Podcast 005 – Social Marketing Is a Waste of Time (For Product Based Businesses)

I’ve suspected it for a long time, the evidence is now out there to show that Social Marketing for product based businesses, is a waste of time.

We’ll get to the details that back this claim up in a few moments, in this Podcast, Myself, Dave and our guest this week John Hayes discuss this topic and as John’s background is also email marketing perfectly suited to make the comparison between Social Marketing and Email Marketing.


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The Evidence

Forrester ResearchForrester, probably the world’s most credible research agency, conducted a study in 2011 called “The Purchase Path Of Online Buyers In 2012” in conjunction with one of eBay’s newly acquired companies “GSI Commerce” and it’s digital agency “True Action” to to evaluate how shoppers touched various marketing touchpoints, such as paid search and email, prior to completing a transaction online.

Let’s run through a few of the findings in the report:

  • Barely 1% of 77,000 transactions could be traced back to social links
  • Email has usually been an influencing factor in the transaction
  • 33% of new customers and 48% of repeat customers coming from multiple touch points
  • By far the biggest driver for purchases online are email marketing and search
  • 30% of transactions started with a click from an email marketing campaign
  • Email marketing is by far the most important channel for repeat customers
  • New buyers looking for a specific product or brand are more receptive to paid search than your loyal customers
  • Paid & organic search led to 39% of transactions from new customers
  • Still a significant proportion of buyer visits are driven by buyers typing in the websites URL
  • Directly typing the companies URL was found to influence a surprising 30% of transactions

Basically the study found that the impact on Social Marketing on actual sales was almost negligible.

Before Jumping on the Evidence

I chose John to join us on this Podcast for his experience with Email Marketing and yes this Podcast is going to be biased towards email marketing and iContact who John mentions in the discussion. This is because I wanted to give you an option that you can leverage immediately and for me that is Email Marketing.

I’m sure some of you reading this are going to be horrified by the study findings, as we’re all being told relentlessly that “we should be doing social marketing“, “we should be on Twitter and we should be creating Facebook pages and so on…” and there are a lot of companies that are purely focused in Social Marketing that want your money and want to give you a design and a service.

To be clear here, such offerings are beneficial to businesses in the right situations, John points this out too, there are other reasons to consider Social Marketing key to your business and even for me personally (as you’re likely to have found this article on Twitter) these are vitally important and we’ll cover those shortly, but as this report is showing for transactional volume, Social Media capability in the study for delivering transaction results, is tiny when compared to other methods of marketing.

When Should You Consider Social Marketing?

Getting the Marketing Mix RightJohn mentions in the Podcast a “mix” and this is simply referring to a “Marketing Mix” and he’s hit the nail on the head, with this study we’re able to say that Social Marketing isn’t carrying the weight that some would like you to think it does.

And instead for you to consider this as a one part of your approach to marketing your business and if I use the simple metaphor of a cake mix, that it’s likely that your balance through the marketing we’re all receiving is weighing too heavily towards the chocolate icing, imagine a cake made entirely of icing, ewww. So instead let’s change the mix and compare it to a simple cake mix:

How to Make a Cake / How to Have a Good Marketing Mix

  • 4oz / 120g butter
    This is your eBay sales
  • 4oz / 120g white sugar
    This is your Amazon sales
  • 4oz / 120g white self raising flour
    This is your website sales & other sales such as affiliates, PPC, CSE’s and so on…
  • 2 eggs
    This is your email marketing, that binds everything together
  • 1 tablespoon of milk
    This is what you’re up to on Social Marketing

Now I’m not a cook but milk is added to create a denser cake through its fat content. Now let’s think of this fat as being the reach that social has which is huge.

We’re adding it all in the right proportions and that is our point, as we discuss, gaining new customers is very costly and retaining them is generally of the highest priority and while Social Marketing can help this, Social is currently getting too much weighting when from shown in the study, the transactional volume is still coming from the traditional channels.

While I have a special note to the future of eCommerce and Social in the summary, right now Social should come at the end of the mix, when binding everything together as the high fat dose to give it the depth and exposure for the businesses.

Not to discredit social completely, there numerous are reasons why a company would want to use Social Marketing as part of their businesses and we’re not saying that you shouldn’t be using social marketing at all, just not in the weightings that some would consider you should be.

So what are some of the reasons why you should consider social marketing?

  1. Brand exposure
  2. Instant one on one contact with customers & Customer Service
  3. The potential reach of the internet world
  4. To be see as “human”
  5. To give evidence / proof to buyers that you are here and real
  6. To build influence
  7. With Google Plus specifically there is a search weighting applied to it

Note: I did also read a few days ago “because your competition is using social media”, for me that is a lame reason and I’m not including it.

I asked one of the businesses I work with what they thought of Social Media, the response back was interesting:

“We find it so different being able to give instant responses, sometimes lacking in emails”.

I didn’t see what he meant to begin with, as surely email support is the same thing, instant? However what he had inadvertently picked up upon is that social media for him was the most pleasing for both him and his team was when he was able to publicly demonstrate the excellent customer support that his team offers in a public environment.

