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Why Online Businesses are Moving from the ‘Social Graph’ to the ‘Interest Graph’

In my latest book, The Social Media Mind there is a chapter where I examine the importance of the Interest Graph versus that of the Social Graph and explain how the latter is of far greater value to companies, marketers and advertisers than the former.

The message that the shift I highlighted is beginning to make itself felt is signalled by the abandonment of Facebook Stores by companies as large as Gap, J.C. Penney, Nordstrom and GameStop. At the beginning of the year I drew attention to the fact that consumer studies showed there was a significant trust issues with Facebook Stores. A new report, published by Bloomberg reveals that conversion of fans to shoppers in the Facebook environment has been less than encouraging.

Gamestop, mentioned as an example, failed to gain enough traction to justify the expenditure in effort, energy and cost of its Facebook Store despite that fact that its fan page, over 3.5 million strong, had, on paper, made the move to set one up, a projected win for the company.

The reason for failures such as this may lie in the fact that the Facebook environment does not yet generate sufficient trust to support F-Commerce (as Facebook Commerce has been called) but the real culprit lies elsewhere and it has everything to do with how consumers use social networks in the first place.

As we get past the ‘shining new toy’ moment where all a network has to do is appear online and generate sufficient buzz and a fresh way of interacting, time spent in each is guided by what we like and who we know. Facebook uniquely positioned itself in the online world as the place people go to meet, online, people they already know and this now is becoming an obstacle to its expansion. If we think of Facebook as the world’s largest watering hole it is easy to see why when we are there, hanging out with our buddies, we might be resistant to a guy walking in wanting to sell us something.

This fine distinction also quantifies the difference between the social graph (which defines who we know and interact with) and the interest graph (which defines what we like and, more importantly, what we are most likely to buy). It is exactly the reason Facebook, with hundreds of millions of members, is delivering a lot less return on investment (ROI) for retailers than Pinterest whose membership base barely breaks the 11 million mark.

As social media expands further and becomes more fragmented it is the interest graph that should guide retailers and marketers rather than the social one. After all, we never buy anything just because some friends we knew from school bought it too, but the mere recommendation of people we regard as authority on a subject we are intensely interested in, is received, practically, as gospel.  

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