Jonathan Greene

Social Media Marketing: Is in-stream e-commerce possible?

April 4th, 2013

E-commerce on Facebook was a horrible flop. That is to say, many brands found over the course of several years of experimentation the return on investment in terms of dollars spent developing their online storefronts didn’t measure up, so many of the most popular retail brands – such as The Gap, JC Penney and Nordstrom – were subsequently forced to close their Facebook shops. A recent study by W3B suggested just 2% of people with a Facebook account have made a purchase on the social network.

Yet, simultaneously, e-commerce sites in general (Amazon,, etc.) have posted impressive growth figures.  For example, holiday e-commerce sales were up 13% to $34 billion in 2012.

Why is it that some sites sell, and others don’t? In particular, why are social media sites so horrible at conversion? I believe it’s a phenomenon related to (what I refer to as) the locus of conversion.


Facebook is a pub crawl

The environment on Facebook yields similarities to the dynamic of a pub crawl. Surrounded by acquaintances and, yes, a few old friends, we dive into topics of various levels of seriousness ranging from the patently absurd, to the politically charged before wandering aimlessly from topic to topic.

We do so without expecting to be inundated with marketing messaging, much the same as we would expect to not be rudely interrupted by an insurance salesman while we were in the middle of telling our best frat house story from college at the local bar.

However, if you are able to be interesting enough to become the topic of our buzzed conversation, I might be willing, in that instant, to purchase your product. I don’t want to leave the bar, mind you. I just want a magical product genie to appear and offer your purple widget to me at a reasonable price. If I don’t have to leave my bar stool, you just might have a sale.


Locus of Conversion

Based upon that little soliloquy, you begin to see the basis for the concept of locus of conversion. It’s not that I don’t like your product or want to purchase it, it’s that I’m miffed about you showing up at the bar and trying to sell it to me while I’m telling drinking stories – hence, direct in-stream product pitches on Facebook usually fail horribly.

Once I hear about a product that I like, it still isn’t cool enough to get me to stand up from my bar stool, walk to the parking lot, drive to your store and purchase your product – this could be a metaphor for having a store in one of your Facebook tabs.

But, if you were able to get the store to my barstool, you just might win. That’s locus of conversion. It’s not so much about the product as the place.

Let’s flip the switch and make this analogy practical, shall we? If I am surfing through my News Feed and come across a hard pitch from a brand saying ‘Buy my product right now,” I’m likely to ignore it, or worse.

If I come across the same product recommended by a friend whom I trust, I might decide to give the product a try. But, the likelihood of me leaving the content stream, searching out the product page and converting through the tab-based shopping system is relatively small.

If, however, I were able to use dynamic technology, similar to a hash tag for example (let’s just use a ~ for now), to trigger an immediate purchase transaction, I might be a buyer.

There are companies currently performing similar feats of amazement right now. However, these companies require a product offering to be registered and only work in the context of certain posts sponsored by the seller (for those interested in the technical machinations, here’s information about the technology behind a current in-stream e-commerce technology).

Essentially, the locus of conversion has changed from the tab to the stream, but only on the terms of the seller. Imagine if the ~ allowed us to conduct this transaction in any content stream. The technology exists to do this right now, and these innovative companies are only one generation away from realizing the potential of their brain trust.



Jim Bob, my cousin from Arkansas, makes a post about a purple widget he loves. I read about it, see Jim Bob’s sterling recommendation and decide to purchase the same purple widget. I type a comment directly in Jim Bob’s content stream that says:

~Buy This

Immediately, because my banking information has already been registered with the company administering the ~tag, I receive a private message asking me to confirm my purchase of one purple widget at $12.99. The technology for performing the task is no more advanced than that which Twitter uses to compile tweets using certain hashtags.

The problem for the shrewd marketer becomes how to export properly optimized conversion tidbits to the social community at large in such a way as to trigger in-stream conversion. And then, alas, we can throw attribution theory and ROI tracing problems to the curb, at least for a certain segment of products and services, because we will know exactly how much ROI our social efforts are driving. Oh, happy day.


Related Resources:

Social Media Marketing: Social metrics from “likes” to ROI

Social Media Marketing: Michaels Stores increases Pinterest board followers by 86% with contest

Social Media Metrics: Three touchy-feely numbers to help you benchmark and improve

Social Media Marketing: Penguin’s Twitter book club nets 14 million impressions for its hashtag

Categories: Marketing Tags: , , , ,

  1. April 9th, 2013 at 04:55 | #1

    You cannot promote directly on Facebook. It is more than spamming. May be that is why many online marketers fail in Facebook marketing. I would suggest people first know at least some tricks of social media marketing before they initiate it for their businesses or products.

  2. April 24th, 2013 at 02:07 | #2

    Henry Smith is absolutely right; you cannot use Facebook or any social media for direct promotion. Social media sites can be used to engage with customers by sharing useful information with both prospective and existing customers. Hence, business owners can do some research before using a social media site for promoting your business. Identify a suitable social media site to meet the needs of your particular business and then develop strategies based on that.

  3. April 24th, 2013 at 08:51 | #3

    Not sure if you mean “can’t” as in shouldn’t, or as in you’re literally not allowed to promote on Facebook. Obviously the recent rule changes related to brands mean you can promote directly on the platform.

    So while you bring up a valid point — what factors should marketers consider when using social media platforms to drive revenue? — my goal was to bring up a different consideration in this blog post. It’s not about brands promoting themselves. It’s about hypothetically enabling people to interact with product suggestions from friends with a purchase directive in-stream.

We no longer accept comments on the MarketingSherpa blog, but we'd love to hear what you've learned about customer-first marketing. Send us a Letter to the Editor to share your story.