If social media is no good for ecommerce, is social commerce DoA?

Forrester and GSI just released a study by star analyst Sucharita Mulpuru showing social networks are not effective channels for ecommerce.  The oldies – email and search marketing – perform far better.  (Available free on the GSI website here.  Data cited in Mashable here.)  In a universe of endless, self-promotional, vendor-funded studies, this one should get more than it’s share of your attention because the sponsors gain nothing (but credibility) from spreading these conclusions.

In the face of this withering evidence, we think it’s a good moment to review the distinction between social media marketing and social commerce.

• Social media marketing is about delivering a commercial message on social media sites.  It is a hub-and-spoke model of communication where the brand is the hub and customers/prospects are at the end of each spoke.  It’s getting people to Like your fan page or to Follow you so they’ll accept your messages in their news feed.  Social media gurus say you must “listen” carefully and that your tone when you speak must be “authentic”, advice that inherently assumes the dialog is between YOU and THEM.  Social media marketing is comfortable to most organizations because it’s basically the old stuff, just in a new place.
• Social commerce is about facilitating interaction between your customers and prospect about you.  You are not at the hub of the network; rather you provide tools that encourage discussion amongst the members (and prospective members) of your community.  That discussion about you is happening anyway, but usually only in response to extreme experiences – positive and negative.  But if you lower the barriers by providing the right tools, you can greatly increase the amount of discussion about you (and improve the tone, too).  And that leads to increased sales.  These tools can run on your own ecommerce site, on social networks, or on content sites across the web.

The Forrester / GSI study takes an ax to social media marketing, but not to social commerce.  I like the analogy Fiona Dias of GSI uses to explain why social media marketing doesn’t work: just because lots of people go to church doesn’t mean church is the right place to advertise.  Similarly, just because lots of people are on Facebook doesn’t mean Facebook is the right place to deliver your commercial message.  Context matters.  And while the Facebook context may not be right for brands to deliver their commercial messages, it is definitely a good place for brands to facilitate discussion between members of their community.

We think most brands should reconsider their social strategies – and especially their Facebook presence – in light of these findings.  In particular, they should stop using their Facebook presence as just an extension of their existing brand or ecommerce website and instead think of it as a place to host discussion among the members of their community.  They should also think about how to add tools to their ecommerce sites that facilitate dialog between prospects and customers.  And finally they should think about how to tie all of these community presences together so that dialog in one location is visible on all.

That’s social commerce, and it’s alive and growing.