New research shows that despite plans to drastically increase social media spend in the next five years, marketers are struggling to prove its impact on overall company performance.
The February 2016 edition of The CMO Survey has discovered that social media spend will account for 20.9 percent of marketing budgets (10.6 percent currently) across industries in the next five years. However, there is room for performance improvement as 40 percent of marketers state that social media’s contribution to their organization’s success has been “below average.”
“The findings show that while social, mobile and analytics spending is on the rise, they’re falling short when it comes to boosting the bottom line,” said Deloitte CMO Diana O’Brien. “It’s clear that more data doesn’t always equate to more insight, and new technology has no intrinsic value to marketers unless it helps a company better understand its customers and enhances the customer experience.”
About half (49 percent) of marketers claim that social media’s contribution to company performance has been “average,” while 10 percent say that it’s “above average.” However, only 11 percent of marketing leaders state that they have been able to quantitatively prove the impact of social media.
To improve performance, the authors of the report suggest that marketers should better link their social media efforts to the organization’s overall marketing strategies. According to the data, on a 1-7 scale (1=not at all integrated and 7=very integrated), marketing leaders report an average score of 4.2.
Additionally, the survey results show that marketers can also do a better job of integrating customers’ social media information with other customer information. Marketers gave themselves a 3.4 (1-7 scale) customer integration rating.
Social Media Marketing and ROI
This is not the first research that has shown the difficulties associated with measuring the impact of social media marketing on business. The “2015 Social Media Marketing Trends” report from TrustRadius found that measuring ROI is the top obstacle for marketers when it comes to utilizing this channel.
Approximately 80 percent stated that engagement has been their most valuable KPI for gauging social networking success. About 61 percent claimed that their audience was the most important factor.