You could soon have a new way to buy products you see on Facebook.
The social media giant is reportedly developing shoppable video ads, a new ad format for retailers, according to The Information. It is unknown when the new ad format will launch, but some details on it have emerged.
These retail videos will come up as pre-roll ads with original video content that shows up in the News Feed. Users can then click on the video ad to get more information about the product. A second click would redirect the user to the retailer’s website in order to purchase the product.
Facebook has steadily been integrating more commerce into its platform. Last fall, the company began to let businesses enable a Shopping section on its Facebook page, and the Messenger app also has a new shopping assistant feature that assists users in buying products and tracking orders online.
Contrast this expansion with Twitter, which has stopped development of its own “buy” button. The company’s Head of Commerce, Nathan Hubbard, also recently departed. The differences between Facebook and Twitter in this regard suggest that some social media platforms can drive commerce more than others.
Social media generated more than 8% of U.S. retail web traffic in December 2015, according to Hitwise. Subscription-based retailers such as Dollar Shave Club and Birchbox, have noted a greater percentage of overall traffic coming from social media than other types of e-commerce. Approximately 14% of these companies’ U.S. web traffic in December came from social media.
New initiatives from a number of different social networks are making these platforms absolutely essential for retailers that want to drive sales and boost engagement.
Cooper Smith, senior research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on social commerce that analyzes whether social media is driving direct sales with the use of embedded “Buy” buttons on social media posts, or referring traffic to retailers’ websites and apps. It measures the impact social media has on e-commerce by looking at metrics such as conversion rates, average order value, and revenue generated by shares, likes, and tweets. It also outlines the latest commerce efforts by leading social networks.
Here are some of the key points from the report:
- Social is driving much bigger increases in retail traffic than any other online channel. Social media increased its share of e-commerce referrals nearly 200% between the first quarters of 2014 and 2015.
- For retailers to maintain these social gains, they will need to pay special attention to mobile, where social engagement with retail content is still limited. Social media users are 35% less likely to share a brand’s or retailer’s social post on mobile than they are on desktop computers.
- Facebook continues to grow its lead as the dominant social commerce platform. Facebook accounts for 50% of total social referrals and 64% of total social revenue. The site’s changing demographics could make older consumers a strong target for retailers leveraging the platform.
- Pinterest is a major social commerce player despite a relatively small user base. The pinning platform drives 16% of social revenue despite an audience 6.5 times smaller than Twitter. New buy and action buttons on retailer posts should make Pinterest an even stronger referral and revenue engine for brands.
- Twitter is losing its influence for mass-market merchants, but it could still have a role to play among sporting and events marketers, especially for location-based promotions. Recently, NFL and NBA teams have used Twitter to sell game tickets and merchandise.
- Instagram doesn’t drive significant sales activity for retailers but high-end companies have been leveraging the platform for branding purposes. New Buy buttons on paid posts, as well as increased targeting capabilities, could make the app a more important direct-response driver.
In full, the report:
- Sizes social media’s role for retailers compared to other referral sources such as search and email.
- Examines how social media’s transition to mobile is impacting the role of different social platforms.
- Looks at how the different social networks stack up in terms of conversion rates, share of social-generated retail sales, and average order value.
- Highlights up-and-coming social commerce players such as Snapchat and Instagram, and how brands are using them for influencer marketing.
- Outlines the latest major commerce moves by Facebook and Twitter, which could help drive up conversion rates from social.
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