The Relevance of Social Media to Drive Purchase Decisions

Gerard Tollefsen - June 2, 2009

Do social networks have the power to influence what we buy?  Do people actually turn to social media sites for guidance on products or services?  If the answer to either of these questions is NO, should businesses ignore the social networks as a viable marketing channel?  The answer to that last question is ‘absolutely not’.

I recently read a report conducted by Knowledge Networks and found the information both interesting and ridiculous at the same time.  Here are some of the “highlights” from the report that I found interesting:

• 83% of the Internet population (ages 13 to 54) participates in social media
• 47% of these users participate in social media on a weekly basis
• 16% of social media users say they are more likely to buy from companies that advertise on social sites

The report continued by indentifying how social networks are used by their loyal followers for guidance on making purchases.  Here are some of the “highlights” from the report I found ridiculous:

• Less than 5% of social media users regularly turn to these sites for guidance on purchase decisions
• Participation in social media is widespread among those ages 13 to 54, but when asked whether they regularly turn to these sites when trying to make a purchase decision, the highest percentages among nine categories were 4%, for travel and banks/financial services.

I won’t list the other 8 categories (all the stats were lower than the 4% for travel) but the overall message from the report was that people spend time on social networks for many reasons…the least of which is to get guidance on buying products and services.  That sounds a lot like television and radio to me.  I do not know a single person who says, “Hmmm, I need to turn on the TV so I can watch the commercials and get some help buying my next car”.  In addition, I do not know a single person who turns on their radio while driving home from work, so they can switch off the songs to find radio commercials in order to help them buy their kids next birthday present!

The premise that people do not use social networks, like Facebook or MySpace, for guidance on purchasing decisions is ridiculous…of course they don’t (well 96% or so do not).  They visit and spend time on social networks to be entertained, and that’s the same reason people turn on their TV at home or their car radio during a long drive. But TV and radio can be powerful advertising mediums because you can reach a large (and somewhat targeted) audience.  The same applies to advertising on social media sites…you can reach a large and highly targeted audience to promote your message, product, or service.  The notion that people don’t “turn to” social media sites for purchasing decisions should not stop you from marketing to this large, targeted audience…it works for TV and radio…and can work for social media networks as well.  Add Google Analytics into your marketing program and you can track how well these social network sites perform in terms of driving quality visitors to your site.  This is something TV and radio advertising cannot provide as a measurement of success (yet I still see and hear commercials on TV and radio all the time, interesting).