In one of yesterday’s posts, I highlighted the new CMO Survey which reported on the growing optimism of leading marketers and their growth plans in 2011. To fuel this growth, large businesses will be increasing digital marketing spending and focusing on brand building. These businesses also project that their social media spending will grow significantly in the next five years
The survey results reveal that most large marketers spend about 5.6% of their budget on social media. This is a slightly lower level than the 5.9% they were spending in August of 2010. However, by February of 2012, look for large businesses to allocate about 9.8% of marketing budgets to social media. And this group of business leaders feels particularly bullish about this marketing channel. Survey participants predicted that their social media spend could rise to 18.1% of the marketing budget by 2016.
Currently there are significant differences in the levels of social media spending by business sector. Here are the planned spending percentages in the next 12 months by sector:
- B2B – Product: 7.4%
- B2B – Services: 12.2%
- B2C – Product: 7.9%
- B2C – Services: 11.8%
The survey also revealed that companies with less than $25 million in revenue spend the most on social media while companies with more than $10 billion in revenue spend the least. Currently, 25% of business leaders believe that social media is not yet well integrated with their firm’s overall strategy.
A recently published study by Ad-ology Research echoes some of these findings. Even small businesses have a strong interest in using social media. But these business leaders say that while social media generates business leads, the value of social media may all come down to “improving the customer experience.”
Clearly, businesses are committed to spending more in the social media arena but the expense may ultimately be categorized as customer service instead of marketing.[Sources: Moorman, Christine, Dr. Highlights and Insights. CMO Survey.org. Duke/ AMA. February 2011. Web. 15 Feb. 2011; U.S. Small Business Plans. Ad-ology Research.com. 18 Jan. 2011. Web. 15 Feb. 2011]