Organizations are investing more in social media, without signs that it is paying off for them, according to a recent survey sponsored by the American Marketing Association, Deloitte, and Duke University's Fuqua School of Business. The biannual
CMO Survey reports that only 25 percent of the 289 U.S. chief marketing officers who responded say social media contributes to the organization's performance. Only 3 percent say social media makes a very high contribution.
One problem is that only 11 percent of respondents can quantify the impact social media investments have had on their business. Forty-one percent say they have a qualitative sense of social media's impact, but 48 percent haven't been able to demonstrate its impact. Business-to-consumer service organizations (18 percent) are most likely to have quantitative proof of social media's impact, while business-to-consumer product companies (9 percent) have the least proof.
Still, organizations continue to boost social media spending, the report notes. Currently, social media makes up 11 percent of marketing budgets at respondent organizations, but respondents say that will increase to 13 percent this year. Moreover, they predict social media will rise to nearly 21 percent of marketing spending in the next five years.
"Companies are spending a lot on social media right now, but demonstrating its contribution depends on more than investment in analytics," says Christine Moorman, the Duke business professor who directs the survey. "Firms must also take other steps to integrate social with the rest of the company's marketing strategies."
To achieve this, she says organizations will need to change where the social media function is located, how it is involved in marketing planning, and how the organization manages customer and brand assets within social media. These are areas where marketing functions struggle, though. The survey notes that social media is moderately linked to the marketing strategy at respondent organizations. However, the degree to which those organizations have integrated customer information across their purchasing, communication, and social media channels has slipped over the past year compared to previous surveys.
"This lack of 360-degree understanding of customers makes all of marketing, including social media, less effective," Moorman says.
Moving forward, respondents say their organization's top social media investment areas this year will be content creation (63 percent), analytics (44 percent), campaign optimization (41 percent), social listening (41 percent), and community engagement (40 percent).