Ask anyone in the know where companies should be spending their cash and 98% of the time the answer will be a resounding “on social media!”. But the reported marketing spend doesn’t seem to add up.
In June of 2012 Advertising Age and Citigroup spoke with businesses in The United States and most of them have a maximum of 20% of their marketing budget devoted to social media advertising or maintenance. Hang on…. 20%; that can’t be right can it? Social media is heralded as one of the most critical forms of digital marketing today. Let’s dig a little deeper.
This eMarketer graph shows that the percentage of marketing budget devoted to digital and to social media is well below the 20% mark for most companies with the bias being around the one to ten percent mark. So not only is there very little investment being made in social media, but digital as a whole is not receiving a large slice of the marketing budget either.
One possible reason for this could be found when you look at the satisfaction levels of companies advertising on platforms like Facebook:
While the vast majority were not dissatisfied with their Facebook advertising return; they were only somewhat satisfied. These numbers make me a little wary as we cannot determine the level of skill that was used in putting these ads together and we cannot begin to unpack the expectations that the advertisers had when placing their ads. So we do need to look at these numbers with a pinch of salt.
That said, there is still a light at the end of the tunnel. The same report looked at the level of spend that was going to be allocated in the next financial year and those numbers are looking a lot more promising:
There are a few insights we can pull from this and some very real conclusions as well.
First, the digital marketing industry as a whole needs to have a look at where and how it is positioning itself to the business. As much as CIOs within corporations are the only ones who understand the true essence of cloud computing and visualisation through VMWare or blade servers (I lost a lot of you didn’t I; go on, admit it!); the CMO is also the only one who truly understands the marketing speak we are trying to show value on.
Digital marketing needs to be business savvy and understand how to translate “what we are selling” to the business in order for them to buy in to our offering. In order for social media spend and digital marketing spend to continue to increase; business – and more specifically, non-marketing directors and decision makers – need to understand it.
Secondly we need to manage the expectations of our clients (internal or external clients). We need to be wary of having digital being seen as the silver bullet of marketing through which all problems can be solved.
And last but not least; marketing – especially digital markteing – needs to get serious about the data! What makes digital so supremely awesome is the amount of raw and unfiltered data that we have access to. We need to learn to mine that data for all its worth and then make marketing positiong decisions based on that data. Turn it in to information and then unleash it.
When these three things align; digital and social media spend will sky rocket as the business will understand the reasoning; be able to follow the breadcrumbs which led us to make certain conclusions and then see the value.