Nearly half of CMOs claim social media has a ‘below average’ impact on profitability
Despite the rapid increase in social media ad budgets, many senior marketers remain unconvinced by its impact on their firm’s overall performance and are still failing to integrate it into their wider marketing strategies.
When asked to assess the impact of social media spend, 40% of marketing leaders said it made a ‘below average’ contribution to their company’s performance, while 49.8% said it had only an ‘average impact’. Only 3.4%, meanwhile, stated that social media had made a ‘very high’ contribution to profitability.
The results are from a new report by The CMO Survey, which polled 289 top US marketing executives.
It found that despite the lack of results, marketers keep spending on social media and it predicts that social media will go on to account for a fifth (20.9%) of marketing budgets over the next five years – up from a 5.6% share in 2009. Social media currently accounts for 10.6% of marketing budgets.
Bridging the social media disconnect
The problem, according to the report, is that brands do not have clear objectives when it comes to social media and are failing to align it into their wider marketing strategy.
When asked to rate (between one and seven) how effectively social media is linked to their overall marketing strategy, the polled marketers reported an average score of just 4.2.
There is also a disconnect when it comes to integrating customer information, according to the report. When asked how effectively they were integrating customer information from purchasing, social media and other communication channels, marketers reported an average score of only 3.4.
“Many companies do not have clear objectives for their social media objectives and too many are using intermediate performance indicators such as buzz,” reads the report.
“Positive performance must ultimately be understood in terms of customer outcomes, such as acquisitions or retention rates. Marketers lead social media activities in 83.9% of companies but they need effective cross-functional skills in information technology and traditional marketing to make social media truly effective.”
The stats are even more concerning when it comes to proving impact. Some 47.9% of senior marketers are yet to show any impact from social media, while 40.6% can only show a ‘qualitative’ impact. Just 11.5% of marketing leaders have been able to show the ‘quantitative’ impact social media has on their company’s performance.