Scaling Social Commerce Share of Voice

How CPC Budgets Win The Next Generation of Shoppers in Social Influence

We’ve all watched Millennials, Gen-Z, and Gen-Alpha engage with the latest social media trends and follow influencers we’ve never heard of. The older among us are left to wonder, “Who is this person, and why are they so popular?” Maybe we’ve even caught ourselves at some point awkwardly trying to follow the latest viral craze, only to realize it’s difficult to keep pace with how fast things move.

The changes occurring in the social landscape aren’t just impacting how today’s young adults interact with each other—they’re also transforming how younger generations think about, shop for, and interact with brands. Younger generations experienced critical portions of their youth online, both downtime and key milestones, during the COVID19 pandemic as they navigated the ‘new normal’. The effects of experiencing these moments through social media cannot be underestimated. Social norms have changed, and with that come new buying habits, shorter attention spans, and a fractal of niche communities with hard-to-predict preferences.

Prioritizing Social As a Channel

Today 1-in-3 young people are making purchases through social media every week and more than half of GenZ now use social media for shopping inspiration. Social commerce is an important channel for shopping and as we outlined in our September post about Capturing the New Generation of Shoppers, influencer marketing presents a unique opportunity for brands and retailers to connect with the next generations of shoppers on their terms.

Retailers should be optimistic about the future of social commerce as a driver for online retail shopping. Among the newest generation of consumers, those aged 18-34, 65% say they are likely (either somewhat or very) to make future purchases online through social media platforms.

So, what does this mean for retailers trying to keep up? How can businesses adapt to meet the unique demands of today’s evolving shoppers?

The Voice of Creators

While younger generations occasionally turn to traditional sources of legacy media outlets or commerce content (such as review sites), more often than not, their inspiration comes from social media—and particularly from influencers. Social influencers, in many ways, function like mini-publishers. We refer to them as ‘Creators’ because they create compelling content that attracts engaged followers. Each creator has a loyal audience who follow them not just for entertainment, but for their opinions as well as recommendations on products, trends, and lifestyles.

Social creators develop a personal connection with their followers that is authentic and relatable; qualities that imbue trust—important for winning customers. Successful creators can also develop content that drives aspirational ambition among their followers. This combination of delivering trust and aspiration means creators have far greater power to shape purchase decisions than other marketing channels. Their influence is powerful because their followers are genuinely interested in what they endorse, making them key drivers of younger consumers’ behavior. Additionally, influencers gain even more visibility as social media algorithms actively promote their content, amplifying their reach and making their recommendations even more impactful.

Finding Voices that Perform

Not everyone can (or should) partner with a mega-influencer. While finding an A-list celebrity to promote your products on social channels might seem appealing, creators at that level need to cater to a wide audience. They put a lot of energy into entertainment content and growing their own brand. Mega-creators may not focus on content that aligns closely with specific retailers’ needs. It’s this type of focused category specialization that drives higher social commerce conversion rates, and it’s what smaller creators can do as they build their social business. Smaller creators specializing in a narrower content focus can actually drive good performance in direct-to-consumer ecommerce.

So, how do brands find a cohort of smaller performance-minded creators to promote their offers? Picking the right lineup of influencers, effectively briefing, pricing, and interacting with them is a daunting task. As the influencer market is rapidly evolving, a wide range of platforms exist. Most brands prefer to partner with a network that handpicks influencers with affiliate experience and proven experience driving sales of products in their vertical. This simplifies the process for both the retailer and the influencer, enabling influencers to seamlessly incorporate product promotions into their posts, while maintaining their authenticity and credibility with their audience.

With the ShopYourLikes (SYL) social commerce platform, a Connexity brand, we cultivate category segmented communities of smaller creators. These creators specialize in content that converts followers into customers. In fact, SYL creators will frequently deliver new customer performance for a brand on the order of 2X the new customer acquisition rate seen in other channels.

Incentivizing Creator Voices

There are two primary ways that a commission is paid for a retailer promoting in social media. Nearly every influence marketing platform offers access to creators with a standard affiliate commission paid out in Cost per Action (CPA). Many (even most) creators are familiar with the CPA model. It’s easy for the creator to understand their payout as a percentage of each sale. However, returns after purchase will impact the creator’s total earnings and because of this their final payout on sales often takes months to reconcile. Nonetheless, CPA is a commission structure that will result in relatively consistent sales over a long period, but CPA may not incentivize creators to prioritize new promotional content, especially if sales and payouts are slow to occur.

Brands and retailers aiming to more rapidly scale results and to compete for limited share of creator attention–and ultimately a greater share of voice among followers, commission creators on a Cost per Click (CPC) basis. With CPC, the creator earns a commission for every click to the product offer from their content. While that sounds expensive, every per click commission is smaller than a CPA commission. CPC commissions are also optimized to align to the retailer’s performance goals and importantly are also adjusted based on the performance of each creator’s content conversion rate. CPC commissions help creators to earn more regular income and can incentivize creators to prioritize new promotional content where they have the opportunity to earn more.

When examining top performing retailers offering CPC and CPA commissions, our ShopYourLikes data shows that offering CPC is a clear incentive to creators generating promotional content. On average across nearly the last 24 months, 70% more creators on average generated content promoting brands with CPC offers than CPA offers.

When it comes to sales performance, CPA promotion can result in relatively consistent sales over time, with expected increases over holidays–periods where creators can benefit from the convergence of shopping demand and temporary increases in CPA commission rates. The chart below illustrates these results using a large multi-category retailer offering CPA commissions as an example.

But to examine performance of sales growth from CPC commissions, we need to adjust the scale of our perspective. Plotting the same CPA retailer, but adding to our picture a similarly sized competitor offering CPC commissions demonstrates how CPC drives a significantly larger scale of sales over the same period, with an 11X growth in monthly results from month 1 to month 24. You also see in this chart the effects of CPC commissions incentivizing new strategic high CVR creators to promote the retailer, ultimately resulting in a 9X increase in monthly average sales per creator.

The Key Takeaways

Social marketing is a channel of increasing importance. Because of the significant growth in this advertising format and the growing attention to social commerce among younger shoppers, it’s maybe the primary channel ecommerce advertisers should be prioritizing over the next several years. As such, you can bet that the largest advertisers are already paying attention. They’re building relationships with performance-minded strategic creators and grabbing as much share of voice as they can.

You need to enter the social space with the intention to compete. You need a plan to actively gain share and scale growth, not just passively wait for it to happen. That means you need to capture share of attention among creators. Offering competitive commissions with a CPC budget gives you the best chance to make progress in this coveted space.