Read the Blog

Read Professor Moorman’s analysis of key survey results.

Do Marketers Know What They Want From Social Media?

Social media spending as a percentage of marketing budgets will more than double over the next five years according to new results from The CMO Survey. Responses from 468 top marketers in February indicate that companies are spending 8.4 percent of their budgets on social media. Over the next year, that number is expected to increase to 11.5 percent, and in the next five years it will reach 21.6 percent.

Looking back to the first time I asked these questions in August 2009, the levels were 3.5 percent of current budgets and expected to increase to 6.1 percent over the next year and 13.7 percent over the next five years. The increase in current spending from 3.5 percent to 8.4 percent alone represents a 140 percent increase in the last 3 years. No other part of the marketing budget has grown so much in such a short amount of time. In fact, during the same time period, traditional advertising has continued to plummet. It was decreasing by 7.9 percent per year three years ago and continues to drop 2.7 percent in the current year.

The dramatic increases in social media spending were universal across different business sectors: B2B-product, B2B-services, B2C-products, and B2C-services. The B2C-product sector, which includes companies such as Procter & Gamble and The Coca-Cola Company, expects the most dramatic increase, from 9.6 percent to 24.6 percent (see Table 1).

Table 1. Changes in social media spending across sectors

While spending on social media appears easy to do, CMOs reported their companies have not yet cracked the code on how to fully integrate social media with the rest of the firm’s marketing strategy. On a scale of 1-7, only 9.9 percent of respondents believe that social media is “very integrated” with the firm’s marketing strategy (the highest rank for the question), while 15.2 percent believe it is not integrated at all (the lowest rank for the question). Even more striking is the fact that the average score of 3.8 is the exact number recorded the first time this question was asked two years ago in the February 2011 CMO Survey!

Here are my questions: Why spend more but not solve the integration problem? Why is integration so tricky for companies?

  1. Integration is tricky because marketers have been sold a ‘bill of goods’ on measurability and accountability that, while more available than ever before in the past, is still an imperfect mix of art, science and gut feeling.

    The arguments are about how to integrate social media so attribution models are accurate. How to get to the point od some kind of working model, though, is often a matter of differing opinions. When you need to hack tools together to bridge the gap that always exists in whatever tools you are using (read:nothing is even close to perfect in the social media measurement game) someone will be disappointed. Disappointment leads to staking out a territory or position. Now, meetings are held with arms crossed and battle lines drawn rather than with open minds.

    Companies need to be willing to integrate social and other marketing systems in imperfect ways, learn from the inevitable mistakes, show a little grace by understanding the imperfections and then do something rather than nothing (or simply complain which most are very good at).

    Being afraid of making a mistake is keeping this part of puzzle from being solved in many organizations and until some risks are deemed acceptable this is likely to stay this way for a while.

  2. Hi Frank, I agree that there is learning process going on in most companies to understand and develop these systems. With learning comes the “trial” and the “error” so, as you suggest, managers must be open to new evidence, forgiving of failed attempts, and willing to do experiments. Further, companies can learn from one another about best practice in this area.

  3. Hi Christine, you have uncovered an important point in finding that companies have not yet cracked the code on how to fully integrate social media with the rest of the firm’s marketing strategy.

    As the head of a large digital firm, we have been experimenting with a variety of social media strategies for our clients and surprisingly one strategy that stood out was based on one of the strongest human emotions: love.

    I have written a report about it called ‘Your CEO was right, Social Media Doesn’t Work’ and feel free to take a look.

    Thanks for all the cutting edge information on cmosurvey.

    Kishore

  4. We (and I think I speak for all of us) are begging for a technological solution to address “Integrating Marketing.” Something along the lines of “we are informed about ideas and suggestions with one click and with one click can send out a message to all the different channels and alert.” Fantasy. We believe that integration is a PROCESS management issue where all contributors have their finger on the pulse and recognize their responsibility to participate in the social media effort. The traditional way of meeting once a week, or having an intern ask everybody on the floor for any ideas interrupts our daily work and becomes a challenge. There has to be a third way, a simpler way.

Write a Comment