Social media spending is expected to spike in the near future, according to the biannual CMO Survey’s August 2014 results. The survey, compiled by Christine Moorman of Duke University’s Fuqua School of Business in partnership with McKinsey & Co. and the AMA, polled more than 400 top marketers who were reached through the AMA’s membership and Duke University’s alumni network. Results showed that social media spending will increase 128% in the next five years, from 9.4% of marketing budgets today to 21.4% of marketing budgets in 2019.
While social media spending is expected to continue on its upward trajectory, 45% of respondents said that they still have difficulty demonstrating social media marketing’s impact on their businesses’ bottom lines. This inability to measure the ROI of social media marketing has been documented before. According to Social Media Examiner’s 2014 Social Media Marketing Industry Report, which surveyed 2,800 marketers online in January 2014, 63% of respondents said that they were unsure of how, or unable, to determine the ROI for their social media marketing. Fifty-eight percent of respondents believe that their Facebook marketing is ineffective or are unsure of its effectiveness, and 88% of respondents want to know more about how to measure the return on their social media marketing.
Why are marketers looking to fund social media programs when, for many of them, the results are elusive? It’s about hedging your bets on digital innovations, says J. Walker Smith, executive chairman of the London-based marketing consultancy The Futures Company and a Marketing News columnist. “We are still in the learning phase of social media. The presumption across the industry is that social media is the TV of tomorrow, so it is risky to put off getting to scale with digital investments, even if there is still a lot to learn,” he says.
“We haven’t seen the last of digital media innovations, and it’s hard to say what will survive,” he adds. “A lot of that will depend on whether the current line-up of players can consistently show measurable impact. If not, [brands] will definitely look elsewhere. But new innovations will have a hard time displacing today’s digital players if today’s players can turn the corner on showing measurable impact.”
For more on the CMO Survey’s August 2014 results, read Christine Moorman’s column in the October 2014 issue of Marketing News, available soon at ama.org/MarketingNews.