Despite Recession, More Than 50% of Marketers Increase Spending on Social Media
In a recession, budgets are tightened, jobs are cut, and those who remain are expected to do more with less. Given this type of economic reality, it's surprising to hear of an industry reporting an increase in spending on anything, much less on something as new as social media. Yet that's exactly what's occurring. According to a new Forrester Research survey of 145 global interactive marketers in both B2B and B2C companies with more than 250 employees, the use of social media as a marketing tool is on the rise. What's more, Forrester reports that over 50% of marketers said they will be increasing their spending on social media marketing in the coming months.
Part of the reason for this increased spending is the low cost of social media tools. Compared with larger expenditures like advertising, social media requires much less investment. In fact, three-quarters of those surveyed who knew their budgets said they allowed for $100,000 or less for social media tools over a 12-month period.
It's also easier for firms to increase spending on social media applications because they aren't yet formalized line items in marketing budgets. Because of their relatively new and still somewhat experimental nature, marketers aren't necessarily predetermining the exact amount they'll spend on these types of applications. Instead, some marketers (45%) pull together funding for social media projects as needed while others (23%) scrape together funds from wherever possible to pay for their various social media efforts.
Yet despite the unconventional methods which are used to fund many companies' social media investments, 53% of marketers believe they will increase their spending on these initiatives over the next six months. Another 42% expect their investments to remain the same. That makes sense since almost all marketers surveyed were already using some form of social media, whether blogs, social networking sites, or user-generated content.
Unfortunately though, marketers who still fund social media projects only as experiments may be putting future initiatives on shaky ground. Without concentrating on measurable objectives, it will be difficult to justify further investment in the future. Businesses also need to understand that social media efforts should be analyzed for effectiveness based on things like customer awareness through activity, interest through interaction, and intent to buy through registration and/or questions. These are the types of successes that social media can deliver; less important are traditional web analytics like page views.
Also key to long-term success in social media is having the necessary assets on hand. For example, social media strategists and community managers should be dedicated resources.
To prove the value of social media to the business, Forrester recommends marketers start with a listening platform and then integrate social media marketing metrics like share of voice and engagement to demonstrate the value of these new tools.
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This is a great article. I'm sending it out to the entire staff at my company. On a much smaller scale, I noticed a lot of the same trends when I spoke to a few dozen companies here in Silicon Valley. I wrote down some of my thoughts in this blog post. Would love to join in a discussion about this trend.
http://mediaroi.notlong.com
When I first read your headline and the first paragraph it appeared that funding was incremental in the overall marketing budget. However, I think the real story is in Fig 2 and the shift in marketing spend. The data tells me that spending may not change that significantly but where it is spent is going to be quite different.
I'm definitely in agreement that it is one thing to spend more in an area but not support it in the long term. Social media marketing is not a one-shot marketing effort. This is relationship building and needs nurturing.
This is a great article backed up by some very good report and trends from Forrester Research. This is something that we have predicted will happen during the downturn. It would also be interesting to get a little more detail on the "user-generated content" component considering it is third in the preferred channels that marketers would be willing to shift to - how and what channels would these cover?
The most commonly encountered obstacle that I have faced while talking to clients regarding use of social media for marketing is the one about measurements and criteria for success - everyone wants to know how to measure ROI and this leads to them being skeptical about the use of social media for marketing. This report however is encouraging and could serve as a good reference point while talking to marketers.
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I'm not surprised that there is data to back up this trend and glad to see it coming from credible sources.
In the current economy the new mantras are certainly- doing more, with less; changing "the game" by employing new tactics to seize the opportunities that exist. The use of Social Media plays well with both of these. I think we'll hear a lot more about the influence of Social Media on Sales cycles and Customer Service, amongst other things...
If relationship building plays as big a role in business over the next few years as I believe it will, then this is a trend that we'll see continue along the very interesting path it's only just begun.
It's hard to get too excited about this report from Forrester. Those surveyed were interactive marketers facing the toughest economy of their lives, and they've all been told by their bosses to do more with less. So it's more surprising that the number wasn't closer to 100% saying they'll do more SM.
Most important in the report was the advice from Forrester that metrics be identified and measured so the impact of efforts is quantified, so next budget cycle they can fight for more funding from the basis of proof that it works.
This makes sense. this is the time to spend budget on social media programs, not take them away. Utilize the resources and get creatives with content to try to build viral buzz.
So when you say social media are you saying that companies are putting money to appear on digg/twitter/reddit/mixx and all that? =o
This is a great article and the data in the research report is consistent with the findings from our recent research report, Surviving and Thriving in the Downturn conducted by The Online Community Research Network. The intention of the report was to get a broad look at how the role of online community in organizations is being affected by the down economy, what effect the economy is having on community stakeholder’s attitudes and what tactics community managers and strategists are employing to thrive during the downturn. Our research indicates that the majority (55%) of the respondents' executive management and stakeholders view online community more valuable in the economic downturn. Online communities and social media programs offer low cost and highly effective marketing tools to build loyalty, brand awareness and engagement.
I think that we will see companies trying new and creative marketing campaigns with social media tools in 2009 – like Mars did with their Skittles website redesign. Some of the key components of success with online community and social media programs this year are going to be around tracking the effectiveness of the programs and actively making changes and adjustments to our social media campaigns to ensure that we are getting the most reach for our efforts. Another key factor that we found in our research is that many people are planning to report up clear value and ROI of online community and social media programs to their management teams.
Go here for more data from our research report: http://www.forumonenetworks.com/thrivingreport
This is a confirmation of the way things are going for marketers. The thing is 99% of us work for small to medium sized firms, where budgets are even tighter. So the new rules are even more relevant to us.
First off, I am all for social media marketing and the benefits of the marketing channel. I feel as though the increase in social media spend is displacing a lot of spend in other channels with a proven track record of ROI. It's interesting to see email take a hit, which was once considered the cheapest form of marketing during the last downturn.
These points are great. Very inspiring specially this time of recession.
Great article and important information. The importance of measurement - regardless of budget - cannot be overly stated.
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Really great write up Sarah.
A pity that we can't see the data for small companies. Perhaps they just don't have this kind of budget.
I am reminded that the Sony Bravia advert set in SF with all those coloured balls bouncing down the steep streets was - for a while there - the most watched advert in the States. However, it was never broadcast there! It all happened on YouTube and cost the advertiser of those 10m eyeballs was precisely nothing.
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I completely agree. Most of my business is coming from clients who realize the importance and the cost-effeciencies of social networking. It's the central theme of my marketing/pr company.
I think it's great that we have some data to back up the increase in social media attention from a marketing perspective. We have seen an influx of interest from our clients and we are not taking this lightly. We've encouraged many to work with us on creating tweets, blogging and investing in SEM to help stay afloat. More fresh content that is updated on a regular basis will keep up traffic to your site. The moment you let things get stale you lose interest and that's not always easily replaced. This is not the time to look outdated.
Hope we hear about more articles like this one which give us a leg to stand on when discussing social networking opportunities with our clients.
A great article. As a social marketing company, we see more our clients to use social insights for new product development, market research, PR and customer services.
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we at webjam.com are experiencing first hand what the article is mentioning through a booming demand for our white label social publishing platform allowing to engage, empower and monetize audience, members or clients. While Q4'08 was tough, it is clear that companies have now reallocated their budget and marketing resources toward understanding better their customers. We can only confirm a huge interest for tools that allow brands to harness the power of social media such as http://www.webjam.com/branded_services
Yech, i have the some ideas for inrease social spent on ads cost,more and more fans will focus on digg,facebook, youtube ect social website:)
The key components of success with online community and social media programs this year are going to be around tracking the effectiveness of the programs and actively making changes and adjustments to our social media campaigns to ensure that we are getting the most reach for our efforts.
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