CMOs are planning to increase their spending on social media substantially over the next five years, according to a Duke University survey.
The 249 CMOs of U.S. companies said they will increase their spending on social media from its current level of 7.1% of their overall marketing budget to 10.1% over the next year and to 17.5% in the next five years.
These findings dispel the notion that social media is just a fad, said Christine Moorman, the T. Austin Finch senior professor of business administration at Durham, S.C.-based Duke's Fuqua School of Business and the director of The CMO Survey.
There were differences in the percentage change across sectors. Business-to-consumer marketing of a product reported the greatest anticipated increase over five years -- to 24% of the overall marketing budget. That number currently is 10.5%.
Marketers admitted they have a ways to go toward integrating social media in their strategy. On a scale of 1 to 7, with one being "not integrated at all" and seven being "very integrated," almost a quarter of marketers (22.3%) selected "one" to describe how well their company's social media is integrated with the firm's overall strategy.
The number was only slightly better for integration within the marketing strategy -- 16.9% selected "one" for this question. Only 9.1% chose "seven" for social media being integrated within the company's strategy (the average was 3.4%) and 12.8% selected "seven" for the marketing strategy (the average was 4%).
It is preferable that companies keep spending on social media among internal groups and not outsource it, she says. Outsourcing increases the likelihood that social media and strategy will not be integrated, she adds.
"Companies should ultimately build internal expertise for social media," Moorman tells Marketing Daily. "They may seek the knowledge and skills of external agencies, but should also vet this advice against the specifics of their own strategies and their own deep knowledge of markets."
It may be cost-effective to buy more of this expertise at this stage in the development of the field of social media, she says. However, over time, companies will want to own more and more of this expertise internally to ensure they are building social media strategies to achieve the type of integration essential to marketing success.
"My guess is that there will be always be some outsourcing because external sources can introduce novelty due to their breadth and openness to new ideas," she says. "This should not be discounted. However, this needs to be balanced with the ability to fundamentally knit social media back to the firm's strategy."
The survey also found that executives are planning to increase overall spending on all forms of marketing -- despite the fact that the survey was conducted from Aug. 1-23, a time frame marked by the S&P downgrade of U.S. credit and a Congressional battle over the debt ceiling.
Overall marketing budgets are expected to increase 9.1%, and companies plan a 7.2% increase in marketing hires over the next 12 months. The latter figure is up from 6.2% when respondents were asked the same question in February 2011.