Social media spending is projected to climb to 20.9% of marketing budgets in the next five years, a dramatic increase from 5.6% in 2009. However, just 3.4% of marketing leaders report that social media contributes very highly to firm performance, according to the latest CMO survey. Sponsored by the American Marketing Association, Deloitte LLP, and Duke University’s Fuqua School of Business, the survey received responses from 289 top marketing executives.
Why the substantial disconnect between spending and quantifying results? Christine Moorman, a Fuqua professor and director of the CMO Survey, offered some explanations.
Demonstrating the value of social media remains challenging. Only 11.5% of marketing leaders surveyed said they have proven the impact of social media quantitatively. Another 40.6% report having a good qualitative sense, but not a quantitative assessment, and 47.9% are unable to show any impact.
Social media is often not effectively linked to organizations’ marketing strategies. Although more integrated than in previous years, integration is still too low to achieve the best returns on social media investments.
Partners may not be fully utilized. Marketers say 20% of their social media activities are performed by outside agencies. Some companies suffer the “not-invented-here” syndrome, and are reluctant to accept ideas from outsiders.
Lack of Goals
Many companies lack clear social media objectives, which means measurement is difficult. For example, 15.6% of companies reported they will invest in social media to develop new products. “Given this, what process and outcome metrics make the most sense to assess impact in this area?” Moorman asks.
Many teams lack cross-functional skills. Marketers typically lead social media activities, but they sometimes lack effective cross-functional skills in information technology and traditional marketing for effective social media marketing.
Social media expertise is not embedded in marketing teams. Ideally, social media experts work closely with the brand and customer teams they support, enabling the social media experts to be abreast of the latest platforms and the most successful marketing approaches. Closely aligned teams also assure better focus on marketing goals.
“If companies really want to get the biggest bang out of social, it has to be better connected with the rest of marketing,” Moorman told Ad Age. “Social media should be aligned to support marketing and they should be linked back to social.”
Mobile Marketing
Spending on mobile marketing will increase from 6% of marketing budgets last year to 15.6% over the next three years, according to an earlier CMO survey.
“This whopping 160% increase reflects a growing reliance on mobile to interact with customers where they look for information and make purchases,” Moorman stated. “On top of it, companies hope to reach customers closer to the time of purchase in order to make them aware of offerings, deals, and additional information that may help close more sales.”
However, marketing leaders report only modest success in the impact of mobile marketing activities.
The ROI Challenge
Other research has also found that brands struggle to measure social media marketing. A survey by TrustRadius, a business software review site, found that measuring ROI is the biggest challenge facing social media marketers. Many marketers generally turn to vanity metrics, such as likes and followers to measure success. While easy to report, those metrics can be difficult to link to business objectives.
Asked to name the three most challenging aspects or their social program, most marketers (60 percent) cited measuring ROI, half named tying social activities to business outcomes, and 48 percent listed developing their strategy.
Bottom Line: Many marketers are unable to measure the business impact of their social media marketing efforts, even while social media spending continues to escalate. A social media monitoring and measurement is an important step to quantifying the impact social media marketing.
William J. Comcowich founded and served as CEO of CyberAlert LLC, the predecessor of Glean.info. He is currently serving as Interim CEO and member of the Board of Directors. Glean.info provides customized media monitoring, media measurement and analytics solutions across all types of traditional and social media.
Trackbacks/Pingbacks