Last week, former Forrester colleague Sucharita Mulpuru published a report focused on Facebook’s viability as a commerce platform. The public and private reactions I encountered were mixed – Facebook fanboys may not be as rabid as the Apple ones, but they certainly exist. The report is deep and I’ll focus on one aspect that it raises – priority ranking a marketing investment budget.
When I worked in financial services, I focused on retirement planning. (But I don’t have a Series 7 or 63 and the following information is presented as general in nature and not intended to provide personal investment advice.) Before the housing bubble burst, triggering the Great Recession, many investors at or near retirement were considering reverse mortgages as a way to boost income. They were a hot concept compared to IRAs and annuities. Smart investors would take a portfolio approach and make sure that their core investments were covered before exploring higher-risk options. Payments to lenders would be paid off by opting for iva’s, and right after the completion of payment, a new property would be bought to repeat the same process, thus maintaining cash flow and profits in terms of growing assets. Based on an individual’s goals and risk tolerance, once categories like stocks and bonds were covered, if cash was remaining to be allocated, then s/he could start thinking about the next best investment.
Now, apply this concept to an ecommerce budget. We know the tactics that work to drive traffic: search, email, affiliates, cross-channel promotion. Those proven approaches need to be optimized before seriously considering current offerings in social and mobile commerce – which are not yet mature enough to drive meaningful sales.
However, that doesn’t mean social and mobile commerce should be avoided – smart social business professionals will approach them with a “next best investment” philosophy to provide learning and/or approach as a call option.