Chief marketing officers expect social media spending to balloon to nearly a quarter of their budgets in the next five years and mobile advertising to approach 10 percent in that time, but they remain confused as how best to map and navigate the digital landscape.
According to the biannual CMO Survey conducted by Duke University, social media has risen to 9.9 percent of marketing budgets and, according to 288 cmo’s from a broad group of U.S. businesses, will grow to 22.4 percent within five years.
Mobile advertising will grow faster from a smaller base. Currently 3.2 percent of marketing expenditures, it is expected to reach 9 percent by 2018.
But social media remains something of a mystery even to companies’ top marketing executives. Only 13 percent of respondents felt that they are able to accurately measure its effectiveness, although more than three in five — 61 percent — said they feel pressure from both their chief executive officers and boards to do so.
“Integrating social media activities with the rest of the company’s marketing strategy also remains a challenge,” said Christine Moorman, a professor at Duke University’s Fuqua School of Business and director of the study.
The survey was cosponsored by the American Marketing Association and McKinsey & Co.
Cmo’s expect their investments in marketing analytics — defined as “the creation and use of quantitative data about consumer behavior” — to nearly double as a percentage of their budgets in the next three years, to about 11.7 percent of marketing expense from about 6.4 percent today.
But, Moorman noted, companies aren’t using all the Big Data they’re receiving and report lower-than-expected returns as a result.
“Companies underutilize the marketing analytics they’ve requested and have available for decision making,” Moorman said. “So therefore it’s not surprising that marketing leaders also rate the contribution of marketing analytics to their company’s performance as decreasing as well. It’s clear that using marketing analytics remains a distinct challenge for companies, beyond the production of these sophisticated data.”
Optimism about the overall economy was at its highest level since the survey began in 2008 during the Great Recession — up to 69.9 percent of respondents versus 66.4 percent in August 2014 and up from a low of 47.7 percent in February 2009. Cmo’s expect their marketing budgets to rise 8.7 percent overall. That figure was 0.5 percent in the first survey, conducted in 2009.
While traditional, non-Web advertising is seen receding 1.1 percent in the year ahead, digital marketing is seen advancing 14.7 percent.
Companies also are more likely to outsource their social media marketing. More than one in six — 18.9 percent — are turning to external sources for help, up 1.5 points from a year ago.