A recent CMO (Chief Marketing Officer) report from Duke University finds social media analytics usages is disturbingly low.
In its annual review of CMO’s Christine Moorman – a classmate of mine at Pitt a couple of decades ago — found the use of social media analytics isn’t very widespread, despite increasing pressure to prove the worth of social media marketing campaigns.
According to the study — you’ll see results on this video once you get past the rather obnoxious self-promotion that takes up 1/3 of the time —
- 49% of CMO’s find it hard to prove the impact of their social media marketing campaigns
- another 36% know “qualitatively” that their social media marketing has some value, but can’t put a number to it.
Social media analytics by the numbers
Currently, firms spend about 5.5% of their marketing budget on analytics. This in itself is disturbing considering the cost of these tools. For firms having CMOs (usually rather large businesses) the cost of analytics software from vendors such as Adobe, IBM, and SAP are very substantial — on the order of 50k/ month. When you add the cost of trained analysts, the cost is much higher.
Of course, firms expect spending on social media analytics to increase significantly over the next 5 years. To my readers working in this space, this growth represents a huge potential for creating solutions that demonstrate the ROI of social media marketing campaigns.
Another disturbing fact in the Duke study is that only 29% of social media projects use data to support their efforts — a figure that’s declined consistently over the years.
Poor usage and integration of social media analytics into social media strategy probably explains why only 1/3 of firms can show the ROI (Return on Investment) of their social media marketing efforts. Meanwhile 2/3 of CMO’s say they face increased pressure to prove the ROI of their social media marketing efforts.
So, part of the problem lies in poor integration of social media into marketing strategy. Firms haven’t figured out a way to blend social media marketing with traditional media in an effective way. In fact, CMO’s surveyed only scored their social media integration a 3.9 on a 7 point scale — barely half way. B2B firms lagged behind B2C firms with integration rated only 3.4. I think several factors explain this lack of integration:
People – businesses assume social media marketing is only for young people, so they turn their campaigns over the new hires who don’t always work well with older employees because they have a different way of approaching work — one that blends work and play — that sometimes offends older employees. Some firms even turn over their social media marketing to interns! This shows a basic disconnect in understanding the role of strategy in social media marketing.
The newness of social media and analytics to measure social media resulted in a large number of analytic tools, with new tools introduced every day. And, many tools don’t have a clear competitive advantage, making it hard to firms to pick which tool to use. Instead, firms sit on the fence waiting for a clear winner to emerge. The tools themselves are difficult and time-consuming to use effectively and many don’t produce results easily interpreted or displayed visually.
Just take a look at the partial list I put together and you’ll see the variety of social media analytics tools at various price points. Many of these tools require the firm manage social media from the same interface as they measure it from. This creates a problem when a firm is already using social media management software that suits their needs.
Marketing skills – I find it dysfunctional that many of the CMO’s I know come from outside marketing — excuse me, it’s called Chief Marketing Officer. As a marketing professor, I find this a personal insult – a belief that the concepts we teach students have no value. And, it impacts the ability of CMO’s to integrate social media into their marketing programs because they don’t understand core elements of social media which reflect the softer side of marketing. Non-marketing CMO’s don’t understand about influence, the hierarchy of effects, consumer behavior, or other key elements for success with social media marketing.
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