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Archive for June, 2022

Matt Bailey – Social Commerce – A Lesson in Media Logic

Tuesday, June 28th, 2022

There are just some articles that catch my eye when either trawling through the various Search Marketing Journals, or I get sent to me insights from my colleagues and friends on the internet marketing circuit. One of those valued friends who can talk the numbers is Matt Bailey at Sitelogic Marketing in Canton Ohio. Shared below is an extract from a blog he wrote where his analysis of an article published by Business of Apps really puts things into perspective when considering Social Commerce

A Lesson in Media Logic
I have my own misgivings about social commerce – the direct purchasing of products through social channels. Sure, I’ve done it, but it is minuscule compared to my other shopping channels.

However, this has been hyped as the next big thing for more than the last decade, but it has never materialized as predicted. Being early in 2022, the predictions are rolling out for social commerce, as they have every year.

On this subject, I want to show you an example of clickbait, bias, and logical fallacies that are so prevalent in our industry, especially when writing about popular new trends.

This statistic and infographic were recently highlighted in a popular newsletter: 82% of shoppers use social media to make a purchase.

Social Commerce

Immediately, there should be warning lights and alarms sounding in your head. For starters, the headline is a bold statement. Anyone familiar with eCommerce marketing analytics will question this dubious claim.

The Logical Fallacy
Here’s the big problem. The data charts and headlines present a syllogistic fallacy. The data does not match, but it is used in a way to make the initial claim of 82% of shoppers using social commerce valid.

Here is what is being presented in the data:
Statement 1: 82% of survey respondents discovered and purchased a product on social media through their phone – at least once.
Statement 2: The majority of people prefer a combination of online shopping and in-store shopping.
Conclusion (Headline): Therefore, 82% of shoppers use social media to make a purchase

Do you see how statement 2 does not follow statement 1?

It is deliberate misdirection. It is associating two different activities in attempting to support the conclusion. The second dataset does not mention social commerce, it only asks about in-store, online, or both. This is called a non sequitur, as it does not logically follow from the previous data.

The Problem with Percentages
Now, we move to the article, where we receive some interesting statistics:

“Some 57% of the 1,000 customers surveyed said they previously bought something while watching a livestream on a social media app with 72% rating the experience highly.
A whopping 29% purchase items on social media at least once a week while 24% purchase more than once a week.”

This is the problem with percentages. Without real numbers as an anchor, percentages are abstract concepts. This is why decision-makers don’t get excited about percentages. Unless you show the real economic impact by moving away from the percentage and into real currency, it won’t move a data-driven organization.

Another signal that you might be reading propaganda instead of news is the choice of sensationalized adjectives. Regardless of this as a news article, blog, or otherwise, using “whopping,” “booming,” etc. to describe only 29% should clue the reader into the sensationalizing of this information.

Social Commerce Needs China’s numbers to be legitimate, but even then…
The article concludes with the statement that “Accenture predicts that social commerce could triple by 2025.” That is a very bold claim. Looking at the article cited, it is another article on the website, and the headline reads, “Social commerce to triple to 1.2 trillion by 2025.”

Wow. How will this happen? Well, of course, it can only happen if we include the entire planet!

You see, you can’t have a social commerce conversation without including China, the leaders in social commerce, however, the Chinese social media ecosystem is dramatically different than that in the US. In China, there is a single app, WeChat, which accounts for more than 30% of China’s GDP. It is the primary app for payments, delivery, food, travel, shopping, library books, bicycles, taxis, and more.

Even then, social commerce in China, which is a decade (or more) ahead of the US, generated $363 billion in 2021, but this impressive number is only 11% of the total retail eCommerce in the country.

By including China, India, and Brazil in these calculations, this engages in the logical fallacies of Incomplete Comparison (comparing two things that are not really related) and Argumentum ad Populum (appealing to the people) which presumes that something must be true because it is believed by many people to be true.

The Myth of Millennial Spending
One thing that comes up often in these types of articles is the emphasis on age and generational labels. This becomes a bandwagon effect (using popularity – everyone is doing this – as validation), but it also presents a loaded question fallacy to the reader.

A loaded question presupposes a claim so that it can’t be answered without sounding guilty, such as “have you stopped stealing from the company yet?” In this case, we are told that social commerce is growing, and it is growing among Millennials and Gen Z – who are spending the most. The loaded question puts the reader in the uncomfortable position of feeling guilty for not acting on this data, even though it is incomplete.

Why is it incomplete?
Here’s are a few facts that might blow your mind:
• Gen Z has $143 billion in spending power.
• People over 50 have $7.6 Trillion in spending power
Gen Z has less than 2% of spending power than people over 50

The survey does not include people over the age of 54
There were only 1,000 respondents to this survey. No data is provided about the survey respondents: no age, socio-economic status, location, employment, gender, or race. The reports that break down response by age have a maximum age of 54. Do they realize that more than a third of the US population is over 50?

This is the Fallacy of Composition and Division; It assumes that one part applies to the whole. By citing statistics of younger generations, it attempts to apply the conclusions in a blanket generalization.

In addition, by completely ignoring the shopping habits (and spending power) of older adults, these studies and articles do not communicate the entire picture of the eCommerce landscape. This is the Fallacy of Exclusion and Suppressed Evidence.

Consider the Source
This entire article summarizes the findings of the Social Commerce 2022 Report created by The Influencer Marketing Factory. That should raise an eyebrow. Could there be a potential conflict of interest or cherry-picked data? An influencer marketing company presenting information in a way that promotes their best interests? Then the “data” is presented as hard facts in articles, headlines, and industry newsletters.
Welcome to the modern news cycle in marketing media.

Social Commerce: The Smallest Slice of the Commerce Pie
Here’s why I chose this article and “data” to analyze. When evaluated through the lens of the entire market, this is promoting one of the smallest channels in the eCommerce market! When you exclude traditional online or in-store, older demographics, spending power, and focus exclusively on a method of commerce through social channels, you’ve drastically reduced your potential for reaching the largest, and most wealthy market on the planet. Even compared with China, the leader in this space, it shows a limited ceiling on this channel.

Develop your Media Literacy and Analysis Skills
Every headline, article, or promoted data is competing for your attention. The best thing that you can do is to educate yourself on how these fallacies work and insulate yourself from their claims. More than ever, all media needs to be evaluated with a critical and skeptical view. We live in an age of fake news, sensationalized headlines, emotionally-driven content.

Protect yourself by developing your data, logic, and literacy skills. You’ll find yourself to be more informed, unshaken by illogical conclusions, and happier. Happier because you will be more confident in your decisions and able to point to the logic behind them.

Matt Bailey his goal is to teach businesses how to make marketing logical, measurable and predictable (plan-able), so they can be profitable.

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