This document discusses strategies for brands to challenge data from large tech companies in order to grow their margins and market share. It notes that while social media usage and advertising revenues are growing, social media often underperforms other marketing channels in driving conversions. However, social media is better at driving consideration than direct conversions. The document advocates rethinking social media strategy and metrics to focus on engagement over conversions since social media users are usually not ready to purchase. Attribution models also need to be reworked to better account for social media's role in the full customer journey.

1. Winning with
customer data:
Successful brands
challenge data from
big tech to grow
margin and market
share
James Hammersley
CEO
Good Growth

2. © Good Growth 2022
2
WHY
SHOULD
YOU
LISTEN
TO US?
Chapter 5: The Dark Side
of Digital
First 10 Emails receive a
Free Copy:

3. © Good Growth 2022
3
The Good Growth ‘Yo-Yo’ Problem

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4
IN AN ONLINE
SALE, TO
WHICH
CHANNEL DO
YOU ATTRIBUTE
THE
CONVERSION
AND HOW DO
YOU REPORT
EFFECTIVENES

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In this example, ”John” made a purchase on his fifth session
following a number of sessions through multiple channels…
$
John
Session 1
Organic Social
Session 2
Paid Social
Session 3
Organic Search
Session 4
Organic Search
Session5
Paid Search

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Which channel do you attribute the conversion to? Then, how
do you report effectiveness of the other channels that exist
in John’s experience?
$
John
Session 1
Organic Social
Session 2
Paid Social
Session 3
Organic Search
Session 4
Organic Search
Session5
Paid Search
Organic Social Conversion Rate 0%
Paid Social Conversion Rate 0%
Organic Search Conversion Rate 0%
Paid Search Conversion Rate 100%
Standard reporting would result in the following
conclusions:

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AS BRAND OWNERS AND
CURATORS OF 1ST PARTY DATA,
YOU CAN PUSH BACK ON BIG
TECH. BUT IT IS HARD…

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As social media usage continues to grow, we are increasingly
working with organisations to better understand and
respond to the challenges and opportunities social media
represents
Facebook Instagram YouTube Tik Tok
302M
users
118M
users
203M
users
73M
users
Statista; Number of Facebook users in the United States from 2017 to 2026
Statista; Number of TikTok users in the United States from 2019 to 2024
Statista; Number of Instagram users in the United States from 2019 to 2023
Statista: Forecast of the number of Youtube users in the United States from 2017 to 2025

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Statista; Social network advertising revenues in the United States from 2017 to 2021
Marketing dive; Facebook ad revenue surges 46% as marketer demand lifts prices
This challenge is being driven in part by the significant
growth in social media marketing; Facebook has seen a
46% increase in advertising revenue to $25Bn. Within the
US, total social media advertising is expected to reach
$50.8Bn in 2021
0
10
20
30
40
50
60
2017 2018 2019 2020 2021
Revenue
($
Billion)
Total social media advertising revenue, US from 2017 to
2021

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Conversion
rate

Indicative conversion rates for key marketing
channels across E-Commerce retailers
But this growth in investment is despite social media
underperforming compared to all other marketing channels;
why continue to invest in a channel that doesn’t drive value?
When we
compare
commercial
effectiveness
metrics across
key marketing
channels, social
media marketing

11. © Good Growth 2020
An increased pressure to invest in social
media marketing despite the data
suggesting a minimal return on investment
for this activity
THIS IS THE
SOCIAL
MEDIA
PARADOX

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This challenge is exacerbated by an inherent reporting bias
within most advertising platforms
› The aim of an advertising platform is not to provide robust data or reporting,
but rather to encourage you to spend more
› This creates an inherent bias within any data provided by these platforms
› The most obvious example of this is attribution modelling, in which the
advertising platform attempts to attribute as many transactions as possible to
your activity so as to artificially maximise return on ad spend and
generate a sense of value which encourages increased investment

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THE RESULT
BEING THAT
DESPITE
INCREASED
INVESTMENT,
MANY
ORGANISATION
S ARE SIMPLY
RUNNING IN
PLACE
“Now, here, you see, it takes all the running you can
do, to keep in the same place. If you want to get
somewhere else, you must run at least twice as fast as
that!”

