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Plus Report - By Thomas Baekdal - July 2011

Social vs. Time vs. Buying

You should focus on the value of the social connection. If that means people will spend more time on your site, then that's great. If it means people going to spend less time, then that's great too.

About two weeks ago, Social Commerce provider "Reevoo" came out with a study. It found that if you add social elements to your site the net effect in sales increase substantially.

Our data shows that adding social commerce content to a site increases sales by 18%, on average. This data is based on our partners' performance across all of 2010. The 18% increase is down to a huge 177% increase in conversion rate, plus increases in average order values and visitor return rates.
There is also a strong positive correlation between how long someone spends on site and how likely they are to convert. For example, people spending 5 to 7 minutes on a site convert at a rate of 2.8%, whereas people spending 13 to 15 minutes convert at the rate of 7.1%.

They also found that, for products above $320, 90% spend more than 24 hours researching it. But they are not spending 24 hours looking at your product on your site, they are only spending an average of six minutes. But when you social media to the mix, the time on site goes up to an average of 14 minutes.

Basically, what Reevoo is saying is that if you add social elements to your site (like reviews, what people say, how it is being shared etc), people will spend more time looking at your product, and thus give you an increase in sale.

They way they measured and determined this was to look at the average time-on-page, compared to the number of page views.

They also found other things, like:

Note: Reevoo provides these tools to retailers, so the study is obviously biased.

If you forget all the numbers for a second, this is a very interesting study. It clearly indicates that there is a positive correlation between adding social to your site and convincing people to buy a product.

Time on page

There is, however, one very big problem with this study - and I'm sure your analytic geeks out there have already spotted it. The problem is "time-on-page." It is one of the most unreliable metrics that we have, simply because we are measuring the wrong thing.

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Thomas Baekdal

Founder, media analyst, author, and publisher. Follow on Twitter

"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made ​​himself known for his analysis of how digitization has changed the way we consume media."
Swedish business magazine, Resumé


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