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DESCRIPTION
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.TRANSCRIPT
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Quantifying the Economic Value of Online SharingTHE RETURN ON A SHARE
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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.
SHARING IS THE CONNECTIVE THREAD OF THE SOCIAL WEB
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THE
IMPACT OF SHARINGIS 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.
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BUT HOW DOES IT ALL TRANSLATE TO
MONETARY IMPACT?
Conjoint methodology uses statistical modeling to determine the relative importance of various factors affecting the consumer purchase decision.
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SHARETHIS COMMISSIONED THE FIRST STUDY OF ITS KIND
Luxury
Premium
Standard
Economy
TypeSource
FamilyFriendsAcquaintancesStrangersProfessionals
In-PersonOnline ShareConsumer Review
Strength
ExcellentGoodModerateBad
BRANDPURCHASE
CONSIDERATION
PRICE
RECOMENDATION
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Methodology
2 STUDIES
ConjointTrade-off analysis
CPG AutosConsumer Electronics
LikertTraditional rating survey
CPG AutosConsumer Electronics
6,000 CONSUMERS
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THE TAXONOMY OF SHARINGFIVE 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.
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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
FINDINGS
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IMPORTANCE OF PRODUCT CHARACTERISTICS TO PURCHASE INTENT
58%
34%
8%
56%
24%
19%
56%
25%
19%
Autos Electronics CPG
Recommendations
Price
Brand
Recommendations have more impact on a consumer’s decision-making process than brand or price
IMPORTANCE OF RECOMMENDATION COMPONENTS TO PURCHASE INTENTThe strength of a recommendation is far more important than its author or source
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41%
11%
6%
43%
10%
3%
43%
11%
2%
Autos Electronics CPG
Strength (bad, moderate, good, excellent)
Source (family, friends, acquaintances, strangers, professionals)
Type (consumer reviews/ratings, online shares, in-person rec., professional reviews)
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RELATIVE VALUE OF RECOMMENDATION SOURCEAcross all product categories, consumers value most the opinions of friends and family
CPG Electronics Autos
8.0% 7.7% 7.5%
12.7%
8.5% 9.0%
14.0%
9.6%
10.7% 10.5%
11.7%
Strangers Acquaintances Close Friends / Family Professionals
RETURN ON ‘EXCELLENT’ RECOMMENDATIONSHighly positive shares yield a return of 9.5%
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Consumer R
atings
Consumer R
eviews
Online Sh
ares
In-Person Reco
mmendations
Professi
onal Revie
ws
6.3% 7.3%
9.5% 10.6% 10.2%
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
NEGATIVE RETURN ON ‘BAD’ RECOMMENDATIONSNegative shares lower purchase intent by 11.0%
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Consumer R
atings
Online Sh
ares
Professi
onal Revie
ws
(11.3%) (11.2%)(11.0%) (11.2%)
(10.2%)(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
PRICE IMPACT OF ‘EXCELLENT’ RECOMMENDATIONS – JAGUAR XK Positive recommendations add significant incremental value
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INCREMENTAL VALUE: +$9,365 +$7,494 +$7,378 +$6,520
$85,865
ProfessionalReview
$83,994
In-PersonRecommendation
$83,878
OnlineShares
$83,020
OnlineReviews
+$4,601
$81,102
OnlineRatings
$76,500
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PRICE IMPACT OF ‘EXCELLENT’ RECOMMENDATIONS – MINI TABLETSThe 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
PRICE IMPACT OF ‘EXCELLENT’ RECOMMENDATIONS – AUTOSFor autos, positive online shares are as effective at driving value as in-person recommendations
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Consumer Ratings
Consumer Reviews
In-Person Recommendations
Online Shares
Professional Reviews
$2,312
$3,277
$3,708
$3,766
$4,702
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PRICE IMPACT OF ‘EXCELLENT’ RECOMMENDATIONS – SUPERMARKET GOODSFor 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
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PRICE IMPACT OF ‘BAD’ RECOMMENDATIONS – VISINE
Negative reviews drive value down
After Negative Consumer Review
After Negative Online Share
After Negative In-Person Recommendation
$6.97 $7.01 $7.03
Incremental Loss: - $1.03 - $0.99 - $0.97
$8.00
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WHAT DOES IT ALL MEAN?
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>MARKETERS: INVEST IN SHARING!
View current customers as marketing partnersBoost advocacy by targeting existing customers, providing shareable content, and encouraging them to share their experiences.
Enable Customer EvangelismWhen 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 sharingLarge changes in activity can provide early indications of potential opportunities or issues to be addressed. Look across social channels for a broader context.
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>AND TREAT SHARERS AS POTENTIAL ASSETS
Address negative reviews openly and honestlySocial 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 customersSocial 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 mediaSocial signals can be used to determine where and when to spend media dollars. Leverage insights gleaned from social analytics to optimize marketing spend.
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>PUBLISHERS: MAKE SHARING EASY AND ACTIONABLE!
Get StartedGenerate remarkable, attention-worthy content to drive traffic and engagement.
Reach your entire audienceBroaden your social channel reach beyond Facebook and Twitter. Collect insights to truly understand how your content performs across the web.
Command higher CPMsKnow and understand the social quality of your content to help advocate for higher CPMs.
Embrace developers and turn data into actionLearn to work closely with developers to create new apps that engage consumers in novel and exciting ways.
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THE VIRTUOUS CIRCLE OF SHARING
SHARING
INSIGHTS
OPTIMIZATION
EARNED MEDIA
LARGER AUDIENCE
ABOUTSHARETHIS | 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.
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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.