Can
Facebook Help Retailers?
While conventional ads on social networking sites have failed to attract
consumers, now many retailers are using new ways to increase their
sales. Pizza Hut is using Facebook Platform for selling food and others
like Best Buy and Wal-Mart have started Facebook pages. A Rosetta social
media study says 59% of 100 leading retailers have a fan page on
Facebook.
According to research firm IDC,
ads on social networking services have
lower click-through rates than
traditional online
ads and they also lead
to fewer purchases.
It’s
believed that most
social networks are struggling and they’re exploring
ways to make money.
However, marketers are still fascinated by the amount of consumer
traffic that social networks get. So they want to leverage this
interface to increase their sales.
Of
late, Pizza Hut has introduced several ways to order its pizza through a
new application, named "Pizza Hut Interface," which integrates with Facebook's main commerce system.
Rosetta, an interactive marketing agency in the U.S., has done a social
media study. It reveals 59% of 100 leading retailers currently have a
fan page on Facebook. According to the study, which was updated in Sept.
2008, 29 of the retailers surveyed added Facebook pages during four
months before Sept. These include Best Buy, Toys "R" Us, Kohl's, and
Wal-Mart.
"Social
media sites continue to be an important source of community connection,
and savvy retailers are reaping the benefits of Facebook's rapid
extension into new demographics, such as Gen-X and seniors," says Adam
Cohen, partner with Rosetta's consumer goods and retail practice.
The IDC
survey finds that social network users are less receptive to
advertising. According to the survey, advertising does not factor into
consumer motivations. In fact,
users are less tolerant of social
networking advertising than the best tolerated forms of online
advertising.
Ads on
social networking services have lower click-through rates than
traditional online ads (on the Web at large, 79% of all users clicked on
at least one ad in the past year, whereas only 57% of SNS users did),
and they also lead to fewer purchases (Web: 23%; SNS 11%), says IDC.