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Organisations that move past this challenge do so not by
simply improving performance, but rather by asking the
right questions:
Why do the
majority of users
through social
media fail to
buy?
Which customer
segments use
social and what
are they trying
to do?
What is the real
value of our
social media
activity?

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Through our research in the US, many users through social
do not buy simply because they are not ready to, but this
does not mean they have had a bad experience
%
of
respondents

Why users fail to buy, social media
indicative example
Very bad Bad Fair Good
%
of
respondents

How would you rate your experience
today, social media indicative example

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Not only do users choose not to buy, rather than ‘failing-to-
buy’ we have found there is no correlation between bounce
rate and performance for social media traffic. Do the typical
metrics for effectiveness still apply?
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Revenue
Bounce rate
Correlation between Bounce rate and
Revenue
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Conversion
Rate
(%)

Bounce rate
Correlation between Bounce rate and
Conversion rate

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This insight suggests that social media drives users with a
fundamentally different objective. They are in a
consideration mindset rather than a conversion mindset and
so require different engagement:
A Consideration Mindset? A Conversion Mindset?
‘What is this?’
› Typically prospective customers
› May be recently acquired and new to the
brand
› Not familiar with the value/product
proposition.
Unlikely to convert without highly effective
sales engagements
‘How can I buy this?’
› Often are existing customers
› May have migrated from a consideration
mindset
› Have seen the value proposition before.
More likely to buy with less encouragement

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This tendency for social media to drive consideration rather
than conversion is also visible when we look at conversion
paths to transaction…
In this example ”John” made a purchase on his fifth session
following a number of sessions through multiple channels.
To which channel do you attribute the conversion and how do
you report effectiveness of the other channels that exist in
John’s experience?
$
John
Session 1
Organic Social
Session 2
Paid Social
Session 3
Organic Search
Session 4
Organic Search
Session5
Paid Search

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… With many conversions supported by social media being
attributed to other marketing channels
$
$
$
$
$
$
Example conversion paths, social media sessions highlighted
>80%

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The result being that social media marketing is a key
commercial channel, but not a converting one. This is visible
when we look at the correlation between traffic and
transactions, rather than conversion rate
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
- 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000
Transactions
Sessions
Correlation between paid social traffic and transactions

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THE REAL VALUE OF
SOCIAL MEDIA
THEREFORE IS NOT TO
DRIVE TRANSACTIONS,
BUT RATHER TO DRIVE
CONSIDERATION AND TO
WORK IN TANDEM WITH
OTHER MARKETING
CHANNELS TO DELIVER
GROWTH

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This requires a change in approach to social media strategy
in order to effectively respond to the opportunity
Deprioritise
commercial
metrics
Prioritise
engagement
Think about the
entire conversion
path
Attribution re-
modelling
Typical E-Commerce
metrics (conversion
rate, revenue per user
etc.) are less applicable
to consideration
channels as they fail to
represent the intent of
the user
The objective of a
consideration channel is
to drive engagement
with the proposition,
reporting and user
experience for such
channels should focus
on maximising
engagement rather
Users who buy having
initially engaged
through a consideration
channel will typically do
so through another
means, often direct. It is
important to think
about the entire
conversion
Using conversion path
data it is possible to
dynamically remodel
transactions and
commercial metrics
against first click
channels. This allows for
an alternative view of
commercial

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Go home - go back to work - and ask 5 questions….
1.What is the correlation coefficient between social media investments
and revenue?
2.Which metrics are the best indicator for measuring engagement and
why?
3.Over what period of time do customers consider buying before
converting?
4.How do customers arriving from social describe their shopping
intent?

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As you ‘Yo–Yo’ into your organisation – as leaders – your role
is to set the operating model and data standards (Chapter 7
& 8) to address these 5 key questions….
Good Growth see e-commerce is an integrated
system and have built a methodology, measures
and processes that help clients drive performance at
every point of the system
Good Growth’s process takes the scientific method
and applies it to digital data. The result for clients is a
customer-led strategy that tests innovations in sales,
marketing and at times proposition (e.g. new product or
service) and identifies the best opportunities for
growth

25. THANK YOU
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