Survey: Most CMOs To Boost Social Media Budgets In 2010 (And It Had Better Pay Off)
- by Mark Walsh @markfwal, December 9, 2009
Nearly two-thirds of chief marketing officers plan to increase social media budgets in the next year, but they are also expecting more in return, according to a new study. The survey of 133 CMOs, conducted by social commerce company Bazaarvoice and the CMO Club, found that nearly three-quarters who didn't attach revenue expectations to social media spending in 2009 will start doing so next year.
"While 2009 may have been a "trial" run for many brands and social media, in 2010, CMOs expect social initiatives to directly impact their bottom lines, without exception," stated the report. As a result, the metrics they track for social campaigns will shift from Web-centric benchmarks like traffic, page views, and "fans," to ones linked more directly to their overall business like conversions and average order value, along with sales.
This year, only 36% of companies tracked the impact of social media on conversions, and only 22% on revenue. But next year, 81% of CMOs expect social media investments to account for 10% of sales.
As it is, quantifying the benefits of social media marketing remains an elusive goal. Roughly half of those surveyed are unsure about their returns on using social tools like Twitter, LinkedIn and industry blogs. That brings to mind the old ad industry truism: "I know half my advertising dollars are wasted...I just don't know which half."
Nevertheless, almost all CMOs expect to rely on user-generated content sources such as Twitter, customer reviews, and pre-sales Q&A to influence product decisions. The biggest jump will be in using Twitter comments to help boost sales, with a 407% increase expected among companies surveyed. (Since Bazaarvoice supplies such reviews and other UGC features to retailer and manufacture sites, the company stands to gain from that trend.)
CMOs participating in the study reflected a cross-section of industries including software/hardware, travel/hospitality, media and publishing, consumer goods, and retail, among others. Annual revenues ranged from $6 to $50 million (25%), $51 to $999 million (42%), and over $1 billion (23%).
According to Chief Marketing Officer . com: CMOs Need Greater Engagement Internally And Through Social Nets For Brands To Thrive: More than four out of five (84 percent) chief marketing officers (CMOs) allocate less than ten percent of their budgets to experimenting through social media and non-traditional communications channels, with more than half (55 percent) allocating just five percent or less, according to a study by The CMO Club and Hill & Knowlton released today. By contrast, according to a recent study (Pew & American Life Internet Project, December 2008), the number of adult Internet users who have profiles on social networks quadrupled to 35 percent in 2008, from eight percent in 2005. This survey was conducted online with 124 chief marketing officers in the Club responding between September 15, 2009, and October 15, 2009.
According to a survey of its members, three out of ten (29 percent) of CMOs report having a social media policy that is widely adhered to within their company and a further 31 percent are currently developing a policy. Implementing these policies is proving to be a challenge, with just over a quarter (26 percent) of CMOs stating they have a policy but it is not complied with within their companies.
What Is The Job Of a CMO?
According to Wikipedia the role of a CMO is primary or shared responsibility for areas such as sales management, product development, distribution channel management, public relations, marketing communications (including advertising and promotions), pricing, market research, and customer service, CMOs are faced with a diverse range of specialized disciplines in which they are forced to be knowledgeable. This challenge is compounded by the fact that the day-to-day activities of these functions, which range from the highly analytical (eg. – pricing and market research) to highly creative (advertising and promotions), are carried out by subordinates possessing learning and cognitive styles to which the CMO must adapt his or her own leadership style.
Beyond the challenges of leading their own subordinates, the CMO is invariably reliant upon resources beyond their direct control. That is to say, the priorities and/or resources of functional areas outside of marketing such as production, information technology, legal, and finance have a direct impact on the achievement of marketing objectives. Consequently, more than any other senior executive, the CMO must influence peers in order to achieve their own goals.
Given the exposure that social technology has and continues to have it appears as though CMO’s are not fulfilling their responsibilities to the organizations they represent. That being true most will be looking for a job soon.
read Are CMO's Clueless? here http://www.relationship-economy.com/?p=7735
As I wrote last February in my blog, "The subhead in the Advertising Age story reads: "Embrace of technology, business objectives helps increase tenure again." It looks like CMOs high turnover rates have risen for the second year in a row to 28.4 months. That's compared to CEOs at six years and four years for CFOs, and it's better than last year and the year before, but, still "dreadfully short." Web 2.0 technology and tools will continue to suffer from slow adoption rates, even if the "generals" catch up since the troops have mostly print skills (copy and editorial writing), a fear of databases (what's an API?), and access to little training.
Interesting data. In addition to metrics that are closer to the bottom line, it's also important to measure the types of interactions that are occurring within social ads themselves. In our social ads we segment and report on engagement activities such as shares with friends, "likes", recommendations, tweets, etc. It's definitely about more than just the click, but conversions and sales aren't the only alternative metrics to consider in social advertising.
If CMO's want to see the real impact of their social media campaigns they should simply shut down their efforts and watch their brand loyalists revolt! Word-of-mouth has always been difficult to measure but its value has never been questioned. Why hold social media to a higher standard? The measurement monster we've created in the online industry continues to hamper the tremendous opportunity for effective online branding.