Blog Post

Does Social Media Influence Purchasing Decisions?


Social media is a great tool for connecting to people and brands you care about. Brands and businesses have been able to reap the benefits of social media innovations over the past decade, and marketers have made many cases for its strengths and weaknesses. A new study recently released revealed social media's real impact on purchasing decisions. Watch the Daily Brown Bag to learn the results of the survey covering the impact of social media on consumer purchasing decisions.

Also available on YouTube.

TRANSCRIPTION:

Welcome to the Daily Brown Bag, today we will be talking about Gallup's recent survey that shows that social media does not influence the purchase decision. I'm Chad Hill joined by Adam Seltzer.

Good afternoon Chad, welcome to the Brown Bag. I have some pretty interesting news here coming from Gallup based on a recent survey that they did called State of the American Consumer, and it's grabbing some attention in the headlines today Chad because essentially Gallup is saying, based on this recent study that they did, that social media does not influence consumer purchasing behaviors which of course is a fairly startling finding and one that a lot of people are taking issue with, most notably Facebook. Why is this a big deal? Companies in the US have spent around $5 billion dollars on social media advertising last year so the idea that advertising and social media as a whole marketing channel is not effective in influencing consumer purchasing decisions is certainly something that's turning some heads, so what specifically did Gallup find?

Well they found in their State of the American Consumer reports said that 62% of consumers are saying that social media does not influence their decision when they go out to make a purchase. They're releasing this study under the headline of the Myth of Social Media, specifically here are some of the breakdowns to the responses to this question; the question was, how much doe's social media typically influence your purchasing decision? 5% said a great deal of influence, 30% said some, but 62% said, a whopping majority, said no influence at all Chad and 3% said they don't know.

So Gallup is out there waving this result around causing quite a bit of controversy and it's got a few noses out of joint, most notably Facebook and what is their reaction to this Chad?

Well the loudest and most vocal who came out about this was Facebook who really had the lion share of social ad spend, in fact last year the company spent $5.1 billion dollars in Facebook ads. So a Facebook spokesperson came out and said that really the core of this Gallup study was self-reporting why people made and what influenced their purchasing decisions, and they simply stated any person involved in survey research would say self-reported behavioral data is inherently unreliable. And then there was a Forbes article that backed that up, Roger Dooley, who wrote a...an author stated that the problem with this particular data is asking people to self-report why they bought something is doomed to fail, and that most decisions are made for emotional reasons or by using mental short-cuts that bypass logic and analysis. So really when you think about this, and Gallup is the king of survey research out there they're one of the most well-known brands, they're really kind of saying when you ask people why they buy something, getting into that emotional decision and being able to attribute it to social media ads is pretty difficult.

So a good strike back from Facebook I have to say that the argument is kind of compelling, self-report data typically around emotional decisions is as you say, is notoriously unreliable. Gallup probably knows that but they got an interesting finding, so they're out waving it around to stir up the headlines with Facebook seeing that it could really hurt their bottom line in fighting back. Well I think this is interesting Chad, we always continue to follow the social media movement and how people try to show return investment, this is probably another piece in the argument, I'm sure there will be a lot more coming. We'd be very interested in what your thoughts are on how effective social media advertising is.

We have this debate internally at HubShout all the time as well as with our researchers, drop us a comment and better yet subscribe to our YouTube channel so we can see you back here for another Brown Bag really soon.