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Adobe Study: Social Media Undervalued Nearly 100%

Web analytics tend to undervalue social media by emphasizing the last click that leads to a purchase, instead of the first click that builds awareness.

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Social media drives nearly twice as many sales as it's commonly credited with, according to a study conducted by Adobe.

The latest Adobe Digital Index report argues that the Web analytics that marketers typically use to judge the value of a campaign underestimate the impact of social media because they attribute a sale to the last click a user made prior to coming to the site where the purchase will be made. However, if you shift the frame of reference from "last click" to "first click" analysis, the value of a social media click turns out to be much higher. That is, an analysis sophisticated enough to detect a user's first visit to a retail site and correlate it with the subsequent visits that lead to a purchase proves that social media can be the thing that gets the consumer interested in the first place--even if the visit that results in a purchase might not come from a click on a social media site.

For example, a visitor interested in buying a new watch might click through to a jeweler's website from a Facebook advertisement, or a Facebook link posted by a friend. After mulling over the purchase for a few days, that same person might return to the site after searching for the name of the retailer on Bing and make the cash register ring. First-click analysis would give credit for the sale to Facebook, while last-click analysis would give it to Bing. Adobe simply suggests they both deserve a share of the credit.

By last-click attribution measures, the average value of a social media click to a retail site is about 60 cents. That's the average of all the purchases, diluted by the number of people who clicked but didn't buy. However, the average value of a first click from social media is nearly double, $1.13. The first click value of a Facebook visitor is a little higher, compared with other social media sites, at $1.28 in the retail example.

The numbers cited here all are from the retail example in Adobe's analysis, but examples from the travel and media industries also are included in the full report.

[ Confused about where to spend your online advertising dollars? See How To Choose Between Google AdWords And Facebook Ads. ]

Search clicks still turn out to be more valuable overall. A first click on search is worth $3.85, while a last click is worth $2.78 in Adobe's retail example. The Adobe report points out this doesn't necessarily mean that search provides a better return on investment. To determine that, you have to factor in how many clicks you got and how much it cost you to attract attention in each medium.

Still, the continued primacy of search reflects the idea that search is an expression of intent, where someone who enters a product or product category name into search is likely to be shopping for that product or product category.

That might be good news for Google and its plans for combining search with social media.

Follow David F. Carr on Twitter @davidfcarr. The BrainYard is @thebyard and facebook.com/thebyard

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Deb Donston-Miller
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Deb Donston-Miller,
User Rank: Apprentice
3/23/2012 | 8:38:35 AM
re: Adobe Study: Social Media Undervalued Nearly 100%
I'll bet that first-click dollar figure for social is even higher with the rise of Pinterest-style platforms, where users' profiles are often essentially self-selecting custom catalogs.

Deb Donston-Miller
Contributing Editor, The BrainYard
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