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Plus Report - By Thomas Baekdal - June 2012

Social Conversion Rates: Where The Real Value Comes From

To grow, you need engagement because that creates a viral effect. But your engagement has to focus on creating influence and getting people to pay attention. Otherwise you just create engagement for the sake of engagement, and your conversion rate will suffer.

There is an increasing hype in the social world about engagement, or rather that more and more people and social services focus more on engagement than the actual conversion rates.

It is kind of the same problem that we see in the media industry with page views. The more you optimize for page views, the less useful a result you actually get and you are slowly driving your audience away. Or worse still, you are attracting a type of audience that rarely converts.

It's the same with social and engagement. There is no question that engagement is a great thing, but engagement is not the end. It is a means to an end, and the end must be a conversion. It doesn't matter how much engagement you have if it doesn't convert.

And just like with media sites, the more you optimize for social engagement, the closer you get to doing something that is directly harmful to your business. It's great in the short run, but it's putting you out of business in the long run.

And it is not just what *you* do. This is an even bigger problem with most social sites. Facebook, for instance, uses EdgeRank to filter out people who don't engage. Klout, of course, only focuses on measuring engagement, and many startups are built solely around engagement as well.

Don't get me wrong, engagement is very important - but it is not the only thing that makes something valuable. In fact, when brands analyze their sales they often find that the listener (a person who doesn't engage, but is still influenced by you) is responsible for most of the sales.

I want to put this into perspective and help you understand the real impact of social in two different ways. Each one focusing on the different behavior and channels that lead to a conversion.

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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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