There was good news and bad news for social media marketing to be found in the results of the latest CMO Survey from Duke University’s Fuqua School of Business, which polled 410 marketing executives (most of them vice-presidents or above) from July 16-August 6, 2013. On the positive side, spending on social media marketing is expected to increase substantially in coming years; on the negative side, nobody seems quite sure what they’re achieving with it.
First the good news: CMO survey respondents said they expect social media marketing’s share of overall marketing budgets to increase from an average 6.6% currently to 9.1% over the coming year, and 15.8% over the next five years.
The biggest increases are coming in business-to-consumer products, where social media marketing will grow from a 7.3% share to a 19.5% share over the next five years, and business-to-consumer services (7.7% to 18.6%). Meanwhile social media marketing’s share of B2B product marketing spending is expected to increase from 5% to 13.3% over the next five years, and for B2B services from 7.8% to 15.5%.
Now on to the bad news. First of all, social media marketing is not well-integrated with overall marketing strategies, according to CMO Survey respondents: asked to rank their company’s social media integration on a scale of seven, the average response in the latest survey was 3.9 -- basically unchanged from the average score of 3.8 in the four preceding surveys, going back to February 2011. Integration of customer information actually appears to be getting worse, with marketing execs giving an average score of 3.4 -- down from 3.7 in the August 2012 survey.
The picture for return-on-investment isn’t much better, with 49% of respondents saying they haven’t been able to demonstrate any impact from social media marketing, and 36% saying they have a qualitative sense, but not quantitative. That leaves just 15% who say they have shown the impact quantitatively.
Great article Erik - really interesting observations!
I think when considering ROI things can get tricky - because it means so many things to so many different people. I always try to break it out into two buckets: how many (easy to quantify - did you reach more people, were they more on target, did the overall cost of reaching people digitally go down or up, etc) and how good (harder, pretty much only achievable by surveys about brand awareness, intent to purchase, attitudes etc or linking to online or offline purchase).
Did the Duke study consider both buckets of ROI, or were they pretty much trying to tie social directly to business value or purchase? Curious to learn more... thanks!
Eric, thanks for the article. From our vantage point, increases in social media spending are being directed at YouTube. There is a huge rush for brands to succeed on YouTube, where they can build an owned audience they can market to again and again; so much larger than a Facebook audience. The engagements are deep at four to eight minutes long, and the marketer doesn't have to pay each time he wants to reach people; he just needs good content and a sense of how to market it on YouTube. On YT, the metrics are very concrete, too. Views. Subscribers gained. Money Saved on Advertising. Buy It Now Conversions Gained. I think we have a major new entrant to social media, and it is YouTube. thanks! Alison
I have had great results from customer service requests or complaints from Twitter. Use of Twitter with hashtags could be a way to track behavioral marketing and target sales. Creativity will require C level executives or consulting investments that require understanding of big data analyses and understanding and taking action on the analytics
Interesting article! It is understandable that businesses would want to invest ever more time and money into social media marketing, given that sites like Twitter and Facebook are becoming a major part of the daily lives of most Americans and represent great venues for reaching consumers. What is odd, however, is that relatively little effort is being made to integrate social media marketing with other marketing strategies, which might be why the quantitative return on investment for social media marketing is relatively low. Perhaps if companies made sure that they were using their money and time in a social marketing strategy integrated with their other forms of marketing, they would see more of a return on their investment, and they might even end up investing less money for better results.