Corporate marketing leaders see social-media channels as an important tool and will be boosting their spending in that area, according to a report released Tuesday and based on a semi-annual survey of chief marketing officers by Duke University’s Fuqua School of Business.
The survey drew answers from 249 CMOs, and they told Duke that they plan to push spending on social media from 7.1 percent of their overall marketing budgets now to 10.1 percent over the next year and to 17.5 percent in the next five years.
Business-to-consumer social-media marketing is already at that level and will rise more than the average, the study found. That channel averages 10.5 percent of marketing budgets now and will rise to 24 percent, the CMOs told Duke.
“These findings dispel the notion that social media is just a fad,” said Christine Moorman, the T. Austin Finch Senior Professor of Business Administration at Duke’s Fuqua School of Business and the director of The CMO Survey.
“Social media is fast becoming an important strategic weapon in company arsenals and has proven to be a valuable tool in acquiring and engaging customers,” Moorman said. “Effective use of social media is no longer an option for companies – it is a requirement. Going forward, companies which most effectively deploy social media will be best positioned to serve their client bases, particularly as digitally-savvy customers assume a greater percentage of buying power.”
For all the planned spending, however, executives say they have a lot to learn about the tools.
Duke said marketers admitted they have a ways to go toward integrating social media in their strategy. On a scale of 1-7, with one being “not integrated at all” and seven being “very integrated,” almost a quarter of marketers (22.3 percent ) selected “one” to describe how well their company’s social media is integrated with the firm’s overall strategy, the study reported.
The number was only slightly better for integration within the marketing strategy – 16.9 percent selected “one” for this question. Only 9.1 percent chose “seven” for social media being integrated within the company’s strategy (the average was 3.4) and 12.8 percent selected “seven” for the marketing strategy (the average was 4.0).
Executives said they are planning to spend more on all forms of marketing. They were polled from Aug. 1-23, when S&P downgraded U.S. credit and a Congress was fighting about the debt ceiling, but they said marketing budgets are expected to increase 9.1 percent and companies plan a 7.2 percent increase in marketing hires over the next 12 months.
“These results show that while executives feel the fear of all the doomsayers operating in financial markets, these same executives are reporting positive performance gains and are spending despite the negative news,” Moorman said. “I conclude that these sources closer to company operations, especially in revenue and demand-generating activities like marketing, are trying to tell us that market reactions over the past month may be grossly exaggerated.”
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