Last year a lot of companies jumped on the social media train but failed to see a return in investment.  This year more and more companies will start to really look at how they can make money through social media and you’ll hear the term social commerce mentioned a lot.  This is really about a mix of social media and e-commerce.

An example of social commerce is working on Facebook.  Over the last year, in particular, lots of companies have started to create a presence on Facebook and built up some fans.  When they ran promotions they typically directed users off Facebook to their website.  But users don’t like this and conversion rates are typically poor.  This year more and more companies will start to add their shop to their facebook page so you can shop there and then.  So now all of a sudden Facebook is a social commerce platform.  Over time companies will question the value of their website when they see the power of social selling.

There’s an Irish company called Owjo that has functionality that allows you to set up a shop within facebook in a couple of hours.  They even have a payment aggregation agreement which just means they can take money on your behalf and you don’t need to set up a merchant account.  If you want to see an example of the shop check out Elvery’s Facebook page.

Have you been hooked on Citydeals yet?  These are daily deals provided to different cities around the world with significant discounts.  The company that set up citydeals is called Groupon and they are less than 2 years old and recently Google tried to buy them for 6 billion.  Of course they refused this offer!  Group is a social selling site.  Over 45% of their traffic comes from Facebook so you can see the power of conversations on facebook. People are sharing out information related to the deals and this is driving significant traffic to their site and resulting in significant business.

What about other social media platforms?  At the end of the day they all have to make money, they can’t rely on Venture Capital funding for good.  So lots of them will go out of business, some will be acquired and some will thrive.  For example, LinkedIn is a business social network, will they sell products at some stage?  Yes of course they will, it’s only a matter of time.  LinkedIn is making a lot of money and companies like that don’t stand still and want new revenue streams.  It makes perfect sense to sell training, consultancy, business books, research reports and much more through LinkedIn so it’s only a matter of time.  They have already expanded your company presence in LinkedIn to allow you to display some of your products and services so it’s obvious where this is going.

Social Commerce has been around for many years, just look at Amazon (a social network of book lovers), and eBay (a social network of buyers and sellers of products), but this year you will see the newer social media platforms introducing ways of making more money by selling products and services.  This is the year that people that think social media is a fad will change their mind.

Have you any good examples of social commerce that you’d like to share?