The Undercover Arms Race between Media and Commerce Platforms

Jul 24, 2018


Media, advertising, and commerce have historically had a symbiotic relationship. The equation was simple: customer sees an ad via media and buys a product via a retail outlet. Today, there is a growing friction between e-commerce and media platforms, which are both competing for a finite amount of consumer attention, and this friction threatens to upend an age-old balance of power, according to a new report.

Social media platforms are increasingly entering the e-commerce space with native features that support consumer purchases. This subtle shift has begun to unseat the unrivaled dominance of online transactions that has traditionally been held by e-commerce platforms and digital marketplaces. Simultaneously, e-commerce sites are beginning to introduce rich media and customer-centric marketing technology in order to foster some of the engagement and relationships currently owned by social media platforms. These two shifts illustrate a friction in today’s go-to-market strategy and a rising competition in the retail industry.

This disconnect is explored in a new report, released by Magisto, which found that businesses aggressively create and maintain e-commerce profiles, but rely most heavily on social media to market their businesses. The market gap centers around the fact that the traffic they generate in doing this pushes consumers to either their own websites to generate sales or back to their own social media profiles to foster engagement. Magisto surveyed over 750 marketing decision-makers, who illustrate the market dynamics in these five data points:

  1. 75% of businesses report managing one or more profiles on third-party ecommerce sites
  2. 71% of businesses report using social media more than any other digital medium to market their business, 177% more than e-commerce sites and 122% more than paid advertising
  3. Respondents are 138% more likely to drive traffic to their own websites than to an e-commerce site with their marketing efforts
  4. 72% of businesses say they’d be more likely to use third-party e-commerce sites if they offered more tools to actively market/promote their business
  5. 50% say that if social media platforms offered direct sales, they’d be more likely to use social media for all of their business and marketing transactions

Social content marketing is a driving force behind the competition between social media and e-commerce. The report highlights an opportunity for social media to win an enormous slice of digital commerce and the need for e-commerce sites to increase their native marketing and content creation abilities. Only 47% of respondents said they were satisfied with their ability to target desired audiences and proactively market through third-party e-commerce sites, and 72% said they’d be more likely to use e-commerce sites if they offered richer ways to create, edit and upload content natively. Nearly half (49%) of marketers specifically called out their desire for native video creation as a feature that would make them more likely to use e-commerce sites. This point is especially important considering 64% say the content they upload to e-commerce sites is created specifically for the platform and 48% say if social media platforms offered direct sales, they’d be more likely to use social media for all of their business and marketing transactions.

Magisto surveyed over 750 marketing decision-makers in the U.S. in May 2018.