Social media influence consumer purchase behavior far more than you might think.

That’s a key finding of new Razorfish thought leadership, FEED: The Razorfish Consumer Experience Report. The report is available in Flash and PDF download here: http://feed.razorfish.com and on the Razorfish Digital Design Blog. FEED, launched on 20 October 20008, helps marketers design better consumer experiences by uncovering insights into consumer behavior in the digital world. The report documents the results of a 2008 survey that Razorfish conducted of more than 1,000 “connected” consumers (a coveted group who spend money online and have access to broadband). Here are a few key findings from FEED that marketers might find noteworthy

1. Social media increasingly influence purchase decisions. Four out of 10 consumers surveyed by Razorfish have made a purchase based on advertising they saw on a social media site, and 76 percent welcome advertising on social networks. Consumers’ purchasing behavior reflects the larger influence of social media on their lives. About 75 percent of consumers surveyed spend at least one hour a week on social media sites like Twitter and Facebook. More than 68 percent of connected consumers are active on two or more social media sites.

2. Consumers are adopting social media and web 2.0 technologies with startling regularity. Nearly 7 out of 10 connected consumers have customized their home pages with content feeds, scheduled updates, and other features. Sixty percent use widgets on websites. The widespread use of widgets is the most surprising finding. We believe the uptake of widgets, mobile devices and social media means that marketers need to design experiences for consumers across a world of fragmented digital media.

3. Video explodes as an advertising format. A whopping 94 percent of consumers surveyed say they watch interactive video with some level of frequency, with nearly a third watching video on a daily basis. We also find that consumers are open to advertising through interactive video, with the majority preferring companion banners to pre-roll as well as new, emerging forms of video advertising such as tickers and interstitials.

4. Personalization and loyalty sway consumers. Razorfish reports that 65 percent of connected consumers say that retail loyalty programs highly influence purchasing decisions. According to Razorfish, loyalty services like Amazon’s Prime or Best Buy’s Reward Zone are essential for retailers to succeed on the eve of the holiday shopping season. Moreover, websites that give personalized recommendations strongly influence connected consumers. Of the total surveyed, 65 percent said that they have made a repeat purchase on a site that issued an automated recommendation based on their previous purchase.

FEED also consists of a series of essays that examine the ways consumers interact with digital media. A few of my favorites are “Putting Jakob Back on the Shelf” and “What’s in a Game?” Both of these firmly assert that simply designing functional websites isn’t going to please a broadband-enabled audience that expects an interactive experience. Instead, designers instead need to ask how to employ concepts like gaming, storytelling, and interactivity to create the next generation of consumer experiences. For instance, “What’s in a Game?” challenges marketers to imagine how consumers could experience one’s product or brand in a playful, game-like fashion. The essay cites Razorfish client work with Lipton tea, where we designed “BrainTrain,” a collection of mental alertness games that engage the consumer while branding Lipton in a subtle way.

Other notable essays include “Twitterific,” “Life after the iPhone, and “Designing Experiences for the Facebook Generation.”

I welcome your feedback.