Despite reservations, marketers continue to invest in social media. This could be because of how many people use social media in the world (4.57 billion people, according to a report by Smart Insights). They are also allocating higher percentages of their budgets to mobile marketing according to the February 2020 edition of The CMO Survey conducted by Dr. Christine Moorman at Duke University’s Fuqua School of Business and sponsored by Deloitte and the American Marketing Association. This survey also reveals which business verticals are investing the most in social media and mobile and who is hiring outside help to manage these efforts.
With How Many People Use Social Media in the World, There's a Growing Need for Outside Expertise
The typical business spends 13.3% of their marketing budget on social. As the social budget grows, businesses look for outside help to manage the effort. In the CMO Study, the percentage of businesses by sector who use outside agencies breaks out as follows:
- B2C Product 36.2%
- B2C Services 26.4%
- B2B Product 25.2%
- B2B Services 14.3%
For all of the increased focus on and investment in social media, businesses don’t rank the contribution from the format as stellar. Overall, on a scale of 1 to 7, social scores 3.4 in terms of contribution to performance. In the past three years, more organizations have found a way to show the impact on their business. In 2017, about 43.3% couldn’t show the impact, but this year, that number is 31.3%. Outside services that can effectively measure the ROI from social media will be noticed by businesses who want that information.
Mobile Expenditures Going to Social Ads and User Experience
The percentage of marketing resources devoted to the mobile format continue to climb steadily. Now standing at 13.5% of total marketing expenses, businesses say that number will rise to 23.3% in the next five years. Businesses realizes that consumers are spending more of their media time on their smartphones. They are capturing attention with mobile ads and by improving the user experiences as the following statistics show:
- Social ads 25.6%
- User experience 18.5%
- Other 18.0%
- Display ads 15.8%
- Video ads 12.0%
- App development 9.0%
In general, B2C companies spend the most on display and social ads. This isn't surprising considering how many people use social media in the world. Specifically, consumer packaged goods companies, retailers and wholesalers, and health care and pharma businesses spend higher than average on display ads. For mobile video, the category winner is manufacturers. Consulting services and education businesses spend the most on mobile social ads.
Businesses give an even lower score to mobile’s impact on the bottom line than they do to social media. The current score, on a scale of 1 to 7, is 3.2. This score would be higher if current mobile issues such as tracking a customer across the purchase journey (42.2%) and unclear objectives for the mobile marketing strategy (33.5%) could be successfully addressed.
To gauge how well your clients are doing in the social media and mobile ecosystem, run a Digital Audit on them. The tool is available from AdMall at SalesFuel.