Social media’s share of marketing budgets will more than double over the next five years, according to a survey of 468 chief marketing officers at U.S. companies conducted by Duke University’s Fuqua School of Business. The CMOs see social media’s share of marketing spending increase from 8.4% currently to 11.5% over the next year, and 21.6% five years from now.
Social media spending will increase across all major marketing categories, including business-to-consumer and business-to-business, for both products and services. The biggest increase is expected in business-to-consumer products (a category which includes companies like P&G and Coca-Cola), where social media’s share of marketing budgets is expected to almost triple from 9.6% today to 24.6% five years from now.
While social media advertising is clearly on the rise, there’s also a lot of confusion out there, as marketers struggle to keep pace with rapidly changing media consumption habits. Christine Moorman, a professor of business administration at Fuqua who directs the annual CMO survey, noted: “Unfortunately, marketers are behind the curve with their current levels of social media expenditure, given the amount of time customers spend engaged with one another and with companies online. The good news is that marketers are seeing the imperative to rectify this through increased investment in social media marketing in the upcoming years.”
Meanwhile, at the organizational level CMOs don’t think social media is sufficiently coordinated with other marketing efforts. Only 9.9% of CMOs surveyed said they think social media is “very integrated” with their firm’s overall marketing strategy, and 15.2% said they don’t believe it is integrated at all. Most CMOs were almost exactly in the middle (3.8 on a scale of 1-7) -- right where they were two years ago.
According to Moorman, “This ‘integration gap’ is a legacy of the way in which social media was adopted in many companies -- outside of strategy, outside of typical organizational structure and outside of typical pathways of development for marketing managers.” The solution, she opined, lies in better measurement of social media ROI: “Given that ‘what is measured gets managed,’ a more complete integration will occur when social media begins paying for some of the bills.”
Marketers have already made strides in this direction with “intermediate referral metrics” including willingness to refer the brand to others, buzz, and friends and followers. Moorman observed that “These social measures are now rightly viewed as leading indicators of company revenues.” In fact CMOs expect to increase their marketing analytics budgets 66% over the next three years.