Is Social Media Bad for Business?

There’s always been a big hype about social media. Posting tweets, updating statuses, getting likes and followers. But how valuable are all those activities for the bottom line?

A recent study by Custora measured the purchasing habits of 72 million online shoppers (in the USA) and found that customers who discovered an online retailer via organic search spent more money and shopped more frequently than customers who came from other channels, like Facebook or Twitter.

Surprisingly, in 2013, Facebook and Twitter were collectively responsible for less than one percent of customer acquisitions.

Obviously this doesn’t mean you should stop doing social media, build your brand, get likes and engage with people. But depending on how big your marketing budget is, it may be better spent on SEO or Search Marketing (My personal preference at the moment of writing this would be Google Adwords). Once you exhaust the amount of traffic you can get from those channels it may be worth while to then invest more into social media.

The above mentioned report only measured the last contact people had before they purchased. So they may have heard about the brand or website through other channels first. Personally I wouldn’t build a case for social media around that fact, but I do want to mention it.

The web has changed dramatically in the last few years, and I am sure social media will become more and more influential in how people buy or find businesses online. But for now this report confirms exactly what I have found so far. You get the best ROI by doing educated Search Engine Marketing. But watch out, it all might change tomorrow thanks to Facebook and Google+