CMOs are planning to invest more in social marketing, despite persistent concerns about actual ROI. And, perhaps not coincidentally, they also plan to invest more in analytics to ensure that good decisions can be made from data-driven insights across channels, according to the most recent CMO Survey, conducted by Duke University’s Fuqua School of Business.
The report suggests that marketers are increasingly focused on understanding and connecting with customers, and that even though social marketing hasn’t proven full value as a driver of sales, it has clearly convinced marketers that they need to be part of the digital conversation and engaged in the lifestyle of their key audience segments. For brands that have a clear vision of their place in the marketplace – and a consistent story to tell – that duel investment could well pay off in greater market share and customer loyalty.
Social media spending now makes up an average 10.7% of marketing budgets, and will grow to 14% of budgets over the next 12 months, according to the survey coverage in AdAge. In five years, social media spending will account for 23.8% of total marketing budgets. Respondents also reported that social marketing is having an increased impact on overall marketing success, albeit only a small gain. This is the first time this rating has increased since 2011.
However, despite increasing their spending on social media, marketers are having a hard time proving the return on investment. Only 15% of CMOs said they have been able to prove the impact quantitatively of social media, while 43.5% said they have a good qualitative sense of the impact, but not quantitative impact. And 41.5% of marketers have not been able to show any impact yet from their social media efforts.
When asked to rate their department effectiveness, the survey found most marketers felt only somewhat comfortable (rated a 4 out of possible 7) setting social marketing strategy, executing those strategies and connecting marketing strategy with social plans. They were even less confident (3.5 out of 7 rating) in their ability to manage outside agencies and vendors.
Overall, the survey participants estimated that digital spending in the next 12 months will be up 12.2% while spending on traditional advertising will reduce by 2.1%. Spending on CRM and new product introductions are both expected to increase slightly, but both brand building and new service introductions are expected to lag.
How are you planning to invest in customer connections in the coming year? The CMO Survey may give you some good benchmarks, although these kinds of surveys are always hard to compare to specific industries and business models. More importantly, it may give you some ideas on how to trend your own plans and your effectiveness in customer connections. A defined strategy and clear story will help keep your business in the #TopRight.
The CMO Survey is based on an online survey of 288 senior U.S. marketing executives at business-to-consumer and business-to-business companies. The twice-a-year study was launched in 2008 and is designed to gauge CMO intent for budgeting, hiring, and optimism about the economy.