Most firms cannot measure the performance of their social media marketing, new research reveals. In the absence of solid measurement results, most believe social media activities contribute little to their overall performance.
Almost half of firms (44.1 percent) say they haven’t been able to show the impact of their social media spending and only 4.6 percent said it contributes very highly to company performance, according to the latest CMO Survey.
Just over one-third (35.6 percent) say they have a good qualitative sense of the impact, but cannot quantify it. Only 20.3 percent of marketers say they have quantitatively proven the impact of social media on their business.
“It is really challenging for companies to show the impact of social media,” says Christine Moorman, a Fuqua professor and director of The CMO Survey, in an article for Deloitte Insights. “If a company drops a coupon into the marketplace, it can track whether or not someone goes into a store and uses it. It is much more difficult to attribute an action—sharing a brand on social media, for instance—to sales. Companies don’t do a lot of experiments—such as testing different types of content—with social.”
Spending Falls Short of Expectations
Measurement shortcomings may help explain why social media spending has not met expectations. Social media spending has more than tripled since 2009 as a share of marketing budgets, but still falls short of levels predicted five years ago.
Marketing leaders spent 11.7 percent of their budgets on social media in the past year. That’s more than three times the 3.5 percent they were spending in 2009, but well short of the 17.5 percent predicted five years ago.
“It’s important to note that while these increases are impressive, they don’t reach the levels marketers expected to be spending at this time,” Moorman states in a news release.
Possible reasons for the disconnect between spending predictions and reality include:
- Marketers expected that social media would keep growing at its initial rapid rate, so they may have overstated future spending.
- They may have neglected to account for increased spending of competitors. As a result, the market may have become saturated, decreasing the effectiveness of spending.
- Social media spending may be increasing but could be included in budgets of other departments, such as IT.
- Many companies haven’t realized the ROI they anticipated from social media, dampening the desire to invest in the channel.
- Companies do not manage social media investments as well as they hoped.
The CMO Survey, sponsored by the American Marketing Association, Deloitte and Duke University’s Fuqua School of Business, received responses from 427 top marketing executives.
The 2016 Social Media Marketing Industry Report from the Social Media Examiner also reported that measurement of social media disappointed most marketers.
Only 41% of social media marketers say they can measure their social activities, according to the survey of 5,000 marketers. In 2015, 42% indicated they could measure return on investment and 37% said they could in 2014.
Tips to Improve Measurement
To improve measurement, experts recommend:
- Set specific goals for social media campaigns and select metrics that measure those goals.
- Follow a few key metrics consistently rather than shifting between different metrics.
- Invest in analytics, such as in-house staff, agencies, tools and technology, models and customer databases, to better understand the impact of social media.
- View metrics through a single dashboard rather than trying to track metrics through different sources. An integrated dashboard of results saves time, provides real-time access, displays a comprehensive view of performance, and makes it easier to analyze and interpret data.
Bottom Line: Relatively few companies can demonstrate the value of their social media efforts, surveys show. In order to adequately measure the impact social media marketing and win spending increases, more organizations may increase investments in analytics and social media measurement tools.
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, measurement and analytics solutions across all types of traditional and social media.
