Why Walmart Took Over Facebook for 72 Hours

Walmart shut out the competition and purchased 50 million Facebook ads over Black Friday weekend -- all without proof that doing so would necessarily help boost sales. Huh?

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Throughout the 2012 holiday season, Walmart is running a staggering two billion ads on Facebook. Some 50 million Walmart ads popped up on Black Friday weekend alone, when the world’s largest retailer shut out the competition and bought up all the Facebook ad space available in advance. Given the comprehensiveness of the campaign, you’d think there was some proof that blanketing Facebook with ads yields stronger sales, right?

Interestingly enough, no, there’s not much proof out there that this is the case.

A recent Wall Street Journal piece shed light on how the biggest-ever, specially-designed mobile ad campaign on Facebook took place over Black Friday weekend, when Walmart monopolized the social-media site with a whopping 50 million ads during a 72-hour period. The campaign was in the works for months prior to launch and went live during what is arguably the year’s most popular and frenzied shopping weekend.

So did the campaign work? On one hand, Walmart marketing chief Stephen Quinn told the WSJ that he “never saw this level of engagement” coming as a result of any other digital ad initiative. On the other, it’s unclear whether the campaign yielded stronger sales. In this case, “engagement” is gauged by things like how the ads attracted over 100,000 comments from people who presumably saw the ads. But many of those comments came from consumers who were “engaged” only to the point that they were compelled to complain about unwanted ads popping up on their mobile news feeds.

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Thus far, there isn’t much indicating that social media ads lead to sales for retailers. So why would a retailer such as Walmart bother buying into a strategy that’s so unproven, especially on the grand scale seen over Black Friday weekend?

What we know for sure is that retailers feel like they have to create a strong social media presence. Analysts and stores talk frequently about how they must reach shoppers at every “touchpoint” (brick and mortar, mobile, tablets, PC screens, etc.), and clearly, it’s necessary to use social media to hit several of these points. In a Deloitte survey, nearly half (48%) of consumers said they expected to use social media to help them make decisions regarding holiday shopping—researching ideas, gathering info about discounts, and so on. When a survey from BDO asked retailer chief marketing executives how they’d be promoting their holiday campaigns, 99% said they’d be using Facebook. The experts at Adobe Digital Marketing, meanwhile, have predicted that social media referrals to retail sites would double this holiday season, compared to that of 2011.

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But does an increased presence by retailers in social media actually boost sales? The answer’s not clear. An IBM Digital Analytics report indicates that social media’s impact on sales appears to be minimal:

Shoppers referred from Social Networks such as Facebook, Twitter, LinkedIn and YouTube generated 0.41 percent of all online sales on Cyber Monday, a decrease of more than 26 percent from 2011.

The results of a study published by Forrester in the fall also came to the conclusion that in terms of overall online purchases, “less than 1% of transactions could be traced back to trackable social links.”

Data like this makes it sound as if it’s not particularly worthwhile for retailers to put much emphasis on social media. But while it looks as if Facebook and the rest don’t have much direct correlation to online sales, it’s much harder to determine whether or not shoppers ultimately wound up shopping in person at Walmart or another store over Black Friday weekend (or even days or weeks later) due to something they glanced on Twitter or Facebook. In some cases, shoppers themselves may not be fully aware that they were influenced in such a way by social media.

(MORE: Study: Posts on Facebook Almost Never Lead to Retail Sales)

“Like advertising on TV, it’s really hard to measure the effectiveness of getting your brand out there on Facebook,” says Sucharita Mulpuru, a retail analyst with Forrester. “The types of metrics mentioned in the Wall Street Journal story are loosey-goosey things like the number of comments, which don’t necessarily translate to sales.”

As a Bloomberg News story pointed out, the old-fashioned, decidedly unsexy marketing strategy of retailers sending e-mails to potential customers blows social media away in terms of generating sales:

Measured by sales per dollar spent, e-mail outperforms social-media advertising three to one, according to the Direct Marketing Association, a trade group founded to provide accurate marketing data.

What’s noteworthy is that e-mail campaigns themselves judge success on a scale of small percentages, with a successful email being opened by maybe 20% of the recipients, clicked through by 5%, and resulting in purchases by perhaps 1%.

While the verdict is out on how sales are impacted by periodic social media campaigns, even less is known about the effectiveness of efforts like Walmart’s unprecedented, all-encompassing takeover of Facebook ads over Black Friday weekend. “The idea was to blitz everybody starting on Thanksgiving, with the hope that it would drive sales,” says Mulpuru. “But this experiment was just that—an experiment—and we don’t know if it drove the sales needle at all.” If nothing else, Mulpuru agreed, Walmart’s blanket strategy succeeded in silencing the messages of competing retailers that might have otherwise been advertising on Facebook during the epic shopping weekend.

