Sixty-two percent of online retailers say their return on investment is either unaffected by social media or that the benefits remain unclear, according to Forrester Research's The State of Retailing Online 2011: Marketing, Social & Mobile, which was released earlier this month to members of Shop.org, the online retail division of the National Retail Federation.

For those of us working in SEO and social marketing the research results were hardly a surprise. After all we have seen the likes of this before with SEO which underwent a period of ‘giving uncertain returns’ when compared to traditional marketing and advertising only for the proverbial penny to finally drop and SEO to become the core of online marketing.

The last report to come out of Agency GroupM and Comscore stated that 58% of consumers start the purchase process with search, outpacing company websites (24%) and social media (18%). This puts search at the heart of any company marketing worth its salt and begs the obvious question: ‘why is social marketing not working?’.

The glib answer is, it is working but you just can’t see it. You’re reading this however because you want something a little more than glib so let’s go and explore the real reasons behind figures designed to sink the heart of any company social marketing manager.

Social Marketing and what it does

Back at marketing school the first lesson learnt was that word-of-mouth publicity was worth its weight in platinum. This personal approach to marketing was always super-difficult to achieve and provided the best conversions in terms of time and effort spent. After all, who amongst us has not considered making a purchase on the recommendation of a friend?

It is a small leap of logic to go from that personal approach to the digital equivalent which is social marketing. The logic is irrefutable enough to convince us that not just that it’ll work but that it has to work and that’s exactly where the problem lies.

Social marketing, for all its seemingly similar approach to personal word-of-mouth publicity is not the same thing. Setting up Facebook profiles and recruiting thousands of ‘friends’ does not automatically mean that the moment you recommend something those who see it will rush out to buy it. Having a Twitter account which is read by tens of thousands of followers does not automatically give you the ability to sway their purchasing decisions.

The reason this is not happening is because the marketing we put in place on social networks is perfectly logical but the mechanism (for lack of a better word) we employ when we make a purchasing decision is anything but. Consumers buy through emotion. We relate to brands based on how they make us feel and we buy things ourselves because of the way they affect the way we see ourselves.

This emotional approach to buying goes so deep as to extend to, even, basic purchases such as food and coffee. The reason we go to a Wall Mart or Costco, the reason we buy from Seers or Waitrose, the choices which make us patrons of a particular chain of department stores or an eclectic upmarket establishment are purely emotional, restrained only by a basic principle: what is in our wallet.

When we understand this we also understand that Social Marketing, in its present form, is less about making people buy or even make them think about buying and more about fostering the kind of relationship which may lead to them thinking about buying.

In short, although Social Network Marketing may appear, at first glance to be the digital equivalent of that all-powerful word-of-mouth publicity, in reality it is really nothing more than a digital handshake, an introduction of sorts. Just like in the real world an introduction has to go through the stages of someone shaking your hand, finding out something about you, getting to know you a little bit better and then, finally, taking your recommendation to buy something, so does social marketing on the web need to go through the same process.

Social Marketing is an Introduction

This makes every effort you put in place on social marketing networks nothing more than a handshake with the potential to lead to something more. The reason most social marketing today is perceived not to work is because those who apply it do so thinking they are selling. They are not. They are becoming better known and if the process of getting to know them better is one which introduces products and services which have real foundations and solid logic behind them, then, they shall lead to sales, brand awareness and eventually a bigger share of the market. Not before.