I’m very interested in any data to help businesses maximize their return on investment with social media.
So I was happy to see ForeSee Results publish some simple findings recenty in their Key to Driving Retail Success with Social Media: Focus on Facebook (note: this is a PDF file that you download).
They surveyed 10,000 visitors to the top 40 online retail Web sites.
Some highlights I found in this brief report are:
- 69% of online shoppers use social media sites (social media users)
Of online shoppers who frequent social media sites:
- 61% friend or follow 1 to 5 retailers or brands
- 21% friend or follow 6 to 10 retailers or brands
- 10% friend or follow 11 to 20 retailers or brands
- 8% friend or follow more than 20 retailers
Note: “Friend” and “Follow” refer to customers agreeing to have an online connection with a retailer/brand.
The report asserts that:
“Site visitors who also interact with a company on a social media site are more satisfied,more committed to the brand, and more likely to make future purchases from that company.”
Facebook is the dominant social network for People Visiting Online Retail Sites
The table below indicates how dominant Facebook has become — it’s more than twice as popular as #2 YouTube and more than 3X as popular as MySpace.
Source: Foresee Results
While Facebook is clearly dominant, the report points out that 25 of the top 100 online retailers do not have any formal Facebook presence.
And finally, here’s some insight into why consumers interact with businesses through social media.
The Top Three Reasons Customers Interact With a Business’s Social Media Site:
- To Learn About Sales or Special Offers (49%)
- To Learn About Products (45%)
- To Get Customer Support (5%)
I’ll continue to share whatever I find on improving your ROI through social media.
I was captivated by John Wooden’s childhood stories, especially what his Dad taught him.
In Wooden: A Lifetime of Observations & Reflections On & Off The Court by John Wooden with Steve Jamison, Wooden says his dad gave him a piece of paper with a list of things that would guide him for the rest of his life.
He would use this guidance to shape his career, marriage and general philosophy.
The list was titled: “Seven Things to Do.” And when Wooden’s dad handed it to him, he said, “Son, try to live up these things.”
Here are Wooden’s Seven Things to Do (with short comments from me after each):
Seven Things to Do
1. Be True To Yourself
At the end of the day, there is no one whose opinion matters more than your own…so be true to yourself.
And Wooden warns you not to get caught up in how you size up to others:
“Don’t compare. Don’t try to be better than someone else. But whatever you’re doing, try to be the best you can be…”
Keys to being true to yourself include:
- Be self-aware
- Understand your values
- Be honest with yourself
2. Help Others
The old saying: “Give and you shall receive” is a powerful one.
While your motivation for helping others should not depend on others helping you back, it is surely true that you will receive back more help when you take a giving attitude.
Think of this: If we all practiced helping others, we all would be helped…and we surely all need help at some point in our lives!
3. Make Each Day Your Masterpiece
I love this one. A “masterpiece” of a day is of course different for all of us. As Wooden points out:
“Don’t measure yourself by what you have accomplished, but by what you should have accomplished with your ability.”
And he warns: “Never mistake activity for achievement.”
And Wooden echoes his #2 Thing to Do (Help Others) with this quote:
“You can’t live a perfect day without doing something for someone who will never be able to repay you.”
4. Drink deeply from good books (Wooden’s favorite is the Bible)
Wooden believes reading is a key to success (you may recall that my other hero Charlie Munger echoed the same sentiment when he said:
“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none, zero.” (read here for more Charlie Munger quotes)
Wooden reads the bible regularly and has said that if there were just one book someone had to read, it would be to read a little bit of the bible every day.
5. Make friendship a fine art
Friendship and family (which I find Wooden uses interchangeably) are key to success in life, but they require some work.
Wooden has these tips on friendship:
“ Friendship comes from mutual esteem, respect, and devotion. A sincere liking for all,”
6. Build a shelter against a rainy day
Pretty self-explanatory…however, I don’t think Wooden means this literally.
A shelter could be physical, financial or emotional…family and friendship, afterall, are perhaps the most valuable shelter to be building in your life.
7. Pray for guidance and count and give thanks for your blessings every day
Wooden certainly believes in a higher power — here’s a video of Wooden reciting a relevant poem (Wooden loves to write poetry).
More John Wooden Videos:
To see more of Wooden, check out this cool talk by Wooden at the TED conference and a John Wooden profile on Charlie Rose (including interviews with Bill Walton and Bill Russel).
The popular and talented Lisa Riolo stopped by my virtual office the other day to talk about Performance Advertising, why it’s important to your business and her new Impact Radius startup.
Here’s our Q&A:
Q: Hi Lisa, what is your definition of Performance Advertising
Most everyone understands how “advertising” works. The difference with a performance model is primarily how the pricing works.
When the media with the audience (sometimes called the publisher) agrees to receive their revenue after the advertisements generate results (meaning the consumer actually responds to the ad and, usually, buys something)–you’ve got performance advertising.
This approach creates a lot of accountability within the advertising model and let’s everyone involved measure their effectiveness in promoting and selling products.
Lisa After Her 60 Mile Breast Cancer Walk
Q: You have enormous experience in this space…would you walk us through the history of performance advertising (at least the major milestones)?
Sure. About ten years ago–performance represented about 5% of the total spend in advertising for both online and traditional media. In the time since, the processes used to buy and sell traditional media haven’t changed much.
Performance advertising online, on the other hand, has grown substantially and now represents more than 60% of the spend. Why the difference?
Affiliate networks, which aggregates the companies willing to advertise on a performance-basis, started gaining real momentum in the late 90s and early 2000s.
Search engines have also played a key role by opening up greater distribution of ads to a proactive audience.
