A new Gallup survey appears to confirm what many big companies have already suspected: Simply having a lot of fans on Facebook (or followers on Twitter or Google+) doesn’t always translate into selling more corn flakes … or cars … or other products.
“Most consumers aren’t visiting social media sites to engage with brands — they are there to interact with people they know, says a Gallup report released Monday. It goes on:
“When Gallup asked more than 18,000 consumers about the influence of social media on their buying decisions, 62% said they had no influence at all. Even among millennials (those born after 1980), whom companies often think of as the core social media audience, 48% said these sites were not a factor in their decision-making.”
While the survey doesn’t focus on Facebook exclusively, an article in Monday’s Wall Street Journal suggests its findings may underscore a change in the way many companies are using the social network.
In the past, many companies created and promoted Facebook pages because it seemed like an easy way to reach consumers: If you could get people to “like” your page, your posts would show up in their News Feeds for free. But Facebook has changed its formula in recent years, so users no longer see every post. Companies have groused that the change is Facebook’s way of pressuring them to buy ads instead. Facebook, however, says it’s putting the priority on posts that users want to see, because there is too much material to show everything.
That’s not to say that having a presence on social media doesn’t help a business. Gallup said companies can boost sales by interacting with customers online:
“ … companies’ use of social media to provide timely responses to questions and complaints accelerates brand loyalty and, eventually, sales. When it comes to social media efforts, businesses stand to benefit when they utilize a more service-focused approach rather than one dedicated to simply pushing their products.”
Some big companies are paying heed, by moving away from simply trying to build followers. The Ritz-Carlton chain told the Journal that it’s worrying less about adding more fans and focusing more on analyzing social media conversations to see what people like and don’t like about its hotels.
Meanwhile, Gallup notes: “U.S. companies spent a combined $5.1 billion on social media advertising in 2013, and they obviously believe that this presents them with a return on investment.”
Facebook is happy to help. The social network has introduced a number of new advertising formats that go beyond simply highlighting endorsements or recommendations from friends. Most recently, it’s also begun selling ads targeted to users’ interests based on their visits to other sites around the web.