No Budget for Social Media?
I was totally flabbergasted when I read in Internet Retailer about the recent Coremetrics’ second annual “Face of the New Marketer” survey. The number that generated this response was this:
78% of the 116 senior marketing managers responding to the survey see social media marketing as a way to gain a competitive edge, only 7.75% of total online marketing spend is devoted to it
So let me make sure I understand this. 78% of senior managers say that they know that social media marketing can and will give them a competitive edge. However only 7.75% of their total online marketing budget is actually dedicated to social media marketing. And how do you think that online budget is being spent? 33% of marketing spending going to online advertising and 28% to online promotion design and implementation.
For the study Coremetrics defined social media marketing as user-generated content, including reviews, RSS feeds, podcasts, wikis and marketing in virtual worlds.
So are these senior marketing managers running to add budget dollars in 2008 for social media marketing? Not exactly: Most marketers surveyed said they had plans to implement a social media marketing program at some point, even if not within the next 12 months, Coremetrics said. 50% said they plan to implement user-generated content or reviews, 22% a blog, 20% social networks, and 20% and RSS feed.
One reason that marketing executives give for not spending money on social media is a lack of tools and expertise. To that I suggest that these companies stop relying in traditional agencies that are still struggling with PPC marketing, and instead hire a company with social marketing experience.
The final quote of this depressing article was this from John Squire, senior vice president, product strategy at Coremetrics:
“Marketers are aware of the impact that social media marketing can have on their overall program but view it as uncharted territory, not worthy of their budget. As more and more marketing tools become available, we’ll continue to see a greater divide between the perceived importance and resource allocation. The ability to accurately monitor the ROI achieved by new marketing tools will help marketers take that first step toward incorporating new digital marketing programs, as well as rethink the effectiveness of current campaigns.”
To summarize, senior marketing managers know that social media marketing will give them a competitive edge. But they view social media marketing as not worthy of more than 7.75% of their budget. Can someone explain this to me?
Filed under Brand Marketing, Social Media Marketing, Social Media Optimization : Comments (14) : Nov 5th, 2007
November 5th, 2007 at 10:50 am
Lack of knowledge. They know of social media, but that’s about where their knowledge comes to an end. You can’t really spend time and money on it, if you don’t even know where to start, can you?
Or at least that seems to be the only reasonable explanation I can think of.
November 5th, 2007 at 10:58 am
Sad but true, my take is the budget makers are just chiming in on what they read, but that they don’t understand.
We still are on the front edge of the curve. Few people have even heard of SMM and SMO. In short, they still don’t get it yet.
November 5th, 2007 at 12:17 pm
I agree with digitalnomad - it’s too early, still. Check out the budgets and commitment in 2009.
I’m working with a couple of companies who are looking into blogging, but see it as a channel for the same old marketing message. I’ve had to dissuade them from blogging until they get that it’s not about advertising, it’s about community building.
Feels like SEO in 2002…
November 5th, 2007 at 1:43 pm
Not only is it new, challenging seasoned marketers to explore new technologies, communities, and new modes of thinking about message-distribution (ie “relinquish control”!!!), but it also opens a whole new can of worms around measurement. Every company I talk to is interested in my experience with social media as a marketing tool… but they don’t know what questions to ask or how to measure ROI. Our task is to educate and provide evidence/data in support of adapting SMM as a tool (case studies the ones found here are a good start http://nowisgone.com/category/case-studies/)… and of course, to keep pushing the envelope!
November 5th, 2007 at 1:46 pm
I think it’s pretty obviously because of two things:
First, the promise of social media marketing, in the eyes of many, is to get cheap or free marketing. The people making these budgets are hoping that they’ll spend a little to make a blog or funny video or whatever, and then it’ll “go viral” all by itself without their having to spend another dime.
The other thing is that PPC and similar forms of advertising are easy and they work. You can get great ROI numbers from PPC, so there isn’t a huge incentive to spend on social marketing.
November 5th, 2007 at 2:54 pm
Social Media is less expensive than traditional media, and even most forms of online marketing cost more.
If they’re spending too much more, then something is going terribly wrong.
November 5th, 2007 at 8:13 pm
[…] David Wilson placed an observative post today on No Budget for Social Media?.Here’s a quick excerpt:For the study Coremetrics defined social media marketing as user-generated content, including reviews, RSS feeds, podcasts, wikis and marketing in virtual worlds. So are these senior marketing managers running to add budget dollars in … […]
November 6th, 2007 at 12:21 am
Lack of knowledge, fear of failure, perhaps most importantly the disconnect between goals and strategy. Marketer’s mission is to increase sales, but a social media strategy may seem to have little to do with sales leads. Dell is focusing its social media strategy on customer service, and product development, with some public affairs thown in. Macromedia before Adobe was the same way. (not sure exactly what Adobe is doing now.) Following these types of strategies don’t appear to have much to do with sales strategy, and don’t come under the budget of the marketing department. I think there has to be a realignment of what the traditional marketing department is all about. It’s not just about acquisition and retention, it’s also about market research, customer service and product development.
November 6th, 2007 at 4:02 am
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November 6th, 2007 at 4:33 am
Social media will certainly become the most sought after online marketing channel since it allows flexibility and depth in targeting a user base than other traditional(PPC, Banners, etc..) streams of online marketing/advertising. At the moment, even as an entrepreneur i am trying my best to get attention to my business (www.Qiu-inc.com) through viral means through proprietary social networks. This at the moment, offers a lower cost solution to increase visibility and get the message across.
The MS deal with Facebook is also an indication of the shift in thinking of the way online marketing is headed towards.
November 6th, 2007 at 9:15 am
I agree these results are shocking - especially to those in social media marketing - but at the same time this survey was only conducted with 116 marketing professionals. To me, this seems like too small of a sample size to really have conclusive statistics.
November 14th, 2007 at 12:46 am
There are many reason to low budget for Search Engine Marketing. Because this new trend for many unaware persons, lack of knowledge how to deal in search engine marketing, how to optimise in social communities. How can they use or utilize the features of Social communities or groups.
December 11th, 2007 at 1:56 am
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January 27th, 2008 at 6:33 am
I agree I thinkg the problem is with social media is not a yet discovered marketing solution for some. There is so much publicity from marketing companies that are charging outragous amounts to get traffic to ones site. Learning the free methods, and social media could really help network marketers. But for some to take the time to teach that may cut into high dollar advertising. But watching however social media is finally starting to get more exosure due to people like yourself.
Megan
http://www.PassportMentors.com