Chief marketing officers are spending more money on social media, but their confidence in its effectiveness is waning.
Data from Duke University’s semiannual CMO Survey show a discrepancy between organizations’ investments in social media marketing and their returns.
Here’s the gist, as reported by survey director and Duke professor Christine Moorman:
Social media spending is expected to climb to a 20.9 percent share of marketing budgets in the next five years. This share was only 5.6 percent in 2009. What is striking, however, is that only 3.4 percent of marketing leaders report that social media contributes very highly to firm performance; 40 percent report a below average contribution.
Despite the payout, senior marketers have suffered from a bit of buyer’s remorse, with 35 percent saying they were “less optimistic” about the overall economy (up from 13 percent in 2015).
In addition to an increase in social media spending, the survey’s data show that marketing budgets are projected to grow 7 percent in the coming year. On average, CMOs reported spending nearly 8.5 percent of revenue on marketing.
With so much money being thrown in marketing’s direction, what’s preventing teams’ efforts from seeing its effect?
The missing link between what marketing execs reportedly want and what social media channels can provide boils down to lacking goals and too great a distance between brand managers and social media experts.
“Without [clear, social media] objectives, what should be measured?” Moorman asks. She outlines best practices:
The best social media activities have a clear objective and measure performance against it. 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. They can guide branding teams to think differently.
With just over 52 percent of marketing expenses being put in social media’s basket, so much depends upon that approach’s ability to improve a brand’s performance. This poses a challenge when it comes to measurement.
“Proving social media’s impact is elusive,” Moorman says. “This has remained a challenge for marketers, and new [survey] results indicate that they have yet to get a handle on it. Only 11.5 percent of marketing leaders report they have proven the impact of social media quantitatively. Another 40.6 percent report having a good qualitative sense, but not a quantitative assessment. [Nearly 50 percent] have not been able to show any impact yet.”
Along with incomplete goals and poorly integrated expertise, Moorman attributes the social media spending impact discrepancy to three additional factors:
1. Not embracing partnerships
Organizations often seek outside agencies to assist in building their brand’s social media presence. This year’s data show that 20 percent of social media duties fall in the hands of these agencies.
“One challenge is that old, ‘not invented here,’ syndrome, where companies fail to accept new ideas developed outside their borders,” Moorman says. “[That] could be keeping this external expertise from making its best contributions.”
2. Inadequate cross-functional leadership
Survey results found that almost 85 percent of marketing executives lead their organization’s social media efforts (up 71 percent since 2011).
Although digital marketing skills are a good starting point for leading these teams, to see better results, marketers should have cross-functional skills. Some examples include information technology, traditional marketing and PR.
3. Failure to drive toward financial performance connection
Previous years’ results indicate that organizations rely on “intermediate performance indicators,” such as buzz to drive performance.
Moorman says that although shares or retweets might show a social media strategy’s initial impact, to truly understand its effect, marketers must grasp more complex customer outcomes, such as acquisition and retention rates.
Does this sound like your marketing team, PR Daily? If so, what might you do to improve communication between departments and lessen the discrepancy?