Coca-Cola (KO) Says Social Media Doesn't Sell; Everyone Agrees (FB)
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Price: $40.68 +0.84%
Overall Analyst Rating:
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Dividend Yield: 2.9%
EPS Growth %: -48.3%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 2.9%
EPS Growth %: -48.3%
Trade KO Now!
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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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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