According to industry sources, social media spending will become a larger percentage of companies’ marketing budgets. But as trends analyst and digital intelligence company eMarketer reports, integrating social media into their overall business strategies still poses a challenge.
The American Marketing Association and Duke University’s Fuqua School of Business conducted research amongst over 400 top marketers for the February 2011 Chief Marketing Officer (CMO) Survey. Their conclusions reveal that over the next 12 months, social media spending will increase to 9.8% of marketing budgets, up from the current level of 5.6%. By 2016, it is expect to exceed 18%.
“Marketers that have spent the past few years ramping up their internal social media marketing infrastructure—and their presence on sites such as Facebook and Twitter—will take social media to new heights in 2011,” says Debra Aho Williamson, eMarketer’s principal analyst and author of the recent report “Social Media in the Marketing Mix: Budgeting for 2011.” She believes that companies will evolve the way they market across all media.
One of the last hurdles for companies is working out the balance of marketing that works for them – including a focus on product development and traditional advertising. Service companies are also realising they must be on the cutting edge to gain clients and, according to this eMarketer report, also be savvy when it comes to social media.
As CMOs are allocating higher percentages and total spends to their budgets for social media, the research shows there has been no slowdown in working on integration. Combining the newer form of communication into overall business and marketing strategies has been a core focus of many companies.
However, a quarter of all chief marketing officers say social media is not effectively integrated at all into their businesses, even though they are more confident about it integrating into traditional marketing strategies. 10.5% feel social media is very effectively integrated into those efforts.
“As social media becomes a bigger budget line item, CMOs and their companies must face the challenge of integrating it into overall business and marketing strategies,” concludes the latest eMarkerter report. “Not only is it more cost-effective to incorporate social media into marketing and overall strategies, but it also makes marketing more effective overall,” it adds.
While social media is viewed by many as a cost-efficient way to market, Bloomberg.com warns that is does not come at no cost. Integrating social tools into a corporate marketing program requires skill, time, and money says the publication’s StumbleUpon, Digg, and Twitter, but nothing works better than word of mouth,” he adds.
Marketing consultant David Dirks points out a recent study analysed millions of fan pages on Facebook, noted that the largest following is local businesses at 17.6% That is followed by interests, 10.6%, and musicians at 6.5%. Big companies ranked fourth and brands ranked seventh on this list.
Today the average user on Facebook has 160 friends and is connected to 80 businesses, says Dirks, highlighting the tangible benefits of the mega social networking site.
A case in point for social media is Dell’s use of Twitter. Between 2007 and 2009 the company brought in an extra US$3-million in sales revenue, by offering 30% discount coupons exclusively οn its @DellOutlet hashtag.