big online spenders embrace social technologies

8/8/2019 Big Online Spenders Embrace Social Technologies

1/4

Headquarters

Forrester Research, Inc., 400 Technology Square, Cambridge, MA 02139 USA

Tel: +1 617.613.6000 Fax: +1 617.613.5000 www.forrester.com

For Interactive Marketing Professionals

Includes data from Consumer Technographics

EXECUTIVE SUMMARY

e biggest online spenders are also highly involved in social activities, especially those that include

creating content and participating in dialogues. Retailers should take notice of this as they build

strategies. ey should use online brand monitoring to track the messages big spenders are seeing,

energize those customers with ratings and reviews, and add RSS to online retail sites to make it easier for

their customers to track whats on sale.

SOCIAL ACTIVITY PARTICIPATION AND ONLINE SPENDING GO HAND IN HAND

Do social activities such as blogging, friending on social networking sites, and reading ratings and

reviews matter to big online spenders? To answer this question, we analyzed the Social Technographics

Profiles of three segments of online spenders: high spenders ($500 or more), medium spenders ($100 to

$499), and low spenders ($1 to $99), all based on online spending in the past three months.1 We found

that (see Figure 1):

High online spenders use social technologies heavily. In general, this group immerses itself insocial activities; only 27% are Inactives, untouched by social technologies, and 68% are Spectators,

who consume social content such as blogs and discussion forums. High spenders also producecontent: One in four is a Creator, a person who blogs, maintains a Web site, or uploads audio or

video files. High spenders are also 54% more likely than average online Americans to participate in

Critic activities, such as discussion forums and ratings and reviews, which makes sense given that

the presence of ratings and reviews on eCommerce sites facilitates online purchases.2 Collectors, the

people who use RSS, tagging, and sites like Digg, make up 22% of high online spenders nearly

twice the population average.

Medium online spenders also participate in social technologies at above-average rates.Compared with typical US online adults, medium online spenders are nearly one-third more likely

to take part in any form of social activity. ey also over-index for Creator, Critic, and Collector

behavior, although not as much as high spenders.

Low online spenders are more likely than typical US online adults to join social networks. Approximately one-third of online consumers who spent up to $99 in the past three months belong

to networks like Facebook and MySpace. eir social participation in Creator, Critic, and Spectator

activities is only slightly above average. ese results may reflect the youth of this online group, so

February 15, 2008

Big Online Spenders Embrace Social Technologiesby Josh Bernoff

with Cynthia N. Pflaum, Sucharita Mulpuru, and Scott Wright
http://www.forrester.com/


2/4

2008, Forrester Research, Inc. Reproduction ProhibitedFebruary 15, 2008

2Big Online Spenders Embrace Social Technologies


marketers should take notice of their online behavior now; low online spenders can become

your most valuable customers as they mature.3

Figure 1 The Social Technographics Profile Of Online Spenders

Source: Forrester Research, Inc.44045

Index(All adults = 100)

Source: North American Social Technographics Online Survey, Q2 2007

Base: US online adultsHigh spenders spent $500 or more online in the past three months

Medium spenders spent $100 to $499 online in the past three monthsLow spenders spent $1 to $99 online in the past three months

Creators

Critics

Collectors

Joiners

Spectators

Inactives

High spendersMedium spenders

Low spenders

High spenders

Medium spendersLow spenders


Low spenders

High spenders

Medium spenders

Low spenders


Low spenders

High spenders

Medium spenders

Low spenders

US adults

107

124

135

110130154

87

123

185

124106

118

112129

141

8570

61

20%

28%

10%

31%

54%

23%

33%

14%

26%

63%

31%

25%

39%

22%

29%

68%

27%

38%


3/4

2008, Forrester Research, Inc. Reproduction ProhibitedFebruary 15, 2008



R E C O M M E N D A T I O N S

INTERACTIVE MARKETERS AT RETAIL SITES SHOULD REACH OUT SOCIALLY

The POST method for developing social strategy (people, objectives, strategy, technology) starts

with P: people.4 For interactive marketers at retail companies, the people lesson here is that online

retailers best customers are the most socially active. The next step depends on your objectives.

Marketers can:

Research their best customers by listening to the buzz. Marketers in online retail shouldinvest in brand-monitoring services, such as TNS Media Intelligence/Cymfony, Nielsen

BuzzMetrics, or Motivequest, to see what their highly active Creator and Critic customers say

about them in blog posts and discussion forums.5 While such targeted monitoring always

generates a biased view, in this case, its likely to yield insights into retailers best online

customers those who create content and voice their opinions online. Energize socially savvy customers with reviews and widgets. Studies by Bazaarvoice

show that ratings and reviews increase sales. This data reinforces that connection. Marketers

in online retail can also tap into the energy of their big spenders by creating shopping

widgets their fans can post in their social network profiles and pages, as well as blogs.