Offline media hasn’t had a centralized location to discover the real value of performance deals. Instead, the brokers often times pocket up to half of the money being offered for a sale or lead.
Further, I think technology was a big factor in the enormous growth online. Not only do we easily track consumer response online, we deliver the associated data and metrics real-time.
So, the speed of optimization (which is critical to effective performance advertising) is rapid–especially compared to traditional media.
We were amazed to learn that traditional media, which is equally metric-driven as online, waits days, sometimes weeks, to see the data associated with a performance campaign.
Our objective, with Impact Radius, was to deliver the same type of technology that online advertising considers commonplace to offline media.
If all of performance advertising were to have a single technology platform to manage their relationships–the opportunities for growth are exponential.
Q: Which types of businesses should care about Performance Advertising and why?
On the advertiser-side, any business that has established basic awareness of its brand and products should take a serious look at running performance campaigns.
Media partners (meaning companies with media properties that generate some revenue through advertising) should, at the minimum, run some ads on a performance-basis in order to continually establish the baseline value of their ad inventory.
I’ve had so many business-owners, after hearing about this model, say that all advertising should be priced with a performance component.
Unfortunately, they also doubt that the media will agree to run ads on a performance basis. So, finding a willing media partner is usually the challenge for a smaller or new business trying to sell their products and services.
This is why it makes sense for an advertiser to list their “offer” with a company like Impact Radius. It’s easier to discover media partners that will promote them on a performance basis.
That said, either company (the advertiser or the media partner) can usually get a deal in place if they are willing to add a performance component.
It is the metric driven approach and the resulting accountability that brings a negotiation together.
Q: Can you share any success stories of businesses using Performance Advertising?
I love to reference companies like Zappos and Netflix as great examples of online businesses that built their original customer acquisition strategy on a performance advertising model.
Each one of these companies let performance-pricing drive their early advertising efforts and partnered with companies large and small to refer new customers.
Perhaps more interesting, though, are the companies that earn significant advertising revenue on a performance basis.
Many companies recognize that Google makes a lot of money advertising within their search engine.
Google doesn’t charge for eyeballs, though. Google only charges its advertisers if consumers actually respond to an ad and click through.
The measured response and resulting fees makes that a performance advertising model.
Other companies, like Upromise, earn revenue not only for sending visitors to an online retailer like Zappos, but because those visitors actually complete a purchase. Upromise takes a portion of the money earned on a performance-basis and sets it aside for a child or grandchild’s college tuition.
What I find most exciting, though, is that TV, radio and print media are (to varying extents) struggling to generate ad revenue.
In doing market research for Impact Radius, we discovered that many of these media companies will run more ad inventory on a performance basis than was previously believed.
The media companies understand that if their audiences respond to ads and generate new sales for the advertisers they can earn big dollars. Local newspapers can get a piece of every coupon redeemed or every phone call made.
Q: What are some Performance Advertising tips that you can provide businesses out there?
Advertisers, when approaching media partners, should start off with a “hybrid” pricing model.
Spend some up-front money on placement and add the performance element (e.g. $5 for every incoming phone call or 5% of all merchandise sold) on the back end. Track the results and make sure both sides have access to the performance reports.
Once your local radio station starts getting reports showing their effectiveness at driving sales or leads–they can optimize their efforts. This approach gets everyone aligned and working toward the same end objective.
As a deal grows, it makes sense to utilize a third-party tracking technology.
This is also a relationship business. It is critical, for the model to work, that both advertisers and media partners are in direct communication.
Nobody should be in the dark about your partner or its capabilities.
Q: Who are the main players in the Performance Advertising space right now?
In the online world, most all advertising is managed on either a CPA or affiliate network.
The upside of this is that most of these networks do offer the ‘trusted’ third-party tracking technology.
The downside is that the partners do not work together directly and, in the case of the CPA networks, are completely hidden.
The biggest companies selling merchandise or acquiring new customers (i.e. with performance advertising campaigns) include nationally recognized brands like Amazon and eBay.
There are a lot of small to mid-size businesses, and even start-ups, that build performance advertising into their plans.
There are literally thousands of companies, from bloggers to coupon and deal sites to media brokers, that get paid on a performance basis.
Q: How is Impact Radius positioned in the Performance Advertising market?
We’ve brought the tools and technology to both online and traditional channels–and have introduced a “clear box” philosophy that ensures direct negotiation and communication. We can track online, call and promo code conversions.
What is also unique about Impact Radius is that we’ve automated all of the processes involved with ad placement, deliver of the data and the exchange of money.
Media partners are excited, for a number of reasons, including that they can paid for the results they’ve driven as often as daily. This improvement in cash flow gives them significant potential for accelerating growth.
Q: I understand Impact Radius has some unique capabilities — that said, who do you consider Impact Radius’s closest competitor?
Some people have said we’re a better alternative to the affiliate and CPA networks.
I do think we’ve improved on some of the standard product features you’d find in a network, of course.
But the biggest adoption I think we’ll see are the private relationships that migrated off network. The private, in-house relationships are usually kept off network either because of the costs or rules established by the third-party.
So, we really compete with in-house solutions since we’re providing the flexibility and controls of their internal tracking with the added scalability and features usually found only within a network environment. And our pricing is aligned with the advertisers and media partners interests.
Q: What’s the best way for someone to get in touch with you or Impact Radius?
Visit the recently unveiled Impact Radius or you can find me on Twitter @lisariolo or at my blog.
Thanks, Lisa
My pleasure. I look forward to sharing more in the future. Until then, wishing you and your readers continued prosperity!