In many ways, the world’s largest retailer has demonstrated a preference not for merely posting strong sales, but for thoroughly dominating the competition. One of the reasons Walmart staggered its sales in physical stores for Black Friday, starting at 8 p.m. on Thanksgiving night and continuing on with door buster deals beginning at 10 p.m., midnight, and 5 a.m. on Friday itself, is that by doing so it would make it more difficult for consumers to shop anywhere else for quite a while. In a conference call held in advance of Black Friday, Duncan Mac Naughton, Walmart’s chief merchandising and marketing officer, suggested that shoppers arrive at a Walmart on Thanksgiving night to take advantage of various shopping “events,” and then “take a quick nap and come back” for the pre-dawn hour sales.

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“Going all in, so to speak,” with the Black Friday Facebook ad campaign, to quote Stephen Wyss, a partner in BDO’s Retail and Consumer Products practice, is very much in character for Walmart. And while it’s extremely difficult to measure such a strategy’s value for the retailer, Wyss says it may be slightly easier to gauge the impact of an “all-in” campaign compared to the more typical, piecemeal ad placements.

More importantly, the Black Friday experiment could spur on other retailers to use social media in new and bigger ways. “This could be a watershed moment for Facebook,” says Wyss. “Other retailers are going to be watching closely and learning from Walmart’s strategies. Facebook wants to show that it’s worth the investment for advertisers—that what can work for Walmart can work for other retailers.”

The question that still remains, though, is to what extent, if at all, the tailored-ad blitz on Facebook truly worked for Walmart.

13 comments
FamkeStewart
FamkeStewart

I guess Facebook posts are easier than good business practices.

No deal, Wal-Mart.

AaronHeathGottsch
AaronHeathGottsch

If Wal-Mart would just invest a small portion of the money they spent on those facebook ads into payroll then maybe they could have more clerks to check customers out.  Instead of making people mad waiting to check out, and walking off tired of waiting in line or not going there at all.  Beef up your check outs and clean your bathrooms.  Greed if you ask me..... and i just imagine that most people that went to Wal-Mart after seeing the facebook ads were probably going to go there anyway.  Kind of a waste is what I am led to believe.  If you're that big already and people visit your store daily, why waste profits on ads.  Clean the store, more checkers...period.  Oh and Stock more leap pads.

IsidoroRubioM
IsidoroRubioM

So this means that wallmart has the muscle ($$$) to buy all the advertising space and block competitors. It is an agressive approach to advertising on FB,  as agressive as wallmart's sale/pricing strategy. But, it is definitely not engagement.

adreimanusios
adreimanusios

Another reason to not keep using facebook. Walmart ? thanks, but no thanks.

dkyguy1995
dkyguy1995

I don't even see ads. AdBlock plus, it's a lifesaver

MJA
MJA

I will ignore Walmart............prove that ad is not everything...................

AdeyJarvis
AdeyJarvis

firefox > tools > add-ons >  search all add-ons > adblock > adblock plus > install

Daniel_P
Daniel_P

Hmm, I don't think I've been on Facebook for a couple months, were there any good sales going on?

lainey.jane
lainey.jane like.author.displayName like.author.displayName 2 Like

Big retailers are totally missing the point on how individual USE social media to make decisions about shopping.  The questions that researchers ask are too generic. People are using social media by asking friends and family about products and tips on where /what to buy, not ads.  I can't think of the last time that I clicked on an advert from Facebook or any of the sites I frequent. 

There is such a thing as information saturation.  I already KNOW about Walmart.  I can already guess that if I think they sell something, they will have close to if not the lowest price.  Why would I bother to look at their ads?  So now all they've done by innundating my electronic life, is irritate me.  Their money would be far better put to use LISTENING to what is trending or being talked about on social sites to help them make product procurement decisions than by screaming out to the world that have more money than God and can take over whatever electronic site they wish. 

And frankly, even though this got them some publicity, I am still not inclined to shop there anymore than I was before.  The added publicity only works well when you are a relative unknown or a "used-to-be" kind of personality / organization.

MQ
MQ like.author.displayName like.author.displayName 2 Like

They can advertise as much as they like I still won't shop there. 

DBarberHotnuke
DBarberHotnuke

This is PRECISELY one of the many, many reasons Wal-Mart is ABSOLUTELY EVIL

rjsigmund
rjsigmund

it got them a free ad in the Time business section..