Market research firm Compete has released a report on the convergence of social networking and e-commerce, reorts ClickZ. In the process they tried to coin a new buzzword: “social commerce,” or s-commerce for short.

Whatever you call it the numbers add up:

Consumer visits to social networking sites have increased 109 percent since January 2004, and page views per visitor have grown by 414 percent in the same time period.

"Social networkers” spend less time viewing traditional media, have more discretionary income and prefer online shopping than non-social networking site users.

The social media elements making the most impact are:

branded micro-sites, customer reviews, forums, peer-to-peer transactions, product blogs and user-generated content projects

And the key to social media success is listening to your customers, says the report. 

“Companies would be better served to build online forums on their sites, micro sites that support their brand, or explore other ways to get consumers to participate with them versus going to social networks to find more consumers,” said Stephen DiMarco, VP of marketing at Compete.

He suggests that savvy CMOs should reexamine where their budget is being allocated for 2007.

He advised that marketers should look at how to redirect the dollars into more research and customer focused marketing.