Commentary
Social Media Dogged By Measurement Issues
- by Erik Sass , Staff Writer @eriksass1, September 7, 2016
Social media marketing will continue to grow at a rapid pace over the next few years, according to the latest CMO Survey of 427 top marketing execs conducted by Duke University’s Fuqua School of Business, Deloitte, and the American Marketing Association. However its rise hasn’t quite lived up to earlier expectations, suggesting top execs see concerns about its utility and measurability.
Social media marketing has already charted an impressive growth curve, with its share of total marketing spending soaring from 3.5% in 2009 to 11.7% this year, for a 234% increase over the last seven years. But it’s worth noting that this comes well below the 17.5% share the CMO Survey forecast five years ago for 2016 based on executive responses.
Looking ahead, respondents said they plan to double the proportion of budgets devoted to social media marketing on average, to 22.2% over the next five years. The proportions were even higher among consumer-facing companies, with business-to-consumer product brands planning to increase from 15.5% currently to 28% five years from now, while B2C services brands will increase from 15.4% to 28.3%.
Interestingly CMOs have a rather dim view of social media’s integration with other parts of their firms’ marketing strategies, giving this integration an average score of 3.9 points out of seven, down slightly from 4.2 points in the August 2015 survey.
The CMO Survey pointed out a number of other possible explanations for why the growth rate in social media marketing has generally lagged behind expectations. For one thing, early social media marketing may have benefited from the “bandwagon effect where companies see a lot of hype in the media about social media spending and feel pressured to spend what they observe (or think) other companies are spending.” The CMO Survey also speculated that too much social media marketing may have resulted in a situation where “consumers are saturated or turned off by company involvement in social media.”
As in previous reports, however, the study’s authors stated that the “most compelling reason is that companies fail to effectively utilize their social media investments,” including an inability to measure ROI, with budgets shrinking as a consequence. On that note, 44.1% of respondents said they’re still unable to assess social media’s contribution to their bottom line.
Further, the report notes: “Success in the social world of marketing requires a deep connection to the customer and the ability to drive a transformation of the company to embrace a whole new type of customer engagement. Many companies lack the knowledge and skills to make this happen."
Erik Sass is editor of Publishers Daily. You can reach Erik at eriksass@gmail.com.
Your final paragraph of a fine and useful article sums it up well: companies whose marketing efforts have been to broadcast to the widest possible appropriate consumers have considerable trouble narrowcasting. They tend to think in macro instead of the micro terms that define targetting in social media. They need to focus on 'him' or 'her' and not on 'them'. They are comfortable with averages however dangerous it is to rely on them.
When people ask why I wrote the book, Accountable Marketing, I tell them that having been brought up in an accountable discipline, direct and data-driven marketing, I wanted to share this experience.
"A whole new type of customer engagement" means simply getting to know that customer at the speed and in ways the customer finds comfortable. Engagement usually comes before marriage and dating before engagement. As a wise marketing friend likes to say: just start dating.