Social media are poised to reach the next tier of the marketing ladder.
According to a survey of 468 U.S.-based chief marketing executives in a range of industries, social media’s share of marketing budgets, about 8.4 percent of the total spend now, is expected to rise to 11.5 percent in the next year and grow steadily to about 21.6 percent over the next five years.
The findings of the annual CMO Survey were universal across business sectors, with all four of the categories covered — business-to-business and business-to-consumer, for both products and services — averaging under 10 percent now and expected to exceed 20 percent in five years. The product portion of the business-to-consumer sector expects the most dramatic increase, from 9.6 percent now to 24.6 percent in 2018.
“Companies are searching for novel ways to interact with their customers that will drive the growth of their companies,” said Christine Moorman, director of The CMO Survey and T. Austin Finch Sr. professor of business administration at Duke University’s Fuqua School of Business. “Unfortunately, marketers are behind the curve with their current levels of social media expenditure, given the amount of time customers spend engaged with one another and with companies online. The good news is that marketers are seeing the imperative to rectify this through increased investment in social media marketing in the upcoming years.”
The marketing executives gave themselves passing but not high grades for the integration of social media into their organization’s overall marketing strategies, Moorman said. Asked to evaluate their organizations’ integration progress on a scale of one, for poor, to seven, for excellent, the average was 3.8. Less than one in 10 — 9.9 percent — rated their strategies as “very integrated,” while a far higher share — 15.2 percent — said social media weren’t integrated at all.
The chief marketing officers project a 2.7 percent drop in traditional advertising over the course of the year as social media and other forms of digital marketing gain moment.
Among the other findings of the study:
• Marketing executives ranked Canada (25 percent), Western Europe (22 percent) and China (15 percent) as having the greatest potential for revenue growth among U.S. marketers;
• Marketing hiring is expected to increase 5.4 percent, 1.1 points lower than a year ago, and
• Marketing outsourcing remained unchanged at 3.5 percent.
The CMO Survey was founded in August 2008.
Earlier this year, a study by the Luxury Interactive unit of Worldwide Business Research and ShopIgniter found that 60 percent of marketing executives at 130 luxury companies expect digital marketing to be their most important marketing activity by 2015. Less than a third currently devote more than 40 percent of their marketing budgets to digital efforts.