It appears that a significant percentage of sales are being driven by consumers' "social conversations" that take place both offline and online according to a study released recently by Engagement Labs.
The report, conducted in conjunction with Koen Pauwels, Professor of Marketing at Northeastern University and BI Oslo, revealed that an estimated 19 percent of consumer sales are driven by offline and online social conversations. The report also found that between $7-10 trillion in annual consumer spending is motivated by consumer conversation (online social media made up half of the measured social contribution to sales, while offline word-of-mouth contributed to the other half).
The Engagement Labs report revealed another interesting insight that a little social improvement can result in big gains. The report revealed by improving social performance by as little as 10 percent, the brands analyzed in the study could realize a two percent increase in sales and large improvements in profit margins.
"There are a number of quite important implications of this study for marketers," said Ed Keller, CEO at Engagement Labs. "Underestimating or ignoring the impact of social influence will negatively impact a brand's bottom line.
Social media conversation has a measurable business impact. Our analytics also demonstrate that social influences go well beyond the screen. Consumers are making purchasing decisions at the water cooler, on dates and at home with family, as well as chatting with friends on Twitter and other social networks."
Mr. Keller concluded, "We now have concrete proof that by understanding what consumers are saying, both online and offline, and how media buys impact those conversations, marketers can optimize their marketing spend and make their dollars work even harder."
Digital marketing executive with proven experience in all aspects of search engine optimization (SEO), performance-based advertising, consumer-generated/social media, email marketing, lead generation, Web design, usability, and analytics. - 20-year Internet marketing veteran, currently serving as the Digital Marketing Campaign Manager at Antenna Group (formerly Chicago Digital). - Former Editor-In-Chief of Website Magazine, and a regular speaker on Web technology digital marketing strategy - Author of several books on digital marketing Including Web 360: The Fundamentals of Web Success; Affiliate 360: The Fundamentals of Performance Marketing; Domains 360: The Fundamentals of Buying & Selling Domain Names, and SEO 360: The Fundamentals of Search Engine Optimization.