Facebook seeks to resolve doubt over social media influence

Branding your business on social sites like Facebook can help attract new customers. However, industry experts continue to doubt Facebook’s ability to convert leads to sales, especially with display ads and direct promotional efforts increasing in strength.

A new Forrester report, titled “The Purchase Path of Online Buyers in 2012,” analyzed conversion paths on 77,000 orders to determine what sources returned the most revenue. The data found that fewer than 1 percent of transactions could be traced back to social links – a major hit for sites like Facebook, which pride themselves on social reach.

The study also found that customers view social media favorably, but use it as more of a discovery tool. Based on a survey from 2011, about 48 percent of respondents indicated social media was a great way to discover products and brands, but only 17 percent said they purchased something based on a specific post. What’s more, 40 percent of respondents said social media is a great way to learn about sales and promotional events.

Facebook looks to counter this research with data of its own in association with Datalogix. The new collective study concludes that less than 1 percent of in-store sales are tied to brand advertising campaigns where a user clicked on a display ad. In fact, Facebook’s head of measurement and insights, Brad Smallwood, says that ads can see a 40 percent ROI lift when they’re optimized for reach and frequency without depending on clicks. Facebook hopes to prove that branding through its services can produce more lucrative results than promoting through display ads, and if able to support its claim, Facebook may encourage marketers to regain trust in its services.

It’s important for industry experts not to discount Facebook as a major profit driver just yet. The social company’s promotional efforts may prove to be more beneficial than many currently believe.

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