Social media is failing to meet projections as marketers consistently overestimate how much budget they will dedicate to sites such as Facebook, Twitter and Snapchat.
According to a survey of 388 top US marketing execs that is run biannually by The CMO Survey, marketers are now spending 10.5% of their budgets on social media. And they expect that to rise.
Over the next 12 months, that figure is expected to increase to 12.9% while over the next five years marketers estimate that 18.5% of their budgets will go to social media. Consumer product brands expect that proportion to be even higher, at 25.5%.
Yet the survey shows that marketers are consistently failing to meet their own projections for social media spend. Five years ago, marketers estimated they would already be spending 19.5% of their budgets on social media. The actual figure is 10.5%. Marketers have been overestimating their spend by at least four percentage points since the survey began measuring the metric.
Part of the issue could be that marketers are making “minimal progress” in integrating their social media with their wider marketing strategy, according to the report. Asking to mark out of seven how well the two are integrated, marketers gave a score of just 4.1, a figure that has barely changed over the past five years.
Marketers are also failing to effectively integrate customer information across purchasing, communication and social media channels, with a score of 3.4 the second lowest in the past six years.
The impact of social media also remains difficult to prove. Some 43.3% of those questioned said they “haven’t been able to show impact yet”. Some 38.2% claim to have a “good qualitative sense of the impact, but not a quantitative impact” while just 18.4% have proved the impact quantitatively.
As a result, marketers give social media a ranking of just 3.2 out of seven when it comes to its contribution to company performance, although consumer-focused brands are doing a better job their B2B counterparts.
Mobile marketing performance declines
Mobile marketing is similarly struggling to prove its worth. Marketers say they are currently spending 5.1% of their budgets on mobile, with that expected to grow to 11.6% in the next three years.
Yet how successfully those questioned rate the performance of their mobile marketing has declined. For customer engagement, marketers gave mobile a score of just 3.5 out of seven, down from 3.8 in August 2016. Customer acquisition, customer retention, delivering your brand message, sales and profit saw similar declines.
And mobile still has a “minimal contribution” to company performance, at 2.7, although this is up from 2.4 a year ago.
The concerns over social media and mobile marketing come amid a backdrop of growing worries about the effectiveness and voracity of digital advertising. Facebook has admitted to a series of measurement errors, while Google found itself at the centre of a brand safety furore after an investigation by The Times claimed brands were “funding terrorism” on YouTube because their ads were appearing next to illegal or unsavoury content.
Marketers are also beginning to question digital advertising and demand more rigour of its measurement. Most notably, Procter & Gamble issued a call to arms to the industry to demand the clean-up of the digital ecosystem.