Commentary

Social Media's Biggest Obstacle: Failure to Measure

number fieldEfforts to build customer loyalty garner more social media spending from marketers than campaigns aiming to build brand awareness or increase customer acquisition, according to the results of a new survey conducted by the Direct Marketing Association and Colloquy of DMA members and Colloquy subscribers. At least, that seems to be the case among companies which actually take the trouble to keep track of their social media budgets: remarkably, the DMA and Colloquy also found that a good number of companies engaged in social media marketing couldn't say how much they were spending.

On average, companies which primarily use social media to bolster customer loyalty spent $88,000 on these efforts in 2009, the DMA and Colloquy survey found, compared to an average $53,000 for companies which use social media primarily to build brand awareness, and an average $30,000 for companies which use social media primarily for customer acquisition.

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Loyalty-building is also the strongest growth area, jumping almost 300% over the last 12 months, according to the DMA and Colloquy, "easily surpassing allocation increases for all other social media-related marketing objectives." Tellingly, smaller companies tended to spend more on social media, with a significant number saying they devoted more half their marketing budget to social media efforts (including all three categories).

So far, so good. Now for the bad news: a full 24% of survey respondents said they didn't know how much their companies spend on social media. Perhaps even more alarming, almost two-thirds of respondents said they didn't know how to measure social media success, and 65% said they don't monitor customer sentiment about their brand with social media tools.

A number of other surveys have produced similar findings in recent months. A KingFishMedia survey of 457 marketing executives in the second quarter of this year found only 30% of respondents said they had executed a social media ad campaign -- and only half of these had attempted to measure the ROI of their campaigns. And in June Digital Brand Expressions released the results of a survey of 100 marketing execs in which 78% said their companies were using social media, but just 41% said they had a strategic plan.

It's not hard to come up with a charitable interpretation of these data: they obviously reflect the new, still-experimental character of this emerging platform. But businesses aren't built on charitable interpretations, and these last data frankly paint a picture of an entire industry that appears to be flying blind. Pleading avant-garde status is unlikely to satisfy chief marketing officers who have to account for their budget allocations, let alone persuade them to spend more; to do this they need clear, convincing metrics before they will loosen the purse strings.

4 comments about "Social Media's Biggest Obstacle: Failure to Measure".
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  1. Mark Burrell from Tongal, September 8, 2010 at 2:38 p.m.

    This is EXACTLY right. Funny part to me is that all the VC money is going after analytics and platforms but the measurements are still inaccurate. All I know is that you still need a timely, cost effective way to create content for social media to work and that need isn't going away anytime soon .

    Mark
    mark@tongal.com

  2. Brian Gillard from Disperse Interactive, September 8, 2010 at 2:48 p.m.

    I think that what may be missing loyalty vs. awareness and acquisition data is the the types of companies that were surveyed. Younger companies may tend to primarily use SM to bolster their awareness more than a more established and mature company who's positioning is already "set" with their target consumers. Thus, it would make more sense that the mature companies would tend to spend more on loyalty/retention.

    #dispersewuzhere
    @disperse

  3. John Cason from Mobilization Labs, September 8, 2010 at 5:22 p.m.

    Good points Brian & Mark.

    In my opinion all organizations have a lists of people - voters for politicians, customers/fans for corporations, donors for nonprofits, etc. They all want to move people into action for their cause. Whether it's Chick-fil-A that wants you to try a new spicy Chicken sandwich or an advocacy group that wants you to email & call your congressman.

    If you can effectively take a group or segment of supporters, ask them to do things for you, and measure/track the results I think you have a good start in the right direction.

    In the end it's not about using "social media" as another media outlet or trying to get more people to "like" you on facebook, but rather if you can get them to do things for you (online & offline) & track the results.

    just my opinion,
    -John
    @johncason

  4. Brett Greene from Oxstein Labs, September 9, 2010 at 5:15 p.m.

    To take this one level deeper, out of the 41% with strategic plans, what was the defining criteria determining what made a plan strategic?

    Brian Solis' article today on corporate social media strategies (http://bit.ly/bxD6xm) makes the distinction between low level visibility versus having a strong online presence that is meaningful. How many of these plans were merely setting up the basics with Twitter, Facebook and Youtube before calling it a 'strategy?'

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