Marketers’ spending on social media has tripled in the past seven years but falls way short of where marketers expected it to be when they peered into their crystal balls in 2009.
That’s according to the CMO Survey conducted by American Marketing Association, Deloitte and Duke University’s Fuqua School of Business, which found that social media now accounts for 11.7% of total marketing spend.
That’s a big jump from where it stood in 2009 (3.5%), but still well short of the 17.5% marketers predicted it would account for today.
Will it ever get there, and what’s standing in the way?
According to the CMO Survey, almost half of those polled aren’t able to determine how their social spend has benefited their business, and less than 5% indicated that social “contributes very highly to company performance.”
Is social headed for a decline?
Those figures, for obvious reasons, are a big problem for the social media marketing ecosystem.
And it gets worse: Christine Moorman, a Fuqua School of Business professor and the CMO Study’s director, hinted that social campaigns could see declining returns now that marketers have flooded social platforms, resulting in a social exodus of sorts.
“Consumers are saturated with company involvement in social media, so that marketing is not as effective perhaps as it used to be. So firms are reducing their spending levels as a result.”
Obviously, some social players are thriving. Facebook continues to grow its revenue at a rapid clip on the back of its mobile ad business, and upstarts like Snapchat appear to have no shortage of brands interested in marketing their wares on their platforms as they launch new ad products.
But Twitter is reportedly lowering minimums on some of its ad offerings in an effort to retain advertisers, even as it attempts to charge a premium for new offerings like Promoted Stickers, hinting that the revenue growth seen by some players could be more a result of shifting within social budgets rather than growth of those social budgets.
Interestingly, some large advertisers like P&G are pulling back on targeted social ads and pouring more money into television, suggesting that social’s ability to grow its piece of the pie could depend less on targeting and direct response value and more on mass reach and branding power.
That would put social in the same game as television, and if players like Facebook are eventually able to compete head on for television dollars, the amount of money allocated to social could live up to marketers’ earlier expectations, and then some.