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ShareThis RoS

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Quantifying the Monetary Value of Social Sharing. New analysis calculates dollar value and influence of sharing on purchase decisions; shows online sharing is nearly equivalent to in-person recommendations.

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ShareThis RoS

  1. 1. Quantifying the Economic Value of Online Sharing THE RETURN ON A SHARE 1
  2. 2. With the growth of the social web, we turn more often to friends and strangers for recommendations on where to go, what to eat, and what to buy. 2 SHARING IS THE CONNECTIVE THREAD OF THE SOCIAL WEB
  3. 3. 3 THE IMPACT OF SHARING IS WELL- DOCUMENTED 73% of survey respondents process information more deeply, thoroughly, and thoughtfully when they share it. 92% of people trust recommendations from friends and family, and 70% trust consumer reviews they found online. 38% During a four-week test, Starbucks’ Facebook fans and “friends of fans” were 38% more likely to make a purchase.
  4. 4. 4 BUT HOW DOES IT ALL TRANSLATE TO MONETARY IMPACT?
  5. 5. Conjoint methodology uses statistical modeling to determine the relative importance of various factors affecting the consumer purchase decision. 5 SHARETHIS COMMISSIONED THE FIRST STUDY OF ITS KIND Luxury Premium Standard Economy Type Source Family Friends Acquaintances Strangers Professionals In-Person Online Share Consumer Review Strength Excellent Good Moderate Bad BRAND PURCHASE CONSIDERATION PRICE RECOMENDATION
  6. 6. 6 Methodology 2 STUDIES Conjoint Trade-off analysis CPG AutosConsumer Electronics Likert Traditional rating survey CPG AutosConsumer Electronics 6,000 CONSUMERS
  7. 7. 7 THE TAXONOMY OF SHARING FIVE TYPES OF GENERAL RECOMMENDATIONS 1 Online sharing. Personal recommendations and opinions shared via email or social networking by friends, family members, acquaintances or strangers. 2 Consumer Reviews. Recommendations and opinions published in online media or on social networks by strangers. 3 Consumer Ratings. Ratings, usually with up to five stars, by strangers in online media. 4 In-person Recommendations. Personal recommendations and opinions shared face-to-face by friends, family members, acquaintances or strangers. 5 Professional Reviews. Articles and product reviews published in traditional print media and in online media written by professionals and experts.
  8. 8. 8 Key Findings Recommendations have more impact on a consumer’s decision-making process than brand or price Highly positive online shares generate a 9.5% increase in purchase intent, while negative reviews can decrease intent by 11.0% Online sharing has a measurable effect on a product’s prices, driving incremental value by as much as $1.54, $34.47, and $9,623.74 for supermarket goods, mini tablets, and autos, respectively
  9. 9. FINDINGS 9
  10. 10. 10 IMPORTANCE OF PRODUCT CHARACTERISTICS TO PURCHASE INTENT 58% 34% 8% 56% 24% 19% 56% 25% 19% CPG Electronics Autos Recommendations Price Brand Recommendations have more impact on a consumer’s decision- making process than brand or price
  11. 11. IMPORTANCE OF RECOMMENDATION COMPONENTS TO PURCHASE INTENT The strength of a recommendation is far more important than its author or source 11 41% 11% 6% 43% 10% 3% 43% 11% 2% CPG Electronics Autos Strength (bad, moderate, good, excellent) Source (family, friends, acquaintances, strangers, professionals) Type (consumer reviews/ratings, online shares, in-person rec., professional reviews)
  12. 12. 12 RELATIVE VALUE OF RECOMMENDATION SOURCE Across all product categories, consumers value most the opinions of friends and family 8.0% 7.7% 7.5% 12.7% 8.5% 9.0% 14.0% 9.6% 10.7%10.5% 11.7% CPG Electronics Autos Strangers Acquaintances Close Friends / Family Professionals
  13. 13. RETURN ON ‘EXCELLENT’ RECOMMENDATIONS Highly positive shares yield a return of 9.5% 13 6.3% 7.3% 9.5% 10.6% 10.2% Consumer Ratings Consumer Reviews Online Shares In-Person Recommendations Professional Reviews 6.0% 6.2% 11.2% 13.2% 7.1% 7.6% 8.1% 9.3% 10.5% 5.7% 8.1% 9.2% 9.3% 10.0% CPG Electronics Autos
  14. 14. NEGATIVE RETURN ON ‘BAD’ RECOMMENDATIONS Negative shares lower purchase intent by 11.0% 14 (11.3%) (11.2%) (11.0%) (11.2%) (10.2%) Consumer Ratings Consumer Reviews Online Shares In-Person Recommendations Professional Reviews (13.1%) (13.1%) (12.5%) (12.9%) (10.6%) (10.6%) (10.5%) (10.6%) (10.5%) (10.2%) (10.0%) (9.9%) (10.0%) (9.9%) CPG Electronics Autos
  15. 15. PRICE IMPACT OF ‘EXCELLENT’ RECOMMENDATIONS – JAGUAR XK Positive recommendations add significant incremental value 15 INCREMENTAL VALUE: +$9,365 +$7,494 +$7,378 +$6,520 $85,865 Professional Review $83,994 In-Person Recommendation $83,878 Online Shares $83,020 Online Reviews +$4,601 $81,102 Online Ratings $76,500
  16. 16. 16 PRICE IMPACT OF ‘EXCELLENT’ RECOMMENDATIONS – MINI TABLETS The price lift relatable to online sharing is noticeable across all three product verticals Consumer Ratings Consumer Reviews In-Person Recommendations Online Shares Professional Reviews $22.09 $23.56 $24.91 $28.76 $32.44
