The growing number of influential Weibo commentators are increasingly opening their own online shops or promoting products.
Digital River’s new SocialStream tool helps determine the payback of using Facebook and Twitter.
Many e-retailers feel they need a presence on social media sites such as Facebook and Twitter because such sites reach many millions of online consumers daily. Meanwhile, corporate number-crunchers increasingly want evidence such channels add something to the bottom line. Last week Digital River Inc., a provider of e-commerce solutions, announced a tool that aims to meet their request.
When companies first started using social media, it was initially just a way of communicating with customers, says James Gagliardi, Digital River’s vice president of user experience and design. Most weren’t thinking it would drive revenue. Historically, he adds, promotions run on companies’ Facebook, Twitter or other social media accounts were administered by their marketing departments without much involvement from those responsible for tracking income.
Now, Digital River clients that deploy its new SocialStream tracking tool can send any product promotion or other announcements through their Facebook and Twitter accounts and receive reports on how much traffic and revenue they generated, conversion rates, and other metrics such as revenue per visitor, says Jim Wehmann, senior vice president of global marketing at Digital River. The company may add other social media sites, such as YouTube, to SocialStream in the future. Digital River would not reveal the cost of the tool and said it is based on negotiations with each client.
Experts say this kind of tracking capability is likely to become a standard feature in e-commerce systems.
“What Digital River has done is a bit ahead of the curve in terms of integrating this capability directly with their platform, but it may not be unique for long,” says Brian Walker, an analyst with Forrester Research Inc. He points out that tracking the impact of social media in dollars and cents is not a major technical challenge. But for several years, he says, companies have tended to see social media as a way to interact with prospective customers—soliciting feedback—for example, and it’s very difficult to measure whether that has much impact on the bottom line. But, he says, if an online retailer is using these social tools to market products and offers, they will likely want to measure the effects on sales and the return on investment of that activity.
Wehmann says it’s difficult to put a price tag on SocialStream since it is integrated into Digital River’s software-as-a-service package, and the cost of that varies with each client. To track revenue and conversions on Facebook and Twitter, retailers click on the social networks’ names, which are listed amid other more traditional channels that e-retailers track, such as paid and search advertising.
Wehmann says SocialStream could convince companies to more heavily market products through Facebook and Twitter if those social networks are proven to drive revenue or traffic. “Chief financial officers really want to know that these activities have merit,” he says. “This is going to be a good thing for us and our clients.”