Coca-Cola (KO) Says Social Media Doesn't Sell; Everyone Agrees (FB)

March 19, 2013 12:01 PM EDT
To put it succinctly, are social media companies in dire straights?

AdAge highlighted a study run by beverage and snack giant Coca-Cola (NYSE: KO) saying that social media has "no measurable impact" on near-term consumer purchases. The company noted that online ads generated about as much revenue as TV ads.

The Coca-Cola research team did air a bit of caution with the data, saying it only covered "buzz," not sharing, video views or other aspects of social media. Data was at a 95 percent confidence level, but event going below that level showed that "buzz" affected sales by just 0.01 percent...virtually immeasurable.

This comes from a company which has about 61.5 million fans on Facebook (Nasdaq: FB), arguably one of the largest fan bases around.

Aside from Coca-Cola is another poll run on Yahoo! Finance. The poll asks: "Coca-Cola says social media buzz has no measurable impact on its bottom line. Does social media (Facebook, Twitter etc.) influence what you buy?"

By a wide, wide, wide, wide margin, the resounding answer was "Never." "Never" racked up 22,265 votes at mid-day Tuesday, garnering 87 percent of the total. Second was "From time to time" at 2,679 votes, or 10 percent of the total.

So, although the research team at Coca-Cola said it wasn't giving up on the "buzz" factor, those invested in Facebook, or taking a keen look at Twitter might want to take a second look at the prospects for at least one revenue stream. Until Coca-Cola and others can find out a way to squeeze a few more basis points in sales out of the platforms, it could be a rough road ahead.

Shares of Facebook are down 0.7 percent.

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