Cultivate broader brand awareness through the use of social networks. Should retailerscreate a presence in Facebook or MySpace? This strategy may help create awareness across

the board all three buyer segments demonstrate above-average network participation

but wont necessarily tap the energy of the biggest spenders as well as other strategies.

Social network participation resonates with the youngest online shoppers, so it s best for

retailers with products that appeal to younger audiences.

Get ready to deploy RSS feeds and tags. In absolute terms, the number of Collectorsamong online retail customers is low. But relatively speaking, participation is high, especially

among the biggest spenders. RSS feeds will grow in importance as consumers embrace

them within their customized portal pages. More retailers should emulate Burpee and its

Seed Feed, which draws on the enthusiasm of its best gardening customers. Or supercharge

the search on your site by using the social power of tags, allowing customers to create a

classification system that works the way they think, instead of using the rigid classifications

found in retailers databases.


4/4



Forrester Research, Inc. (Nasdaq: FORR) is an independent technology and market research company that provides pragmatic and forward-thinking advice toglobal leaders in business and technology. For more than 24 years, Forrester has been making leaders successful every day through its proprietary research,consulting, events, and peer-to-peer executive programs. For more information, visit www.forrester.com.

2008, Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRadar, and Total Economic Impact are trademarks ofForrester Research, Inc. All other trademarks are the property of their respective companies. Forrester clients may make one attributed copy or slide of each figurecontained herein. Additional reproduction is strictly prohibited. For additional reproduction rights and usage information, go to www.forrester.com. Information

is based on best available resources. Opinions reflect judgment at the time and are subject to change. To purchase reprints of this document, please [email protected]. 44045

ENDNOTES

1 For a company determining its online social strategy, Forrester recommends looking at the Social

Technographics Profile of its customers or target audiences to better understand how they use social

technologies. e profile examines the prevalence within a population of six different social participation

groups: Creators, Critics, Joiners, Collectors, Spectators, and Inactives. See the April 19, 2007, Social

Technographics report.

2 Forrester evaluated 4,000 reviews in the Electronics and Home & Garden categories on the Amazon.com

Web site and found that more than 80% of the consumer reviews were positive, and that shoppers generally

considered the existing negative reviews helpful. See the January 10, 2007, How Damaging Are Negative

Customer Reviews? report.

3 e average age of US low online spenders is 39, while the average age of medium and high online spenders

is 43. Source: North American Social Technographics Online Survey, Q2 2007.

4 Forrester recommends using the POST method, a four-step process that helps determine a companysonline social strategy. e steps include: 1) people, or review the Social Technographics Profile of your

customers or target audience; 2) objectives, or decide what your goals are; 3) strategy, or determine how

your objectives will change your relationships with your customers; and 4) technology, or choose the

correct technologies to use. See the October 9, 2007, Objectives: e Key To Creating A Social Strategy

report.

5 With the introduction of social technologies and consumers seizing more power in the marketplace,

companies need to monitor the diverse and growing group of influential voices online. To find out how

emerging technologies that address this challenge stack up, Forrester evaluated seven leading brand

monitoring vendors against 56 criteria. See the September 13, 2006, e Forrester Wave: Brand

Monitoring, Q3 2006 report.
http://www.forrester.com/go?docid=42057&src=44045pdfhttp://www.forrester.com/go?docid=42057&src=44045pdfhttp://www.forrester.com/go?docid=40649&src=44045pdfhttp://www.forrester.com/go?docid=40649&src=44045pdfhttp://www.forrester.com/go?docid=43656&src=44045pdfhttp://www.forrester.com/go?docid=39442&src=44045pdfhttp://www.forrester.com/go?docid=39442&src=44045pdfhttp://www.forrester.com/go?docid=39442&src=44045pdfhttp://www.forrester.com/go?docid=39442&src=44045pdfhttp://www.forrester.com/go?docid=43656&src=44045pdfhttp://www.forrester.com/go?docid=40649&src=44045pdfhttp://www.forrester.com/go?docid=40649&src=44045pdfhttp://www.forrester.com/go?docid=42057&src=44045pdfhttp://www.forrester.com/go?docid=42057&src=44045pdf

big online spenders embrace social technologies

Documents