March 11, 2014, 10:37 AM

Retailers focus on social media results

Amazon.com and others are generating significant revenue from Facebook, Twitter and other social networks, said Zak Stambor, Internet Retailer managing editor, today at the annual ChannelAdvisor Catalyst client conference in Las Vegas.

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The 500 retailers ranked in Internet Retailer’s 2014 Social Media 500 sold an estimated $2.69 billion last year from shoppers clicking directly from social networks, Zak Stambor, Internet Retailer managing editor, said today at the annual ChannelAdvisor Catalyst client conference in Las Vegas. That’s up 62.5% from 2012.

“The estimate actually understates the number of sales stemming from retailers’ actions on social networks because it only accounts for direct clicks,” Stambor said. In reality, social media is known to influence many sales although consumers may not click right from a social web site to a retailer’s check out.

The growth stems from retailers—and social networks—increasingly looking at what sales they can drive from their social media initiatives.

“Retailers aren’t looking at proxies to understand the ROI from their social initiatives,” Stambor said. “They’re looking at direct results.”

That’s a marked shift from a few years ago when retailers looked at measures such as how many followers they had to understand whether their social network initiatives were working, he said. Now retailers like NoMoreRack.com and Amazon.com are increasingly looking to drive shoppers to click to their sites and buy from social web sites.

And more shoppers are clicking from social networks to retail sites: Social Media 500 retailers’ social network referral traffic jumped 42% in 2013. On average, the 500 merchants in the guide got 5.14% of their site traffic from social networks last year, up from 3.64% in 2012.

That increase in referrals has come as Facebook and Twitter are increasingly focused on helping merchants drive sales, as that leads retailers to advertise on those social networks. For instance, both social networks have, over the past year, rolled out tools enabling merchants to retarget consumers with ads based on their off-social network activities. Facebook has also launched  a number of ad targeting tools to make the ads that consumers see across its social network even more personal.

Other social networks are also increasingly looking to help marketers drive sales via ads. In the past year, Instagram, Pinterest and Tumblr have rolled out new ads units, too, Stambor said.

More social networks offering more ad units that let merchants tailor their messaging to consumers is resulting in more social ad spending. Marketers worldwide increased their spending on social network ads by 37.3% year over year in 2013, according to a recent report from eMarketer Inc. The market research firm expects spending to grow another 27.3% this year and 25.4% in 2015.

Top social retailers are increasing their spending even more. The 40 retailers in the Social Media 500 that shared such data with Internet Retailer boosted their social ad spending nearly 300% year over year in 2013, Stambor said.

And while many retailers used to view brand awareness as the justification for spending on social networks, a growing number are measuring direct sales, he said.

“Retailers are focused on results,” Stambor said. “And that means driving shoppers to buy.”  

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