Altimeter Report: Social Commerce, How Brands Are Generating Revenue in Social Media, by @lcecere

I’m frequently asked “What’s the top challenge the corporate social strategist is struggling” and over and over, ROI comes up very high. To tackle this challenge head on, Altimeter has conducted a research project to find out how companies are connecting social technologies to the overall buying process as well as analyzing how they increase revenues for brands.

In conjunction with our recent conference on Social Commerce, we’ve now published the findings from interviewing top social commerce vendors and brands that are connecting commerce with social media. Our lead researcher analyst on this project is Lora Cecere who stems from Gartner and AMR and stems from Supply Chain Management, her and I will be doing a no-cost webinar to discuss these findings, I hope you join us.

This report is intended for you to use, share, and spread, under creative commons, feel free to embed it on your own blog, comment on it, and discuss. I look forward to hearing your feedback.

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19 Replies to “Altimeter Report: Social Commerce, How Brands Are Generating Revenue in Social Media, by @lcecere”

  1. Honestly I don't know what to trust about this research. I can't tell where research ends and opininon from Altimetere begins. The flaw are so numerous. Just one example, you are drawing conclusions on the phase of enlightened engagment based on 5% of the qualitiative respondents. Hmmm… that's TWO PEOPLE. Now, are you merely trying to fit responses into the agenda already set forth by your consulting group or are you delivering something new and meaningful? Did the research create the matrix or are you force-fitting research into a matrix Altrimeter had already developed? Honestly, I can't tell and it seems to be a pattern in the style of your “research” reports. My suspicion is you are using big name brands to try to justify loose assumptions in your pre-determined strategy and hoping people don't read the report very carefully.

  2. Jeremiah,

    How does this answer the ROI question? While this provides an interesting framework for thinking about the possible maturity cycle for using social commerce it really doesn't drive the discussion on ROI of social commerce. Sure social marketing sells but there are costs behind the process that this report doesn't cover. Without a cost basis you have no ROI because you haven't identified the I….

    I think a better descriptor would be the possible evolution of Social Commerce.

  3. Mike thanks

    Often, I'm asked by Corporate Social Strategists “We're struggling measuring and proving to internal stakeholders how we can generate revenues from social media”. We sought to find out specicially how brands are integrating social into the commerce space. Nothing proves better that 'return on investment' than top line increase in revenues, as some of these use cases have proven.

    In particular, I've been impressed with the case studies Bazzaarvoice has put forth, where they have a chockfull of examples with an increase in sales by integrating the customer voice.

    NEXT WEEK: I have a report coming out about the Corporate Social Strategist role and have real data from surveys on how these decision makers are measuring and how they are struggling to measure.

    Stay tuned

  4. Here is a radical thought. Suppose the ROI on social media isn't defined by generating revenue (as traditional marketing is), rather it is defined by its ability to reduce costs? I always tell my clients that the real ROI on social media happens when you get people you don't pay, to start doing your business for you (customers doing customer service, consumers doing your NPD and research etc etc). I think social media is a cost reduction play more than it is a revenue generation play.

  5. I once wrote a report that included results from 'a survey' and was torn apart by a PhD 'something' claiming my numbers were 'statistically insignificant', which they were, but I needed to write the report, and so I did. Analysis is 'over analysis' as the sample gets small.

  6. That's right Richard, it's a combination of top line revenue and bottom line costs. Right now, however, most companies are fixated on top line growth in revenues as often social media is managed by the marketing department. I have data to back this up next week.

  7. At the previous research company I worked with (very reputable) there were survey sample sizes of around 110 that were considered relevant, why? It depends on the market and what you're trying to answer. There is no standard data set size as it depends on your initial hypothesis, therefore the researchers “confidence levels” may vary depending on size. Lastly, in a new market, it's often difficult to do a large quantitative sample as finding the samples is challenging.

    With that said, Lora interviewed many folks in deep conversations to understand what's on their minds, I'm confident in her findings and stand behind it –hence putting it on my blog and my name on the cover. Seeing social+commerce come together is just starting, and as far as I know she's talked to more people in this nascent space than most.

  8. Hi Mark

    I was the primary analyst on this report. I value your feedback and wanted to respond.

    Based on Jeremiah™s current research projects, one of the most important characteristics for the effective social strategist is to empower a multi-disciplinary approach. In line with this premise, this report was not written for the marketer focused on social marketing; rather it was written for value chain leaders focused on social commerce. It is designed to help this audience understand the potential of social technologies to engage the digital consumer to improve their buying experience through the use of social commerce.

    Is the report lightweight? I am sorry that you think so. We tried to follow rigorous research protocols. Social commerce is new and evolving. It is very different than social media. The 54 interviews took four months to complete. The interviews were supported by the 123 quantitative responses, and the report was shared with 150 attendees at our Rise of Social Commerce event. It is hard to condense this much data into 14 pages. Please let me know if you would like to see the detail.

    Is the report a different view? Yes. It is about social commerce not social media. It is designed for a new audience. Social commerce is evolving quickly. There are no fixed and set processes yet.

    I would expect a social strategist to feel uncomfortable reading the report. The report was not written for the marketing audience. Instead, it is designed for a value chain audience to understand the potential of social media in a larger context of the evolution of social commerce. For this audience, social is very new; and as a result, explaining the concepts (social media extension to social commerce and why it matters) may seem elementary to an advanced marketing audience. Consider that this may be the power of the report.

    I am committed to unleash the understanding of social technologies to drive multi-disciplinary outcomes. I think that it is important that the power/understanding of social not be contained solely as marketing for the sake of marketing.

    Can we keep the dialogue going?

  9. You are so right. The best companies use technologies to balance growth and efficiency against the strategy. This is new for social, and will become more important as social technologies move past the walls of interactive marketing to enable direct interaction of the entire organization with the digital consumer.

  10. Yes, I would like to see the detail. You can email it to Thank you.

    BTW, you didn't really answer my questions, including, is it fair to draw a conclusion based on the input of two people? And I'll add this question: Jeremiah tweeted that this report was the answer to ROI in social media. Do you believe that is so?

    I'm not trying to be provocative. I'm just fed up with crappy data being broadcast onto the social stream with over-hyped claims and under-developed data.

    Thanks in advance for the report.

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