Dec 042012


An IBM Holiday Benchmark reportpointed out that social networks like Facebook, Twitter, LinkedIn and YouTube generated online sales on Black Friday amounting to (drumroll please…)


You read that right. 0.34%. And get this: Twitter contributed 0% to Black Friday revenue. That’s literally nothing.

These figures are a 35% drop from Black Friday, Thanksgiving 2011 figures. So now, it’s clear that these social media platforms, as ubiquitous as they are, do not directly contribute to sales.

But then, who expected them to in the first place? Facebook and Twitter accounts are not online shops, after all. Well, small businesses may use them to take orders for productsand services they make available, which technically makes them stores. But the majority of businesses do not actually use their Facebook fan pages or official Twitter accounts to sell their wares, so those measly figures should not spell doom for the world, especially when the same report claimed Black Friday online shopping revenue increased by 20.7%.

So, should businesses abandon their social media initiatives since they don’t generate sales? Of course not! Social networking may not directly bring increased sales, but they certainly contribute to a business’ success. Here are five reasons businesses need social media:

1. Social networking equals social proof.

These days, consumers tend to consult the Internet for anything, from what to cook for a family dinner to homemade solutions for acne breakouts. They have also adapted this behavior when purchasing things, especially major acquisitions. People these days go online to research products they intend to spend their money on. They look through official websites, consumer forums, message boards, review blogs, and yes, Facebook fan pages and tweets. Businesses without any social media presence find themselves limited when it comes to engaging current and prospective customers. Furthermore, without any social media profile, a business will be hard pressed to prove to customers looking for information online that it is a trustworthy and reputable company.

2. Social media gives a business the human touch.

Of the various ways businesses make themselves known to the public, social media sets itself apart because of the different environment and relaxed restrictions it provides. The usual lingo being used in conventional marketing approaches does not apply to social networking. The way businesses engage their customers on social media platforms allows for more personalized interaction. Stuffy rules and one-policy-applies-to-all strategies have no use in social media. Once customers like a Facebook fan page or follow a Twitter page, they expect to read real exchanges, not canned answers. Because of that, they tend to express themselves more freely, knowing someone from the company will hear them.

3. Social media allows businesses to widen their sphere of influence.

What exactly is a sphere of influence? This refers to the extent of influence an entity has on the people it interacts with. Using social media, businesses can increase the amount of persuasion they have over people subscribing to their niche, making them opinion shapers and influencers. Businesses that develop relationships with customers through social media increase their clout, or sphere of influence in the market, furthering their companies’ credibility and reputation.

4. Social media is used by everyone, including the competition.

Advertising on Facebook and Twitter have become multi-billion dollar industries. It’s almost impossible to find an industry not represented on these social media platforms. Though the big boys do not necessarily use them to sell, many small businesses do use Facebook as a sales channel. In fact, according to market research firm eMarketer, close to 40% of small businesses rely on social media to sell their goods.

For more established companies, social media is the way to go for cheap but effective advertising, and the amounts funneled for 2012 have increased from last year. This suggests that social media used by either small or big businesses brings in results. If a company has resisted using social media, there’s a huge probability it’s getting left behind by the competition.

5. The target audience is already there.

With more than a billion users, nobody can deny that Facebook has lured many people into its lair. Twitter is no slouch with 500 million users, and even if critics argue that half of those accounts are fake, it still cannot be denied that people visit the site to create those fictitious accounts, and see ads and other business-related materials along the way. Any astute businessman would recognize that his customers are somewhere in that billion. Ignoring people in social media would be letting go of a huge chunk of a potential market, and that’s a disaster in the world of business. With mobile shopping soaring by 24% this Black Friday, it can be safely concluded that a majority of these shoppers who used their mobile devices were referred by social media platforms to online shops.

So, while a majority of businesses did not rake in millions in sales from their social media accounts, not a lot of people really expected them to. While social media use for business does not equal a generation of sales, it certainly gears toward engagement, brand awareness, and generation of leads (meaning, customers are led to the product, service, or website that actually sells the goods). Businesses that recognize this are slated to reap huge rewards.

Trixie Clark
Writing blogs about technology. Visit Cash For iPads and see some of the services and benefits that they offer.
  • Justin Germino

    Interesting statistics for sure, I would imagine the same isn’t true for smaller companies and affiliate marketers however. I have seen a major boost myself in Amazon affiliate sales over Black Friday as many affiliate marketers I know have. Also smaller companies tend to offer discounts with web only coupons and offers, the big retailers typically just showcase products, but leave the consumer to find where to buy them whether from Amazon, Walmart, local retailer…etc. They don’t directly drive sales as much and focus on using social media just to showcase their brand rather than specifically link to sales.

    Social media is a way to build trust, recognition and help establish and keep a customer base which leads to more sales in the long run and repeat customers, but may not increase flash sales.

  • Mobile prices in pakistan

    Right said Divino, Every one is there on social media and its the best place to target for business :)

  • BlackWoods

    They don’t directly contribute to sales, yes that’s true but is that statistic counted from those who can directly buy from Facebook App? And Twitter doesn’t have e-commerce feature built in too that’s why it must be 0%.

    These platforms are still very useful in delivering the message and giving exposure to your promotions.

  • Crash Cloud

    Social media is not yet a great way to generate revenue, but to your point, the benefits from brand awareness and advertising is priceless. Facebook’s KPI (key performance indicator) is the human population! That is pretty impressive and the results of a successful advertising campaign on Facebook can net some very good offline sales results.