How Social Media Users Drive Ecommerce Sales

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When the big name social media websites we use today were just a twinkle in their creator’s eye, social media sites were still around. They just weren’t frequented by nearly as many people, didn’t have advertising models that generated billions of dollars annually, and were years away from offering the numerous communication options that are standard with today’s social media channels.

Early Social Media & Ecommerce Integration

At the start of the new millennium, many social media outlets were what techies might describe as peer-to-peer (P2P) forum networks. The sites’ page design was an 8-bit graphic lover’s dream, and users could share messages, links, attachments, and, sometimes, chats — the very rudiments of online communication.

It wasn’t much by today’s standards but it marked an important event in social media and ecommerce history: It was the first time people shared information about online products through a web-based network that included social media — as opposed to communicating over a network that was simply a social medium, such as email or chat — and then used the information to inform online shopping.

Because social sites and ecommerce essentially grew up together, it took them most of 20 years to achieve the social media and ecommerce integration we’re accustomed to today — a dynamic duo that generated over $1.9 trillion in total online revenue in 2016 alone, according to eMarketer.

When tracing the beginnings of social media to the present, we see a swift increase in total social media users correlating with a rapid growth of ecommerce revenue. In 2004 — the year Facebook was created — about 817 million U.S. residents used the internet and generated $69.2 billion in total ecommerce sales. In 2016, nearly 3.75 billion Americans were internet users and created $322.1 billion in total web sales, as of early December.

Allied Wallet - 2 - google-on-your-smartphoneHow Sharing Generates Revenue

Social media ecommerce revenue that sharing generates can be calculated on two models: assisted revenue per share (e.g. someone shares a product, then places an order) and incremental revenue per click (i.e. someone sees a share, clicks a link, then places an order).

According to AddShoppers, assisted revenue per share for Twitter, Facebook, Google Plus, and Stumble Upon is $26.12, $16.31, $4.71, and $4.30, respectively. Incremental revenue per click for the same sites is $0.67, $0.41, $0.31, and $0.03, respectively.

Assisted revenue per share is significantly higher than incremental revenue per click, partly due to the psychology behind the sharing: The person has decided to buy, shares the product or service out of excitement or goodwill, then makes the purchase. With internal revenue per click, a social media user simply responds to a share by clicking the link. What they see after the click-through must convince them to buy — a situation that doesn’t happen as often.

So, where do users who generate revenue through assisted revenue per share get their “assistance” in making the purchase? What motivates them to buy?

Marketing teams that profile and segment these consumers could provide the best answer, but social media ad campaigns and the optimization of social business pages play a significant role.
A recent report from Hootsuite reveals that “Social media advertising budgets have doubled worldwide over the past 2 years — going from $16 billion U.S. in 2014 to $31 billion in 2016.”

Who’s Behind All the Sharing?

In two words, seemingly everyone. But Addshoppers provides some statistics we can use to create a user profile for who’s responsible for the majority of social media ecommerce. The table below shows percentages of shares by gender and age.

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Allied Wallet - 3 - twitterWomen tend to share more information than men, particularly women between 18 and 34. It’s speculative but demographics can give us an idea why. Between 18 and 34 occur two major events in the lives of many women that are strongly connected to products for females: marrying and giving birth to a child. If viable, demographic data such as this could further refine the user profile to help inform social media ecommerce campaigns.

What Platforms Are Used to Share?

Statistics also reveal the web browsers and types of computers most commonly used for sharing — technologies favorable to ecommerce integration. For sharing revenue by browser, Chrome, Internet Explorer, Firefox, and Safari take the cake, generating 36.61%, 21.75%, 16.75%, and 8.24% of revenue, respectively. Desktops, smart tablets, and smartphones are the most preferred computers for sharing: 92.29%, 4.50%, and 3.21%, respectively.

User Profile of the Average Sharer

At this point, statistics have taken us far enough to create a basic demographic profile for the social media user who, on average, does the most sharing. She’s 25 – 35 years old, prefers to sit in front of a desktop when she logs into her social media accounts, and would rather use Google Chrome than competing browsers. Ferreting out her other characteristics is a task for marketers.

How is This Information Helpful?

From a marketing standpoint, the statistics here are painted in broad strokes but online marketing, with an emphasis on social media campaigns, is their obvious application. The information could also be helpful to multi-faceted campaigns that involve social media profiling.

The numbers provide helpful target audience information based on rudimentary demographics. Target audience segmentation for a social media ecommerce campaign could find the statistics useful, although further segmentation would be helpful for audiences that are more heterogenous than the statistics indicate.

About Our Company

Allied Wallet is an industry-leading, global merchant service provider (MSP) whose solutions are used in 196 countries for 164 currencies, with PCI-DSS Level 1 Compliance protecting every transaction. To inquire about our services, call us today in the U.S. at (888) 255-1137, call us in the U.K. at +44 203 318 8334, or send us an email through our contact form. We proudly offer account options that support social media ecommerce goals of businesses around the globe.

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