Two recent studies into social networking referrals and Facebook ecommerce left me slightly perplexed until the obvious answer smacked me in the face.

The first was a study by ForeSee Results, which showed that 1% of website referrals came direct from a social networking url, and that’s after a survey of 188 websites and over 295,000 responses from individual consumers. The networks included ranged from Facebook and Twitter to the likes of Foursquare, Scribd and Meetup. Without being able to dig into the study, there are some initial questions (Inclusion of Twitter clients, and wouldn’t Foursquare and Meetup be primarily for offline referrals?)

The second was a Forrester report into Facebook Ecommerce, which looked into 24 companies, with 7% citing social networks as one of their most effective sources of customers (90% cited paid search marketing). And a 1% click through rate compared to an 11% rate for email marketing. 24 companies is a pretty small sample group, but hey-ho….

Why am I perplexed?

There are a lot of examples of sites revealing their referral figures from Facebook and Twitter (and the social networks themselves are keen to highlight how much traffic they drive). Those figures are always a lot higher than 1% – and my own sites back that up consistently since they first launched (Obviously I can’t reference client sites or previous employers…). Some other social networks have also made decent contributions to site traffic (e.g. Stumbleupon, Reddit, and several others), and some have never appeared to my knowledge (I’ve yet to see someone appear on this blog via Foursquare for obvious reasons).

So besides the aggregation problem – why is that 1% number so low?

And given 600 million potential consumers on Facebook with an integral sharing and recommendation mechanism, why aren’t more companies able to convert customers? Email marketing will generally perform well as potential customers have actively signed up for information and offers, and 1% is still better than many advertising campaigns can achieve, but surely it must be possible to engage fans and potential customers in a more effective way…

'Rubbish' courtesy evilnick on Flickr (CC Licence)

Rubbish in, rubbish out?

I haven’t had access to either survey, but certainly the publicly-available summaries and reports seem to have skipped a vital question – how many of the websites and retails involved are actually doing a decent job of using social networks? Were all the websites involved actively updating, providing decent content, responding, providing good offers? Or were they like the majority of companies on social networks and generally doing an appalling job with a half-arsed attempt at updating once a month with some generic PR piece?

How many companies actually have a good integrated Facebook commerce offering? It seems as if Zynga have done pretty well out of Facebook commerce, and they aren’t alone, so why aren’t retailers capitalising? One obvious reason is that having an integrated Facebook shop is still rare enough to be really newsworthy – and although Facebook credits are available at the supermarket checkout, they’re still gaining acceptance as a retail currency. How many people who want to make a purchase will have a credit card available for an Amazon payment, or possibly a Paypal account, but would be slightly irritated by having to go and convert their cash into Facebook currency first? Or are finding that the brands they want to spend with currently just refer them to their traditional website, giving that extra click of delay and potential for a consumer to get distracted, have doubts, or just give up for some reason?

So what are we meant to believe when it comes to social networks?

The easiest answer is to believe your own experience and stats. Particularly if you’re a small company, you’ll want to focus on 1 or 2 places, and spend a decent amount of time using them before you can build up an accurate picture of whether they’re driving traffic or business.Use your gut feeling for what is likely to be a good outlet – you probably won’t be far wrong, and you can find quite a lot of info online to help back up your initial instincts.

For instance, I’d advise Facebook for general B2C traffic, and would suggest Twitter tends to be lower for most consumer sites, but contributes more in spreading information to other locations. Whilst for B2B, LinkedIn shouldn’t be underestimated, and the likes of Scribd, Slideshare etc all come into action.

The other answer could be to speak to someone with experience of similar campaigns for similar specific businesses – if you’re looking for advice on traffic referrals, look for an agency or consultant who can reference the numbers they’ve achieved, and can talk about how they did it, how they measured it, what worked, and importantly, what didn’t.

For instance, Youtube tends to drive very little traffic, unless you approach it in a very specific way and use specific mechanisms to encourage people to visit your site rather than the next related video of skateboarding kittens.

And always question surveys and reports which claim to provide a broad overview of what happens on the internet – the broader the information, the less use it tends to be. Measurement always trumps research – the important thing is to set up the measurement correctly!