1. Business Ideas
  2. Business Plans
  3. Startup Basics
  4. Startup Funding
  5. Franchising
  6. Success Stories
  7. Entrepreneurs
  1. Sales & Marketing
  2. Finances
  3. Your Team
  4. Technology
  5. Social Media
  6. Security
  1. Get the Job
  2. Get Ahead
  3. Office Life
  4. Work-Life Balance
  5. Home Office
  1. Leadership
  2. Women in Business
  3. Managing
  4. Strategy
  5. Personal Growth
  1. HR Solutions
  2. Financial Solutions
  3. Marketing Solutions
  4. Security Solutions
  5. Retail Solutions
  6. SMB Solutions
Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Learn more.
Grow Your Business Social Media

Return on Social Media Investment Leaves Many Underwhelmed

Return on Social Media Investment Leaves Many Underwhelmed
Credit: Milos/Shutterstock

Businesses may not be getting as much of a return on their social media investment as they expected.

Although many companies run aggressive marketing campaigns on social media, 62 percent of U.S. consumers say Facebook and Twitter, among other sites, do not have any influence on those customers' decisions to purchase products, according to new research from Gallup. Just 5 percent of those surveyed said social media has a "great deal of influence" on their purchasing decisions.

"U.S. companies spent a combined $5.1 billion on social media advertising in 2013, and they obviously believe that this presents them with a return on investment," Gallup's Art Swift wrote in the study. "However, a solid majority of American adults say that social media have no influence at all on their purchasing decisions, suggesting that the advertising may be reaching smaller segments of the market, or that the influence on consumers is indirect or goes unnoticed." [19 Social Media Marketing Solutions for Small Businesses]

The research found that even millennials, who many consider to be the target audience of social media, tend to say that social media marketing is not much of a factor in their decision-making. While millennials, those born after 1980, were the most likely generation group to say that social media has at least some influence on their buying decisions, there were nearly as likely to say it had no influence at all.

The study discovered that social media's influence on Americans' purchasing decisions decreases with age. Three-quarters of Americans born before 1946 said that social media does not have any impact on whether they purchase a product or service, with 68 percent of baby boomers saying the same.

Overall, the vast majority of those surveyed — 94 percent — use social media to connect with friends and family. The study found that less than 30 percent use social media to follow trends and find product reviews and information, with only 20 percent visiting social networking sites to comment on what's new or to write product reviews.

The Gallup research shows that for purchasing decisions, consumers are much more likely to turn to friends, in-store displays, television commercials, and even mail catalogs and magazines than they are to check a company-sponsored Facebook page or Twitter feed.

Despite the study's results, businesses shouldn't completely abandon their social media efforts. Swift said companies can use social media to engage their customer base and boost its numbers. In general, businesses stand to benefit when they use a more service-focused social media approach, rather than one dedicated to simply pushing their products, Swift said.

"Consumers appreciate the highly personal and conversational nature of social media sites, and they prefer interacting in an open dialogue as opposed to receiving a hard sell," Swift wrote. "And companies' use of social media to provide timely responses to questions and complaints accelerates brand loyalty and, eventually, sales."

The study was based on surveys of 18,525 U.S. adults over the age of 18.

Originally published on Business News Daily

Chad Brooks

Chad Brooks is a Chicago-based freelance writer who has nearly 15 years experience in the media business. A graduate of Indiana University, he spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including, local and state government, crime, the legal system and education. Following his years at the newspaper Chad worked in public relations, helping promote small businesses throughout the U.S. Follow him on Twitter.