It is no secret that Pinterest and other social commerce sites have begun to dial in the commerce equation. These sites (so far) have managed to balance facilitating product discovery and purchase capabilities with users' desires to entertain and educate themselves without feeling like they are in a marketplace.
Search Meets Social = Commerce
The combination of Search and Social is redefining the way marketers are allocating their ad budgets. According to Jared Belsky, President, 360i, “We see Search and Social as a 24 hour real-time consumer focus group that helps us stay on top of what consumers care about for our brands. The Search and Social Commerce toolset helps us get deeper insights and more effectively scale more tailored consumer experiences wherever they searching for and discovering products”
Although Search and Social both matter,
Although still accounting for the largest click share at 39%, this represents a drop of 13% from the prior year. In contrast, social networking sites drove a record number of clicks, up 20% over the prior year. Clearly there is a shift occurring in users' behavior, as social networks continue to hone their product discovery and purchase capabilities.
As noted in this recent Wall Street Journal article,
In order to drill down on how entrepreneurs can leverage social commerce sites without alienating their potential customers, I spoke with industry expert Albert Wilson, who heads up Affiliate and Marketplaces for Deckers Outdoor Corporation.
John Greathouse: Albert, thanks for taking the time to chat. Social Media has been traditionally seen as branding medium, but that seems to be shifting this year. How do you see Brand and Commerce coinciding on social sites such as Pinterest? How would you advise marketing teams which split out brand and commerce?
Albert Wilson: "It’s very exciting that social sites are giving marketers tools to monetize this traffic and engagement, which historically has been more about branding and awareness. It also gives marketers an opportunity to engage potential customers early on in the discovery phase, and track this journey to a conversion. From looking at attribution, I feel that at this point it still makes sense to view social more as branding, and less as direct response marketing.
It’s very challenging to quantify the commerce value of a Pin or Repin, because there’s branding value beyond traditional last-click attribution. However, this isn’t to say that it’s not possible to turn social into a true direct response marketing channel. I’ve seen some smaller retailers execute very innovative strategies, such as posting items for sale on Instagram to the first person who emails them. As with most things ecommerce related, splitting out branding and commerce is generally unique to each case."
Greathouse: DataPop & Kenshoo recently released a study that highlights the potential opportunities on sites like Pinterest and Polyvore. As we head into the holiday budgeting season, what are the opportunities and challenges you see in these, and similar, social channels? <Note: I am an investor in DataPop via Rincon Venture Partners>
Wilson: "I believe the underlying issue is still how to monetize social channels. The DataPop Kenshoo study does a great job of identifying some low-hanging fruit, (for instance) simply adding products onto social commerce can be a great start. Another great insight from the study builds on the importance of relevance, regardless of your brand or direct response goals, to align with how consumers are searching. It’s critical to focus on providing high-quality content in your social commerce posts to ensure your product Pins get discovered by highly engaged consumers. However, it most likely still won’t provide revenue or a return on ad spend seen in traditional direct response channels, such as paid search. The attribution of social creates both a challenge and an opportunity – measuring it differently can be challenging to implement and get buy-in, but it creates opportunities to invest in these upper funnel activities which ultimately can drive revenue."
Greathouse: Given your deep background in digital marketing, what tips do you have for marketers who haven't leveraged social commerce sites. What approach should they be thinking about as they test out Pinterest, Polyvore, Toplist and similar sites?
Wilson: "Early on in my career, before Deckers, I was told, 'Impressions and Likes don’t pay the bills.' This may be true, but traditional direct response doesn’t provide the opportunities that social does for engaging with a potential customer. While there is value in separating out marketing channels on a last-click attribution basis, I believe it’s far more important to understand the customer journey and the interplay of all marketing channels. For instance, DataPop has a great tool that provides insights around customer engagement, which is extremely valuable for actionable insights into how customers are interacting with our brands. So, as marketers test out social sites, measuring engagement KPIs and re-evaluating attribution are important to gauge the success of these activities."
Greathouse: If you woke up and were suddenly the CEO of Pinterest, what changes would you initiate to make it a more effective marketing platform?
Wilson: "I’m not sure if making it a more effective marketing platform would alienate its user base, but there are definitely some opportunities. The launch of Promoted Pins is very exciting, so it will be interesting to see how they roll that out. Product Pins could be improved with the addition of interactivity, such as 3d image views or switching colors. I also believe there’s also a lot of opportunity to turn it into a shopping platform by adding a cart feature, although most users don’t use Pinterest for shopping. It’s tough to balance growth, adding new features, and improving the user experience, and I’m sure Pinterest will do a great job of making it a more effective marketing platform at a pace that is comfortable to their users."
Greathouse: One obvious trend in social selling is the incorporation of user-ratings in ads, as Google recently announced in homage to Amazon. Predicting the future is never easy, but in what ways will the "hot" social commerce sites differ from today's offerings three years from now?
Wilson: "I feel that it’s very challenging for a company that has a great core product to expand into other areas. Google is great at search, yet their G+ social network wasn’t the most successful. Today, we have great players in the social space, marketing space, and commerce space. It would be very challenging for any one of the great companies today to excel in all spaces while keeping their user base, so I believe we will see a lot of startups trying to fill this niche. Vinted is a great example of a social commerce site trying something new, and I’m looking forward to checking out similar sites in the future."
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