E-commerce Promotion Using Facebook: Nielsen’s Study

by April on May 9, 2011

There’s a lot of talk about using social media sites for e-commerce promotion. But is branding through social sites like Facebook efficient? While some entrepreneurs argue that Facebook users do not visit the media platform to conduct shopping-related activities, The Nielsen Company’s study of Facebook e-commerce performance shows that businesses promoting their services and deals on Facebook do experience higher levels of success. Understand how the quantifiable data gathered by this study proves Facebook can build brand awareness and customer loyalty.

Study after study has proven that consumers trust the tastes and endorsements of their friends, and will try a peer-recommended product. If you have ever visited Facebook, you are familiar with the ads that popup asking you to like brands and companies your friends are interested in. Becoming a ‘fan’ of these pages has become very popular on Facebook. A study performed by The Nielsen Company pulled data results for 125 ad campaigns by 70 advertisers from over 800,000 Facebook users. The conclusion of this study showed that when a user ‘likes’ or becomes a fan of a certain movie, product, service, or brand, their friend is 60% more likely to consider it. Because consumers trust their peers when it comes to making a purchasing decision, you can contribute to your own e-commerce promotion by earning customer loyalty. Data actually proves that earned loyalty is much more effective than paid media advertising.

Homepage Ads are ads that are listed on the top of each user profile. These ads are shown to have increased both customer awareness and purchase intent. Most homepage ads are tailored to fit the interests of the profile user, depending on the sites and links they visit most often. This means that advertising is targeted to a specific niche, making it more effective. When ads are listed with a social context (meaning that the ad contains the phrase “5 of your friends like this” or lists names of friends who have liked that ad), users are 8% more aware of the ad and 8% more likely to purchase the product advertised, when compared to a control group.

Facebook was not created for advertising intent, but after seeing how effective Facebook advertising can be, more and more e-commerce site owners are promoting their products on Facebook for increased loyalty and brand recognition. To see more about The Nielsen Company’s study, click here.

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