  17. 17. PRICE IMPACT OF ‘EXCELLENT’ RECOMMENDATIONS – AUTOS For autos, positive online shares are as effective at driving value as in-person recommendations 17 Consumer Ratings Consumer Reviews In-Person Recommendations Online Shares Professional Reviews $2,312 $3,277 $3,708 $3,766 $4,702
  18. 18. 18 PRICE IMPACT OF ‘EXCELLENT’ RECOMMENDATIONS – SUPERMARKET GOODS For CPG brands, positive online shares have nearly twice the impact on price as general consumer reviews Consumer Ratings Consumer Reviews In-Person Recommendations Online Shares $0.42 $0.44 $0.79 $0.93 1.8x
  19. 19. 19 PRICE IMPACT OF ‘BAD’ RECOMMENDATIONS – VISINE Negative reviews drive value down $6.97 $7.01 $7.03 After Negative Consumer ReviewAfter Negative Online ShareAfter Negative In-Person Recommendation Incremental Loss: - $1.03 - $0.99 - $0.97 $8.00
  20. 20. 20 WHAT DOES IT ALL MEAN?
  21. 21. 21 > MARKETERS: INVEST IN SHARING! View current customers as marketing partners Boost advocacy by targeting existing customers, providing shareable content, and encouraging them to share their experiences. Enable Customer Evangelism When building your marketing strategy, consider your audience’s motivations, context, and channels, and ensure that sharing tools are seamlessly embedded into the experience. Monitor your online presence through sharing Large changes in activity can provide early indications of potential opportunities or issues to be addressed. Look across social channels for a broader context.
  22. 22. 22 > AND TREAT SHARERS AS POTENTIAL ASSETS Address negative reviews openly and honestly Social media makes bad reviews go viral. Address problems, encourage open dialogues, acknowledge mistakes, and seek swift resolution wherever possible. Use paid media to target and convert new customers Social sharing increases the propensity to buy by 9.2%, making social marketing tactics a good complement to traditional paid media strategies. Use social insights to optimize media Social signals can be used to determine where and when to spend media dollars. Leverage insights gleaned from social analytics to optimize marketing spend.
  23. 23. 23 > PUBLISHERS: MAKE SHARING EASY AND ACTIONABLE! Get Started Generate remarkable, attention-worthy content to drive traffic and engagement. Reach your entire audience Broaden your social channel reach beyond Facebook and Twitter. Collect insights to truly understand how your content performs across the web. Command higher CPMs Know and understand the social quality of your content to help advocate for higher CPMs. Embrace developers and turn data into action Learn to work closely with developers to create new apps that engage consumers in novel and exciting ways.
  24. 24. 24 THE VIRTUOUS CIRCLE OF SHARING SHARING INSIGHTS OPTIMIZATION EARNED MEDIA LARGER AUDIENCE
  25. 25. ABOUT SHARETHIS | BERESFORD | THE PALEY CENTER FOR MEDIA ShareThis uses large-scale social data to deliver breakthrough insights, audience building and advertising solutions across mobile and desktop environments. Every day millions of consumers use ShareThis to share content across multiple devices and more than 120 social channels including Facebook, Twitter, LinkedIn and Pinterest — giving the company unrivaled visibility into online social behavior. The company works with 50+ of Advertising Age’s 100 leading national advertisers and is based in Palo Alto, Calif. To learn more visit http://www.sharethis.com. 25 Beresford Research helps companies seize market opportunities through thoughtful research based on innovative methodologies and rigorous execution. We create initiatives that are tightly aligned to our clients’ strategic needs, and provide unique industry insights. Founded in 1991 as a marketing and consulting firm, Beresford Research brings a strategic focus to every project. We partner with our clients to provide creative, customized solutions that deliver unprecedented value without the overhead. Clients include Booz & Co., Novartis, Oxford Economics, PhoCusWright, The Week and Towers Watson. For more information, please visit www.beresfordresearch.com. The Paley Center for Media seeks to preserve the past, illuminate the present, and envision the future through the lens of media. With the nation’s foremost public archive of television, radio, and Internet programming, the Paley Center produces programs and forums for the public, industry professionals, thought leaders, and the creative community to explore the evolving ways in which we create, consume, and share news and entertainment. In an era of unprecedented change, the Paley Center advances the understanding of media and its impact on our lives. The Paley Center for Media was founded in 1975 by William S. Paley, a pioneering innovator in the industry. For more information, please visit www.paleycenter.org.

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