Senior marketers report spending 9.8% of the marketing budget on social media — here and now. They expect that figure to rise to 13% over the next 12 months – and to 18.5% over the next five years.
The benchmark is courtesy of the latest CMO Survey, a semi-annually study conducted by the Fuqua School of Business at Duke University. The latest edition includes responses from 349 marketers where more than 90% hold vice president titles or above.
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The social media spending numbers are similar for marketing shops focused on B2B services and a bit lower for B2B product organizations, like software companies. In the grand scheme, it’s a sizeable investment, that boils down to just under one-fifth of the marketing budget going to social media.
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But marketers have made budget predictions like this in surveys before – and it hasn’t come true as the chart nearby indicates. To borrow the language used in the insights reporting, “Social media spend does not grow at prior rate: fails to meet 5-year projections.”
The survey points to the inability to prove the value of social media as the root cause:
- 45% say they are unable to show the impact of social media;
- 38.6% have a qualitative, but not quantitative sense for the impact of social media;
- On a scale of 1-7, where 7 is best, marketers gave social media a 3.3 when asked how social media contributes to company performance.
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This is not new or controversial. The industry has been debating the ROI of social media for about a decade.
What’s the ROI of putting your pants on in the morning?! — that’s the quip in response. Google it. It gets retweets. It doesn’t get budget.
This time around, however, I think it’s different because the platforms and underlying algorithms have changed. All of them. The difference is so stark, I don’t think we can call it “social media marketing” anymore – it’s just “advertising.”
All the major platforms are increasingly depressing visibility unless the content is sponsored. Even then, these platforms are designed to keep people on the page. Social media sites don’t want to send users to visit your website – the goal is to keep them engaged on the platform.
This means the idea of buying traffic from a social media platform is diametrically opposed to the way the software is engineered. No matter how social media savvy you or your brand is, the cost is likely to continue to rise.
There’s a good case to be made for social media advertising in many marketing shops – but dumping one-fifth of the budget into it strikes me as wasteful. Let’s consider this question from a different perspective: if you were to get 10% more marketing budget next year, would you spend it on advertising?
I didn’t think so.
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