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."