Hitwise Intelligence - Robin Goad - UK

Nice piece of research. It would be interesting to see exactly which areas of the social networks referred the traffic. Was it paid advertising within the networks; specific retailer groups set up in the networks; or (and probably the most powerful) was it traffic from people (advocates) telling their friends and posting links?

It's probably a lot to ask to break this down, but it would be very interesting.

Posted by Karl Havard | April 22, 2009 09:01 AM

Very good article.
Big brands and clever marketing companies will use social networks as free marketing tools and free alternatives to search engine PPC.
Big brands also know that social networks are very important, namely Twitter as they must be seen to response to feedback and queries much quicker than they do via email etc.

I for one like the change as is refreshing as more and more brands will create good incentives and exclusive deals via social networks.

Let's see if finances pick up and people start spending again how effective social networks become for big brands.

Posted by Danny Denhard | April 22, 2009 11:36 AM

Nice piece of work Robin and I second Karls request for a little more granularity in respect of which part of the SN referred the traffic.

It would also be useful to see Jan & Feb 2008 included in the graph because at the moment it looks a little like a seasonal blip for the post-Xmas "detox" period.

Posted by Robert Ames | April 22, 2009 03:42 PM

Excellent article!Do you think that social media marketing will be more important than seo?thanks

Posted by Chris | April 23, 2009 02:45 PM

I don't think this is such a good piece of research.

First, the largest Percent is Ebay? Who really cares; this is a declining property.

Second, you say, "more Internet visits on social sites than retailers." Why doesn't this make sense? People don't go to social sites to buy stuff. Do you think they should be spending all their time socializing on a retail site?

Third, do you have any evidence on the conversion rates of social sites to retailers. My bet is that it is significantly lower than paid search.

Fourth, don't you think think the economy has something to do with lower paid search (ie, advertising) volume? Look, retail sales are down, ad spend is down. Now if these are both down... you get the picture. I mean, it's not like the UK economy is in the greatest shape. In fact it'ts the worst since WWII. All these people are socializing so they can find a job or commiserate about the crooked bankers and crazy politicians.

In all, I'm surprised that the gap wasn't any larger.

With search there is an intent; not so on social sites unless a feed translates into intent; but that would be a big stretch.

Why don't you mention some of these caveats. Or perhaps you can present alternative views. Nonetheless, I suggest looking more deeply at an economic view and dig up the data to support or refute that view. As well, you might want to look at the macro economic efects on change. Me thinks this is a big factor here.

You might also run some AB experiments to test whether conversions are better on social sites. (My experience is that they aren't even close.) Then you could really give some recommendations to the market.

Posted by ajolie11 | April 24, 2009 04:28 AM

PPC is too costly - social media marketing is the way I have to go. Great information.

Posted by Jason | April 24, 2009 06:53 AM

Thanks for all your comments. Karl and Robert, I will indeed generate the paid search figures for other industries and post them on the blog next week.

To answer the more general questions about the overall importance of social networks vs. paid search, I don't believe that social networks will ever overtake search as a source source of traffic. To put things into context, during March the onle retail sector received 40% of its traffic from search engines, but only 7% from social networks. Obviously there is a large gap there, so apologies if by saying that social netw were growing and paid search was increasing I gave the impression that the latter was overtakign the former.

Indeed, a couple of weeks ago I posted an article comparing the downstream traffic of Google, Facebook, Hotmail and Twitter, which included the conclusion that Google is much better at sending traffic to 'transactional' (i.e. retailers, travel, etc.) than either Facebook or Twitter. For example, Google UK currently sends 377x more traffic to online retailers than Twitter! You can read the full analysis here:

http://weblogs.hitwise.com/robin-goad/2009/04/what_would_a_google_twitter_marriage_mean.html

ajolie11 makes a good point about conversion rates. Unfortunately we are not able to measure transactions and conversions, but I suspect that (s)he is right to assume that a visit from a social network is less likely to convert than visit from a paid result looking for a specific product. This will probably always be the case, and I imageine that most of retailers' social networking traffic will be brand led or at an early stage of the buying cycle. The challenge for retailers, once they manage to increase the amount of traffic they receive from social networks, will be to improve the 'quality' of that traffic - i.e. better conversion rates.

Finally, regarding ajolie11's other comments: the fall in paid search rates is indeed at least in part due to the economic environment. Sorry if I didn't make that clear - I think I assume that it was self-evident. I did, however, tag this post 'economy', so that it can be read along with all of our other post relating to the impact of the economic downturn on UK Internet behaviour:

http://weblogs.hitwise.com/robin-goad/economy/

As for eBay, it may be losing market share in the long term, but it is still the biggest online retailer in the UK by some margin. You'll note that we also highlighted examples of smaller retailers - Asos, Abebooks - that are 'punching above their weight' in terms of the amount of traffic they receive from social networks. Here are some other examples of compaines doing the same that we bave blogged about in the past:

The Guardian: http://weblogs.hitwise.com/robin-goad/2009/03/twitter_and_uk_newspaper_websites.html

The Sun: http://weblogs.hitwise.com/robin-goad/2009/02/the_sun_and_the_baby_father.html

Money Saving Expert: http://weblogs.hitwise.com/robin-goad/2009/02/money_saving_expert_martin_lewis_most_searched_for_celebrity.html

The Telegraph: http://weblogs.hitwise.com/robin-goad/2009/02/the_telegraph_digg_traffic.html

Fashion retailers in general: http://weblogs.hitwise.com/robin-goad/2008/06/online_fashion_retail_growing_despite_high_street_slowdown.html

Screwfix: http://weblogs.hitwise.com/robin-goad/2008/04/uk_diy_and_screwfix.html

Cadbury's: http://weblogs.hitwise.com/robin-goad/2007/09/hsbc_cadburys_and_facebook_1.html

JustGiving: http://weblogs.hitwise.com/robin-goad/2007/09/facebook_and_charities.html

And many more here! http://weblogs.hitwise.com/robin-goad/social_networks/

Robin

Posted by Robin Goad | April 24, 2009 07:29 AM

Ajolie smartly refutes or at least challenges the entire report, point by point. This is solid, clear-headed thinking, where the report itself is clearly thin. Sorry, but it almost feels like it was worked backward from the sensationalist headline of "social trumps SEM". That's about as helpful as saying a good Stilton trumps apples...

It's all about creating smart coverage & clickable relevance across all appropriate digital channels --- no matter what you're selling.

Posted by Thom | April 24, 2009 11:27 AM

Interesting do you think that #amazonfail issue had an impact on the amount of social traffic going to Amazon?

http://thelostagency.wordpress.com/2009/04/13/amazon-burned-at-the-stake/

Posted by David | April 27, 2009 01:48 AM

Interesting, I'd like to know how they do it!

Posted by Lulu | May 3, 2009 11:50 PM

I'd like to know how they do it too

Posted by metin2 yang | November 9, 2009 09:33 AM

It sounds great. I'm also want to know the reason why they can do it.

Posted by Concrete mixing plant | December 9, 2010 09:38 AM

I run a UK based online wine and champagne gift shop, which also provides engraved and personalised gifts to internet shoppers. I believe social networking is a perfect platform for big brands, as well as smaller brands out there to promote their products.

A year later, Asos still has a huge presence on social networking sites, such as Facebook, and it would be interesting to see if that figure of 13.3% traffic has increased over the last year, to see if social networking might be a lasting trend when it comes to marketing.

Posted by WineGifts4U | February 7, 2011 02:38 PM