- In past four years, online retailers have quadrupled rate of customers acquired through e-mail
- By contrast, Facebook over that same period barely registers as a way to make a sale
- Report: By far the most popular way to get customers was "organic search"
- Report analyzed data from 72 million customers shopping on 86 different sites
In 2013, no company can expect to be taken seriously if it's not on Facebook or Twitter. An endless stream (no pun intended) of advice from marketing consultants warns businesses that they need to "get" social or risk becoming like companies a century ago that didn't think they needed telephones.
Despite the hype that inevitably clings to the newfangled, however, it's relatively antique tech that appears to be far more important for selling stuff online.
A new report from marketing data outfit Custora found that over the past four years, online retailers have quadrupled the rate of customers acquired through e-mail to nearly 7 percent.
Facebook over that same period barely registers as a way to make a sale, and the tiny percentage of people who do connect and buy over Facebook has stayed flat. Twitter, meanwhile, doesn't register at all.
By far the most popular way to get customers was "organic search," according to the report, followed by "cost per click" ads (in both cases, read: Google).
Custora came up with its figures by analyzing data from 72 million customers shopping on 86 different retailer sites. They tracked where customers were clicking from (e-mail, Twitter, Google, etc.) and what and how much they bought, not just on that visit but for the next two years.
Over those two years, Custora found that customers who came to retailers from search were more than 50 percent more valuable than average. In other words, they were more likely to shop more and spend more. E-mail customers were nearly 11 percent more valuable than average. Facebook customers were just about average. Twitter customers, meanwhile, were 23 percent less valuable than average during the two years following that first click.
"I wouldn't necessarily say Twitter is inherently a bad way to do (online marketing), but we haven't seen a lot of good Twitter strategies right now," says Aaron Goodman, Custora's lead data scientist. He says Twitter marketing campaigns right now tend to rely on the chancy likelihood that someone will run across a deal when they dip into their feed. Even if they do see it, within seconds it disappears.
E-mail, on the other hand, has a certain unfair advantage in that shoppers getting the e-mails have already given up their addresses to a site, suggesting they already have some prior relationship with that retailer. Still, despite the avalanche of spam we all get, it's easy to see how the staying power and greater potential for personalization of a medium without a 140-character limit gives e-mail distinct advantages.
Custora's findings don't bode especially well for social media business models, especially Twitter. Of course, ads on Facebook and Twitter don't have to lead to immediate clicks to have an impact. They still have the potential to raise ambient awareness. Yet Custora found that Google's ads, by contrast, do lead not only to clicks but to purchases—the holy grail of "conversion."
To be fair, Google had a roughly 10-year head start to turn search into sales. It's hard to imagine that in a decade that social media won't be a more important channel for selling stuff. Already its "product cards" provide a very direct way for Twitter to act as a storefront.
Businesses probably shouldn't abandon social just yet. But if they had to pick, that old-timey mailing list may trump tweets for a long time to come.