Although CMOs say that social media spending currently accounts for 7.4% of their total marketing budget, they forecast that share to increase 46% to 10.8% in the next 12 months, according to findings from Duke University’s Fuqua School of Business, which released its latest CMO Survey in February 2012. And spending will undergo an even more drastic upswing in the next 5 years, with CMOs predicting that social media spend will account for 19.5% of their total marketing budgets, almost tripling current levels.
This trend towards higher social media spending was also found in a December 2011 study conducted by StrongMail in conjunction with Zoomerang. 55% of business leaders responding to that survey said they planned to increase their social media budgets this year, making it the top channel cited for increased spend behind email marketing (60%).
The increase in spend may be a reflection of marketers’ passion for the channel: data from an Econsultancy and Adobe survey released in February 2012 indicates that social media engagement (54%) is the most exciting digital opportunity for global marketers this year, far ahead of other top 3 opportunities company marketers are passionate about, including mobile optimization (38%), content optimization (37%), conversion rate optimization (31%), brand building/viral marketing (27%), and video marketing (24%).
Highest Spending Levels Among B2C Product Firms
Meanwhile, the CMO survey shows that B2C product companies lead all industry sectors in terms of spending allocated to social media, dedicating 9.6% of their current marketing budgets to this channel, ahead of B2C services companies (8.4%), B2B services companies (7.4%), and B2B product firms (6.2%).
Looking at the next 12 months, the same trends apply, with B2C product companies expecting 15.3% share of their budgets to be allotted to social media, compared to 11.7% for B2C service companies, the nearest category. In 5 years, B2C product companies again predict the largest share of marketing budgets to be spent on social media (23%), though B2B service companies and B2C service companies expect to be relatively on par in terms of the share of spending they will dedicate to the channel (19.1% and 19%, respectively).
Social Media Integration Still a Challenge
Although CMOs expect to increase their spending on social media, they admit that the channel remains poorly integrated with their firm’s overall marketing strategy. In fact, 18.4% of respondents rated the extent of their integration of social media a 1 on a 7-point scale, where 1 represents no integration at all. And only 21.1% of the CMOs rated their firm’s integration of social media efforts a top 2 box score.
Overall, respondents gave the effectiveness of the social media integration a mean score of 3.8. This was highest among B2C service (4.5) and product (4.4) companies, and lowest among B2B product and services firms (both at 3.6).
Social Media Employment Rises Y-O-Y
Data from the CMO survey indicates that respondents have an average of 9 people employed in-house to do social media for the company, which is a significant rise from an average of 5.3 a year earlier. Similarly, the average number of individuals from outside vendors providing social media support for the company increased from 1.8 to 4 during that timeframe.
About the Data: The CMO Survey is conducted online twice a year. The latest survey was fielded from January 31 to February 16, 2012. The sample size was 269, of which 91.2% were VP level or above.