According to the recent The CMO Survey, social media spending is expected to climb to a 20.9 percent share of marketing budgets in the next five years. This share only reached 5.6 percent in 2009.
But most shocking is that only 3.4 percent of marketing leaders say that social media contributes very highly to firm performance, with 40 percent of survey respondents reporting a below average contribution.
The survey highlighted several key findings for marketing executives (note the annual CMO Survey includes responses from both B2C and B2B marketers):
- Customer social media information is not integrated with other customer information: Companies are not integrating customer information from purchasing, social media, and other communication channels. On a 1-7 scale where 1=not at all effectively and 7=very effectively, the average customer integration rating across these three sources is 3.4, which is a poor showing and lower than last year. What does this mean? Companies do not yet have the critical full-view perspective that could help them increase customer acquisition and retention.
- Proving social media’s impact is elusive: A constant challenge for marketers, these new results indicate that they have yet to get a handle on social. Only 11.5 percent of marketing leaders say they have proven the impact of social media quantitatively. Another 40.6 percent report having a good qualitative sense, but not a quantitative assessment.
- Partners may not be fully utilized: As firms build a presence in social media, they often seek outside agencies to help. In fact, marketing leaders report that one-fifth of their social media activities are performed by outside agencies. One challenge is that old “not invented here” syndrome—where companies fail to accept new ideas developed outside their borders—could be keeping this external expertise from making its best contributions.
- Cross-functional marketing leadership is needed: Marketers lead social media activities in 83.9 percent of companies—a figure that has climbed from 71 percent in 2011. Marketing leaders managing social media need efficient cross-functional skills in information technology and traditional marketing to make social media effective.
- Lack of social media goals: Many companies aren’t outlining clear objectives for their social media activities. Without objectives, what should be measured? The best social media activities have a clear objective and measure performance against it. For example, in the recent survey, 15.6 percent of companies reported they will invest in social media to develop new products.
- Social media expertise embedded in marketing teams: Social media experts should be closely linked to the brand and customer teams they support. This involvement pays off because social media experts are tuned into the latest platforms and know which approaches generate interest from current and potential customers, fans, and enthusiasts. As a result, these experts can guide brand and customer teams to think differently.
- Failure to drive toward the financial performance connection: Results from previous surveys indicate that companies are using more intermediate performance indicators such as buzz. As the report says, “This is a good choice to show social media’s initial contribution. However, lifts must ultimately be understood in terms of customer outcomes, such as acquisition or retention rates. Doing so may require companies to perform more thorough experiments with their use of social media.”
Latest posts by (see all)
- 5 things law marketing can learn from the Kansas City Royals - November 6, 2014
- Why Data-Driven B2B Companies See More Growth - March 25, 2020
- Experience moves to the cloud: Adobe migrates its CX platform - March 3, 2020
- Mind the Gap: The Startup’s Transition from Go to Grow - February 27, 2020