making money

Social network commerce and referrals: Rubbish in, rubbish out?

April 11, 2011 By Dan Thornton

Two recent studies into social networking referrals and Facebook ecommerce left me slightly perplexed until the obvious answer smacked me in the face.

The first was a study by ForeSee Results, which showed that 1% of website referrals came direct from a social networking url, and that’s after a survey of 188 websites and over 295,000 responses from individual consumers. The networks included ranged from Facebook and Twitter to the likes of Foursquare, Scribd and Meetup. Without being able to dig into the study, there are some initial questions (Inclusion of Twitter clients, and wouldn’t Foursquare and Meetup be primarily for offline referrals?)

The second was a Forrester report into Facebook Ecommerce, which looked into 24 companies, with 7% citing social networks as one of their most effective sources of customers (90% cited paid search marketing). And a 1% click through rate compared to an 11% rate for email marketing. 24 companies is a pretty small sample group, but hey-ho….

Why am I perplexed?

There are a lot of examples of sites revealing their referral figures from Facebook and Twitter (and the social networks themselves are keen to highlight how much traffic they drive). Those figures are always a lot higher than 1% – and my own sites back that up consistently since they first launched (Obviously I can’t reference client sites or previous employers…). Some other social networks have also made decent contributions to site traffic (e.g. Stumbleupon, Reddit, and several others), and some have never appeared to my knowledge (I’ve yet to see someone appear on this blog via Foursquare for obvious reasons).

So besides the aggregation problem – why is that 1% number so low?

And given 600 million potential consumers on Facebook with an integral sharing and recommendation mechanism, why aren’t more companies able to convert customers? Email marketing will generally perform well as potential customers have actively signed up for information and offers, and 1% is still better than many advertising campaigns can achieve, but surely it must be possible to engage fans and potential customers in a more effective way…

Rubbish in, rubbish out?

I haven’t had access to either survey, but certainly the publicly-available summaries and reports seem to have skipped a vital question – how many of the websites and retails involved are actually doing a decent job of using social networks? Were all the websites involved actively updating, providing decent content, responding, providing good offers? Or were they like the majority of companies on social networks and generally doing an appalling job with a half-arsed attempt at updating once a month with some generic PR piece?

How many companies actually have a good integrated Facebook commerce offering? It seems as if Zynga have done pretty well out of Facebook commerce, and they aren’t alone, so why aren’t retailers capitalising? One obvious reason is that having an integrated Facebook shop is still rare enough to be really newsworthy – and although Facebook credits are available at the supermarket checkout, they’re still gaining acceptance as a retail currency. How many people who want to make a purchase will have a credit card available for an Amazon payment, or possibly a Paypal account, but would be slightly irritated by having to go and convert their cash into Facebook currency first? Or are finding that the brands they want to spend with currently just refer them to their traditional website, giving that extra click of delay and potential for a consumer to get distracted, have doubts, or just give up for some reason?

So what are we meant to believe when it comes to social networks?

The easiest answer is to believe your own experience and stats. Particularly if you’re a small company, you’ll want to focus on 1 or 2 places, and spend a decent amount of time using them before you can build up an accurate picture of whether they’re driving traffic or business.Use your gut feeling for what is likely to be a good outlet – you probably won’t be far wrong, and you can find quite a lot of info online to help back up your initial instincts.

For instance, I’d advise Facebook for general B2C traffic, and would suggest Twitter tends to be lower for most consumer sites, but contributes more in spreading information to other locations. Whilst for B2B, LinkedIn shouldn’t be underestimated, and the likes of Scribd, Slideshare etc all come into action.

The other answer could be to speak to someone with experience of similar campaigns for similar specific businesses – if you’re looking for advice on traffic referrals, look for an agency or consultant who can reference the numbers they’ve achieved, and can talk about how they did it, how they measured it, what worked, and importantly, what didn’t.

For instance, Youtube tends to drive very little traffic, unless you approach it in a very specific way and use specific mechanisms to encourage people to visit your site rather than the next related video of skateboarding kittens.

And always question surveys and reports which claim to provide a broad overview of what happens on the internet – the broader the information, the less use it tends to be. Measurement always trumps research – the important thing is to set up the measurement correctly!

All that Twitters is not gold for Twitturly

November 18, 2009 By Dan Thornton

For a while it seemed as if building a third-party application for Twitter was a route to instant fortune (as were Facebook apps before it, and iPhone apps after it). But judging by the eventual sale of Twitter link tracker and aggregator Twitturly, it appears that bubble may now have burst.

Since launching in April 2008, rivals such as Tweetmeme and Topsy have joined the Twitter aggregator space – and when founder Joel Strellner put the site up for auction, just 5 bids came in, with a final price of ‘no more than $8,500’ (HT Techcrunch).

Having said that, Strellner has moved onto other things, leaving the site with a Google PR of 6, Alexa ranking of 40,106, and most importantly, only around 1000 Unique Users per day. And less than 1000 visitors per day definitely doesn’t get the big bucks.

The only thing I can’t understand is why there wasn’t more effort to boost PR and visitor numbers immediately prior to the sale? Then again, the auction details reveal Strellner is working full time, didn’t want to invest more in costs (the EC2 server costs were apparently around $3k per month), and has also recently found his free time taken away by becoming a father (Something which I can totally understand!)

It will be interesting to see whether the new owner can make use of the 622GB data, the agreement to access the Summize (Twitter Search) API an unlimited amount, and a site which claimed 5000 UUs per day.

Listorious is quick off the mark to find best Twitter Lists

October 30, 2009 By Dan Thornton

With about half of Twitter users able to access Twitter Lists as they’re rolled out to everyone, independant Twitter list directory Listorious has been quick to launch and offer curated lists on a range of topics.

