Popular metrics include customer actions and behaviors, rather than financial numbers
Marketers are working to measure social media investments in different ways, in the hopes that budgets will rise in this still-growing space.
Duke University’s Fuqua School of Business and the American Marketing Association analyzed how high-ranking marketers look at social media within their organizations for the September 2011 edition of their “CMO Survey.”
The study found that companies are setting aside a greater percentage of their marketing budgets for social media and plan to continue that trend going forward. As of August 2011, marketers were spending an average of 7.1% of their marketing budgets on social media and planned to increase that to 10.1% in the next 12 months. Within five years, marketers expect social media to account for 17.5% of marketing budgets.
But a look back over several past CMO Surveys shows that social media budgets are growing more slowly than marketers had expected or hoped. In August 2010, marketers reported that social media budgets were 5.9% of marketing budgets and expected that to reach 9.9% one year later—nearly 3 percentage points higher than actual August 2011 levels.
To prove the success of social media outreach and keep up budgets, marketers are looking at different metrics. Between August 2010 and August 2011, “The CMO Survey” found that customer-relationship-based activities became more popular to measure, while financial metrics lost steam.
Site visits and page views were still the top social media metric used by US marketers, with 52.2% of respondents highlighting that tactic in August 2011. However, counting the number of followers or friends jumped to 34.1% of respondents, up from 24% in August 2010, and buzz indicators or web mentions also increased, from 15.7% of respondents in 2010 to 20.5% in 2011.
Meanwhile, use of sales levels as a metric dropped from 17.9% of respondents in 2010 to 13.3% in 2011, and fewer also measured revenue per customer, with only 9.6% of respondents highlighting that option this year, down from 17.2% in 2010.
Marketers are currently focused on customer relationship management and working to build these relationships on social media, not just on encouraging sales or higher revenue per customer. This is an interesting trend, as many businesses still struggle to show how these softer, relationship-based metrics relate back to the bottom line. But if companies can show how socially engaged consumers become loyal, repeat customers who share information about the brand via word-of-mouth, these softer metrics may become even more important.
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Check out today’s other article, “Online Sports Viewers Gain Marketer Attention.”