Social media spending is still a fraction of total marketing spending in an era where e-commerce spending is exploding and the influence exerted by consumers social graph is powerful.
Opportunities to increase sales through social media marketing argue for MORE social media spending, yet this spending lags. WHY?
According to a recent HBR article, several factors account for relatively low social media spending:
The folks responsible for allocating a firm’s marketing budget still don’t “get” social media. They don’t understand how social media marketing works, they don’t understand how social media marketing supports their brands, and they don’t understand younger employees who use social media. Many CMO’s still think social media is a waste of time or try to manage it using the paradigm of traditional marketing – they want everything planned in advance and approved before posting. That just doesn’t work in social media.
Because they don’t understand social media marketing and don’t really believe in it’s benefits, they a don’t allocate sufficient resources to social media spending in both money and personnel.
HBR proposes that social media spending won’t advance significantly until it’s younger champions “come of age” taking over the ranks as senior executives who control the purse strings.
Data remains a two-edged sword for social media and impacts social media spending. While tons of data exist, knowing how to use that data to support the ROI of your social media spending remains problematic. Vanity metrics, such as #of fans, still dominate social media reporting.
However, having data isn’t as much a problem and not knowing how to use the data. Older marketing executives are used to tap-dancing around the issue of returns from their endeavors with touchy-feely data like awareness often measured using flawed methods that produced false data. These executives don’t have the analytic skills to support ROI in today’s world that relies heavily on metrics to support business actions.
Some firms hire a marketing technology director who reports to the CMO or CIO. Others use smart agencies to develop effective social media marketing strategies. These tech-savvy folks combine talents in technology, marketing, and advanced analytics that help firms optimize their social media spending.
A few, especially smaller businesses, make do by hiring younger worker who grew up using social networks. Unfortunately, for the firms, managing your personal network of friends and managing a businesses social media marketing strategy are worlds apart and these young folks can cause serious damage to the firm’s reputation. For instance, look as ASUS who offended ½ the globe by Tweeting out images that objectified women.
While these young folks are well-intentioned, they lack the experience and training to effectively manage a firm’s social media marketing alone. Of course, there are exceptions, but I’ve taught 100’s of college marketing majors interested in social media and, while I’ve found several excellent employees, I’ve not found 1 who’s ready to assume a leadership role in developing social media marketing strategy. At the end of the semester, they still only have rudimentary skills is SEO, SEM, or analytics. Their limited consumer experience means they don’t really know how to build a social network around something mundane, like appliances or healthcare services. Their expertise is more tactical, than strategic.
So, if you want to optimize your social media spending, I would stick to hiring someone with significant experience and a proven track record in managing social media. Take a look at their credentials in building a network across several social platforms, including managing engagement on the company’s website or blog. How has the network grown under their guidance? How has engagement increased? Is the conversion rate up? How are they managing the sales or conversion funnel? What insights have they developed about the customers of their current firm?
Wanna learn more. I’ve got a lot more insights on social media analytics from my week with IBM. So, be sure to bookmark this site so you can come back tomorrow. Or, better, sign up for my email newsletter to learn more about social media analytics and marketing strategy. If I’ve whetted your appetite to use more analytics to optimize your marketing, let me show you how Hausman and Associates can help with our unique virtual agency model that provides cutting-edge social media at a reasonable cost.