I asked John & Dave the question

“Maybe why eBay and Amazon may need to think about publicly showing the response times to buyer/seller questions beyond just the detailed seller ratings and make a more comprehensive picture and clearer picture for both sellers and buyers alike?”

What John came back was with excellent as it’s a nice cross over between owning the content of the interactions and being completely transparent with customers, you can see for yourself and their latest stats from customer services here http://www.icontact.com/resources/customer-satisfaction.


Let’s make no-bones-about it, I’m absolutely saying that Social Marketing for product based businesses is not worth the hype that its being given and that out first point of call for expanding your business should not be social at all.

But what can you use instead? We can’t just say that and give you no option, that would be cruel so our suggested first point of call be as a viable alternative to social is Email marketing, for which we’ll take a closer look at now.

Why Email Marketing as an Alternative

We’re not just advocating using just iContact, John works for Vocus and I felt he by far the best person to speak to on this topic, proven by his experience and his input in this Podcast, there are many options for Email Marketing tools and I’ve included as many options that came to mind at the bottom of this section.

Having John as part of the Podcast was a huge help for us as John pointed us in the direction of this info-graphic from iContact that I’ve included below. It’s rather large and you can see the full version here (opens in a new window).

How effective is email marketing

What this info-graphic points out to us is that Email Marketing is not dead and infact it’s live and kicking and according the Forrester’s study, it’s kicking serious butt with “30% of transactions started with a click from an email marketing campaign”.

While the info-graphic give us a founding in the reach of Email Marketing, what I want to focus on here is the effectiveness and I’ve cut out several pieces to show you.

Dave while researching for this Podcast also found an interesting article and infographic from June this year that shows that for the first time that mobile devices combined are now on par with desktop email openings, that is just amazing!

The full info-graphic is here http://litmus.com/blog/email-client-market-share-stats-infographic-june-2012 and we’ve included a cut out of the cross over point we discuss in the Podcast below:

Mobile Email Open rates Now Take the Lead!

Email marketing is all of these and a lot more too:

  • Fully scalable
  • Highly personal
  • Extremely clear on what is working and what is not
  • Almost 100% reportable
  • Easy to split test and improve
  • Very easy to do
  • Its cheap
  • Widely recognised as the most profitable form of online marketing today

And ultimately it works!

Email Marketing Companies

I hope this gives you an insight into why Email Marketing could be lethal for your business, but to cover Email Marketing to the level that it deserves would need a couple of articles in a series to cover it back to back and we can’t do it the justice it deserves here.

I’m not going to cover the ins-and-outs of each of them here, but here are several options for you to choose from and you can find several of these covered in detail in the email marketing part of the solutions directory on this very site.

I also want to point out, none of these are affiliate links. That is I gain no commissions for referring you, to show that I am not biased here on this topic, it is genuinely what I feel you should be doing as a product based business owner to be doing right now instead of worrying about the hype behind Social Marketing.

About John Hayes

You can put a face to the voice from the Podcast and John is over to the left.

Not only is John our guest in this Podcast, but also he’s the author of an Amazing book that both myself and Dave have read called “Becoming THE Expert” which shows you how to use “Thought Leadership Management” to excel in your chosen field.

You can buy John’s book on Amazon or in the iBookStore and direct links can be found on the publishers website here: http://www.brightwordpublishing.com/products/view/865794/Becoming-THE-Expert/John-W.-Hayes/

In Summary

Personally I have been looking for this evidence for a long time, I feel that for small businesses that sell products online, that social marketing is currently a complete distraction and given the choice between Social Marketing of any-form and other methods such as PPC and as we’ve covered heavily in Podcast and supporting article, Email that there are many other options that can delivery tangible results more easily, for less money and are almost 100% traceable to the final result, the transaction.

Now before some new-age nut job writes us off as “traditionals”, I’d like to point out is the eCommerce arena that we play in is changing and while right now Social may not be worthy of all the hype it’s been receiving, as more and more people start to leverage it and discover how to use these still very new channels to market with, we are going to see the potential power of social influence on transactions increase.

So right now Social may-be-not for product based businesses, but wind us forwards 5 years, I think we’ll be seeing unique uses and unique ways of leveraging social marketing as stand alone businesses to drive transactions.

Now that we’ve covered our point of views, what do you think?
(Let us know in the comments section below) 

Sources/Credits: Image | Study | Views | Image

24 replies
  1. NiteShift
    NiteShift says:

    Brilliant podcast guys, social is very labour intensive but we have seen ‘some’ return as we offer a 10% discount code to like our page. We then use it to give immediate marketing mainly showing new products plus where we post our blogs to as our products are very visual. Agree with what Matt says it also helps you to trust the company and you can see customer feedback. We have also had a complaint on our Facebook which we responded to publicly (we had sent the customer an e-mail but she had missed it). We’ve not done any e-mail marketing but after listening to this I will now!!

  2. Henry
    Henry says:

    Interesting post. In fact it was one of the reasons i left Facebook, being nailed with adverts all the time.

    @CJ – couldnt agree more. Advice on email marketing would be great.

    • proetus
      proetus says:

      To be absolutely honest I think if you use any email addresses gained from past sales on ebay, it is a very dangerous game to play whilst I also completely respect eBay/paypal for sharing that information, unlike Amazon eBay is not a retailer and so we are not in competition and my personal opinion is using that information is an abuse of trust.

      Just from a personal perspective as an online shopper aswell as retailer many of my trusted sellers are also instantly marked as dangerous and who knows maybe many of their well intentioned emails are filtered out before I even receive them purely because their well intentioned emails are marked as spam by so many customers.

      I appreciate that I am only a small 100% online business and with ought the help of eBay and Amazon would never have had the opportunity to even start dreaming big let alone try a complete new career, the hard truth is the only brand that customers are really interested in is eBay or Amazon not particular individual shop brands so time spent promoting personal sites should be more of a hobby.

      In regards to social media … yes it most definitely works I cannot mention any names but last year I got a personal thank you tweeted to me with a link to my eBay item, sadly I only had 10 in stock but they all sold within hours that in its self did cause me some panic until I realised why :)

      • msfb
        msfb says:

        I always thought that the first email would be more of a ‘Please subscribe’ email – no one wants to risk their ebay account by spamming customers!

        That way you can see who decided to sign up and agree to receive emails and simply use all those going forward and avoid spamming anyone who doesn’t want them (if they say no or don’t reply).

        If even a few sign up it’s better than nothing.

        Also – you can offer an incentive to sign up in the first email, ie: 10% discount for all who sign up or something.

  3. CJ
    CJ says:

    Agree, have always felt trying to ram products down people’s throats on FB or Twitter is a waste of time and money. Glad I’ve been proven right!

    I have a whole load of email addresses saved up over the past 2 years from my eBay sales. I know exactly what they bought and where they live etc etc. I just need someone to guide me on the best way to use this information for my first email marketing campaign so as to turn as many of those as possible into subscribers or get them to buy again.

    Maybe you and/or John could write a guide for a blog post sometime?

      • Dave
        Dave says:

        Does anyone know the legalities of using eBay emails? I have tens of thousands (probably hundreds of thousands) in my paypal records and I’ve often thought how lucrative they could be, but I was always put off because it seems so spammy.

    • dave p
      dave p says:

      I would also like to add my voice to request an article on this. I had always assumed that it was illegal to use the email addresses from ebay unless they subscribed to your mailing list though?

      • Matthew Ogborne
        Matthew Ogborne says:

        Hola Dave,

        I’m pretty sure it is and as Dave above points out, it is soo spammy, so we need a strategy to convert them.

        Definitely noted and in the todo list.


Trackbacks & Pingbacks

  1. […] may remember John from two other Podcast’s we did together, “Social Marketing Is a Waste of Time” & also we discussed one of the books he published “Becoming THE Expert“, if […]

  2. […] on November 2, 2012A few Podcasts ago we were joined by John Hayes to discuss if Social Marketing Is a Waste of Time (For Product Based Businesses).  In that Podcast we touched upon John’s book “Becoming The Expert” and myself […]

  3. […] week I was invited to discuss this with Matt and Andy on the Last Drop of Ink Podcast and it raised some interesting questions from marketplace (i.e. eBay and Amazon) […]

  4. […] week I was invited to discuss this with Matt and Andy on the Last Drop of Ink Podcast and it raised some interesting questions from marketplace (i.e. eBay and Amazon) […]

  5. @paulfeakins says:

    Podcast 005 – Social Marketing Is a Waste of Time (For Product Based Businesses) http://t.co/mDFBzZf8

  6. RT @matthewogborne: 30% of transactions started with a click from an #email http://t.co/vHqKRxDB <=Why #social is not all it’s cracke …

  7. Lunchtime listening – Social Marketing Is a Waste of Time (For Product Based Businesses)? Podcast featuring @iContact http://t.co/SUjqosBl

  8. Lunchtime listening – Social Marketing Is a Waste of Time (For Product Based Businesses)? Podcast featuring @iContact http://t.co/SUjqosBl

  9. @ArthurHale says:

    RT @matthewogborne: RT @matthewogborne: Barely 1% of 77,000 transactions could be traced back to #social #marketing links http://t.co/vHqKRxDB

  10. @SEO_Exp says:

    Podcast 005 – Social Marketing Is a Waste of Time (For Product … http://t.co/3q3tAhDq

  11. @day2dayebay says:

    Podcast 005 – Social Marketing Is a Waste of Time (For Product Based Businesses): I’ve suspected … http://t.co/MEwG7gLX @lastdropofink

  12. RT @lastdropofink: RT @lastdropofink: A big thank you! to @john_w_hayes for joining us to discuss & compare #Social & #Email marketing in today’s …

  13. Podcast 005 – Social Marketing Is a Waste of Time (For Product Based Businesses) http://t.co/8x2ok88I via @lastdropofink

  14. @matthewogborne that’s quite an introduction – thanks for inviting me to speak about #emailmarketing and @icontact – http://t.co/SUjqosBl

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