Research Shows Social Media Marketing has Strong Impact on Retail Sales

Meredith Sparrow
By: Meredith Sparrow | October 21st, 2011

Social Media marketing has fought for and won a seat at the marketing table. It’s no longer an add-on or an experimental component of the marketing mix, and many companies are investing a significant chunk of their marketing budget in social media.

Now that social media marketing is established, the million dollar question is “How Does Social Media Marketing Drive Sales?” Focusing on correlated ROI, Ogilvy has analyzed the effect of social media on sales.

This week Ogilvy published a new study that shows the impact of social media marketing on retail sales. The study used five Quick Service Restaurants (i.e., fast food chains) and analyzed the correlation between social media exposure and changes in purchase behavior before and after the social media interaction. The results clearly show how social media marketing leads to more spending and consumption.

Multi-Channel Integration Boosts Spend and Consumption

Consumers who were exposed to social media marketing in addition to PR, OOH (out-of-home) marketing and TV advertising spent more money and consumed more food from the restaurants. The results show a sizable increase in sales:

  • People who were exposed to social media marketing and PR spent 17% more in the fast food category.
  • When exposed to social media marketing and TV commercials, consumers were twice as likely to eat more from Wendy’s.
  • Social media marketing and OOH also proved to be a good match, resulting in consumers being 1.5 times more likely to spend or consume more across the QSR industry.

Social Media Alone Yields Higher Spending

One other point worth noting in the study was the impact of social media-only campaigns. For KFC, people who were only exposed to social media marketing were seven times more likely to spend more money. How’s that for social media marketing’s impact on sales?

Motivation to Re-evaluate the Marketing Mix

These numbers should inspire us all. They should encourage retailers to revisit their marketing mix to make sure their marketing channels are integrated and optimized to drive sales. The statistics should also motivate marketers to, in the words of the legendary Vanilla Ice, stop, collaborate and listen to determine the multi-channel marketing approach that drives the most sales for their clients.

So back to the million-dollar question. Instead of asking how social media marketing drives sales, I challenge you to start asking how the right mix of social media marketing and multi-channel integration can drive sales for your company.

If you’d like to learn more about this topic, our very own Kevin Briody has written a post that breaks down the 4 types of social media ROI.

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About the Author: Meredith channels her account management experience and insane organizational skills into helping run the show at Ignite. As the resident account go-getter, Meredith knows how to get jobs started, moving, and performing like no one else. She's able to help clients make the leap from traditional to new media by leveraging her traditional roots combined with her fearless command of social media.



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