It’s interesting to see whether the relatively peer-led recommendation of Twitter lists will displace directories of individual users grouped by category such as WeFollow and Twellow. Obviously there are concerns about both the follower-inflation that everyone has seen from the Suggested User List presented to new users, as well as individuals worried about being pigeon-holed and lists becoming reciprocal favours rather than recommendations.

It’s also likely to diminish the value of the longstanding Twitter tradition of #followfriday.

From a business point of view it makes utter sense for Twitter to have some input/control of listing users – all the examples above have been relatively successful. What’s the betting that an option to promote a specific list could be in the monetisation plans? Spend some cash and your list could be promoted to everyone, or possibly replace the Suggested User List for a period of time?

Suddenly they’d have a route for grabbing sums like the $250,000 offered earlier this year by Jason Calacanis, without it being flagged up as obvious in a list of just 20 or so people.

And obviously list pages themselves offer individual sponsorship/promotional oppportunities…

As a user of Twitter, I’m undecided whether lists will be a positive thing on balance, but as a Twitter observer it’s one of the biggest steps they’ve made in a long time towards making money.

Some real proof of social media transactional revenue

February 23, 2009 By Dan Thornton

Respected Venture Capitalist Fred Wilson often talks about the action taking place in the comments of his blog.

So I’m surprised more people haven’t picked up and reposted his comment from a post at the end of January.

If it’s a bit too small – Fred is revealing Twitter is the 3rd biggest referrer of transactional visits to handmade marketplace Etsy, with Flickr at number 2, and Facebook at number 4.

And Etsy is generating over $1 million a month in revenue, with $100 million worth of goods sold in 2008.

Now this might not convince everyone – after all, Etsy sales are by a large number of individual and small retailers who will be promoting their items individuals through Flickr, Twitter and Facebook – and the scale is the aggregate of those referrals – the ‘Long Tail‘, if you will!

So essentially there are 100s, if not 1000s of people handling social media marketing and customer service for their products, which doesn’t tackle the scale issue of large companies changing the way they do business, and utlising social media.

But there were 300,000 people in the California Gold Rush, and noone continued to deny there was gold in those hills.

Am I evil? The dark side of the web…

July 14, 2008 By Dan Thornton

It’s apparently easy to be seduced by the dark side when it comes to blogging, and I never even realised it had happened.

At some point, an arbitrary line was drawn as a hang up from traditional media. The great and good subconsciously set the ethics of blogging around ‘quality’ content, a lack of advertising, and denying that anyone ever checks the rank of their blog, or sometimes submits their own content to Digg or Stumbleupon. There is a slight get-out clause if you’re already well established as an A, or possibly B-list member of the blogosphere, but essentially you have the basis of the monastic blogging community. Just keep writing open, honest, quality content and relax as the world discovers you.

Sat on the other side of the equation are the blogs which offer readers the hope of making money online, or getting to the top of whichever ranking you like using some simple tools, and by downloading an e-book on the best affiliate schemes. They love to self-promote, follow 1000s on Twitter, and are happy to recommend affiliate schemes they’ve just signed up for. They don’t publish a lot of original content, and tend to reuse ideas from more legitimate sites like Problogger.net.

It’s a simple guide, and easy to believe in. It’s a shame it’s wrong.

For starters, with 140 million + blogs, it’s perfectly viable to publish quality content for months without anyone stumbling across it. And this monastical approach can easily lead to someone giving up, or looking for ways to self-promote themselves to at least get some eyeballs onto their blog, even if it leads to a 99% bounce rate. Increased competition in every niche means it’s ever harder to be the main tech blog, or the first mommy to write about raising a child.

Even harder to accept is the idea that others might have a different idea of what makes for quality – and that our idea of a spammy blog might actually be of value to someone who hasn’t come across the original source of the information, or might have never had the chance to attract readers without a self-submitted stumble once in a while.

That’s the hardest to accept because we’ve been taught to seek out the accepted levels of quality since childhood. We were shown Shakespeare and Dickens to aspire to, we see broadsheets as superior to the tabloids, and essays and dissertations require a minimum length to be submitted. And we act shocked when someone reverts to Anglo-Saxon.

But the truth of the matter is that the quality of a piece of work, whether blog, newspaper, or verbal tirade, is down to the individual looking at it. It’s not about an expert author carefully crafting literature – it becomes about whether it confers a value to the individual. To insert a suitably literary quote: “the death of the author is the birth of the reader.”

If we really accept that modern publishing is solely about the needs of the individual who reads and interacts with it, then we should be happy that every part of the spectrum is represented – from the ad-free academic discussing topics with other scholars, to the make money blogs offering the same get rich schemes that appear on flyers on lamposts and through our letterboxes. And we should leave it to the end users to decide which work provides them with entertainment or value, even if we do placate ourselves by perhaps offering some type of warning for scams and pyramid schemes *. Or we rank down those works we disagree with via the same voting mechanisms we use to promote and share content we value and feel is relevant to those around us.

It’s why those of us fortunate enough to be gainfully employed in roles which allow us the indulgence of blogging and social networking for work as well as pleasure should stop looking down on those who may be looking at blogging as a mechanism for fame and reward to change their lives in some way.

It’s why, when it comes to money making spam blogs: “I disapprove of what you say, but I will defend to the death your right to say it,”

I’m looking forward to the comment which will hopefully follow. Don’t forget to Digg, Stumble, and even print this post and send it to all your friends!

*Incidentally, if any blog or website offers you the chance to make money without much effort, or with a simple automated programme, the odds are pretty high it’s a scam. Trust me. If you’re seriously looking for ways to make money online, I”d advise only listening to those who are open and honest about the fact it takes a lot of hard work and luck, as it does anywhere else!

(Cheers to @snowcialmedia for the prompt to post…it might not have been quite what you had in mind!)