook stores is obviously a move in the wrong direction for a company that needs to get users to open their wallets. .

Ultimately, the whole issue is one of maturity – for brands, social marketing, and Facebook itself. As Facebook evolves, huge user numbers and poorly-defined marketing buzzwords aren’t going to cut it. Facebook and brands seem to have the same concern – now that we have the users, how do we make money? As the hype fades, we may be finally ready for social marketing realism.
– See more at:

History: JCPenney launches its first Facebook e-commerce store

We’ve seen fashion sold on Tumblr like OfaKind and smaller start-ups like Kembrel opening up stores on Facebook, but this morning, JCPenney announced the launch of the first Facebook e-commerce application by a major retailer that supports purchases directly within its Fan page.

As consumers increasingly spend online time on Facebook, its a wise decision for JCPenny to open up their Facebook store just before the holidays.

“With over 1.3 million friends and growing, our Facebook page remains a vital tool for engaging our customers as they explore and share the JCPenney brand,” said Tom Nealon, Group Executive Vice President for JCPenney. “By introducing commerce capability, we are able to take our Facebook experience to the next level, providing convenient features that encourage social integration and user contribution as our customers shop.”

The e-commerce shop is an integration with Usablenet, a leading provider of mobile and Web apps. With this technology users can complete transactions without leaving Facebook, including add to cart, checkout, edit and remove products from cart, specify shipping address, ship to store, and pay with credit card. Usablenet allows for curated inventory, search, like and share products, reviews and supports Google Analytics.

Other big retailers to open up Facebook e-commerce shops include Procter & Gamble, 1-800-Flowers and Delta Air Lines.

By Courtney Boyd Myers, Tuesday, 14 Dec ’10 ,

Shipping and tax laws for eCommerce websites

Each state has different laws pertaining to how you are responsible for taxing the product you are selling online. The congruent part of the law is that you tax if you are shipping the merchandise to a state you are conducting business in.

For example, if you have a location in Florida and Tennessee, you are shipping a product to Michigan, you do not need to charge tax on that order. However, if you are shipping to an address in Florida, you do need to charge tax on that order.

See more here: