Wired published an article about the results of an extended study by marketing data company Custora about how various channels in the multichannel marketing communication mix perform in terms of driving sales in the e-commerce space. The results should spark discussion in the marketing community.
Organic search and CPC were the overall leaders, which makes sense from a user psychology perspective in the present time. When someone goes to a search engine, they are actively seeking something, which is a unique frame of mind, a frame of mind that likely indicates greater purchase readiness. Email ranked just below those two as channels for customer acquisition. Facebook and Twitter were near the bottom of the list for generating e-commerce purchases.
Custora also looked at Customer Lifetime Value (CLV) and much of the data was similar to rankings of efficacy for customer acquisition. Organic search and CPC brought in the most valuable customers, but email brought in customer with that were 11% above average value. Customers that came in through Facebook were 1% more valuable than average but customers acquired via Twitter were 23% less valuable than average. Discount announcements via Twitter may be the reason for Twitter’s low CLV number.
How does this impact the multichannel environment?
First off, this has only moderate application. It applies most to brands that sell most in the e-space. For example, most purchase occasions of Coca-Cola are not online. However, some of our key industries are more reliant on online retailing than others.
In essence, nothing changes. Email marketing, which has been losing its “cool factor” to social media for years, demonstrates value in the wallet, where it matters. Success in email marketing doesn’t necessarily happen on a whim. It takes a proven methodological approach to do so, and a proven platform to guide the process is helpful. Email is a format than allows for longer form communication than a 140 character Tweet or a just slightly longer Facebook post. In many product categories, it takes more than 140 written characters to complete a sale.
With all that said, there’s no reason to discount the importance of social media in the whole marketing equation. While the current data may show that social media isn’t responsible for closing the deal as often as other marketing tactics, it plays an indispensable role in the whole process. In the classic AIDA model of marketing, social media is strongest in the AI part of the model, but sometimes can play a role in the DA segment. It takes AI to get to DA though. There’s an expectation in a lot of product categories that a brand at least maintains some sort of social presence, at least in the major social media networks, and possibly in some niche networks related to their overall goals in social media. Also, over time, the relationship between social media and search engines is likely to change, and it has already shown signs of change. 2013 data from Forrester Research indicates that about half of 25 and under Internet users are going to social over search engines as a means of discovery.
Where email fits into the whole equation will likely evolve over time, as will best practices with email marketing. Email’s ability to be a conduit of greater detail than just a few sentences should serve it well as a channel choice in the marketing mix in the years to come.