Social Commerce vs Social Advertising

Since the rise of social media, there have been many, ever evolving, definitions of Social Commerce. In the beginning, Social Commerce was typically defined as recommendations of products by friends that eventually led to sales of said product. There have been many iterations of this, from peer recommendations, social curation, influencer commerce, to social shopping. This evolved over time as businesses, merchants, non-profits and brands started sharing links inside social media. Media platforms started to develop business models to augment this sharing to track, measure, and target optimize these links.

Social link sharing that eventually leads to a purchase is what we now often define social commerce as. The problem with this, and previous definitions, is that it’s not actual commerce. It’s merely a link that attempts to redirect one’s attention, and browser, away from a social experience to a traditional e-commerce experience. If a consumer can not pay in-stream on the social network, it’s not social commerce, it’s advertising. This important distinction has ramifications for conversion percentages, user experience, and of course, data.

There have been many studies that attempt to measure the effectiveness of social commerce advertising. The problem with each of these studies is that there is no way to close the loop. It requires insight into the complete commerce cycle from listing – to sharing – to payment – to fulfillment. What results is a bunch of guesswork analysis with mixed results. One thing intelligent folks can agree on is that as the volume of content exponentially increases, the effectiveness of attention re-routing (Advertising) inversely decreases. This idea is succinctly described by Albert Wenger in his post on Attention Scarcity. This concept is, I hope, described by the following analogy:

You’re at a party having a conversation with a friend when a stranger abruptly interrupts and asks you to walk across the street to purchase a cupcake after filling out some brief paperwork. Even though homemade cupcake’s are the bomb, the chances that you’ll do this are minimal. It’s all the way across the street and there is paperwork involved. Plus, you’re in a deep discussion about The Yeti. In short, there’s way too much friction involved in the transaction. However, if that stranger was standing next to you, and all you had to say was “gimme”, you’d not only take the cake, you’d eat it too.

The reason? It’s a way better experience that requires virtually no work or attention on your end.

By removing the friction of shopping carts, checkout processes and arduous forms, without rerouting a consumer’s attention, conversion dramatically increases. Fewer clicks, less typing, less thinking, more instant gratification, more sales. The same concept works for other types of transactions, such as fundraising andgiveaways. The chances of a donor giving your non-profit money is reduced by each step the donor must take to do so. This concept is further amplified when it comes to mobile. Better ux on mobile is paramount. Nobody wants to fill out long forms on their phone with fat fingers.

In terms of data, much like conversion, when the social platform is disconnected from the commerce platform there is a chasm the data cannot cross. For social media platforms that have built a model around advertising, this is a sales problem. You cannot tell a brand manager with accuracy the conversion percentage they can expect from advertising within your network. Further, you cannot deliver the holy grail of data to the marketer: Social Identity tied to purchase intent. You have no lens into the transaction. Only when the chasm is closed, and payment and fulfillment is seamlessly baked into the social platform, can you close the loop and turn low value advertising into high value transactable commerce.

This is exactly what we’ve done at Chirpify. We’ve enabled businesses and consumers to buy, sell, donate and pay directly in-stream on social media. These transactions are social, device agnostic, frictionless, one step payments that happen without redirecting a consumer. We’ve tied social identity to a portable wallet, making payments effectively disappear. As a result we’ve seen conversion percentages double that of traditional e-commerce, and our listings have a much higher engagement rate than social ad units. Further, we’re able to close the loop for marketers on metrics, and more importantly, purchase data tied to social identity.

When you turn ads into conversational commerce, frictions decrease, conversions increase, and consumers will like your business more for feeding them the cupcake.