When you read a research report featuring survey responses from your peers, the ideal scenario is to see data that helps point towards a new strategy or an action you need to take. When Canadian CMOs look at the recent findings from the 2016 CMO Survey, however, I suspect the most common reaction will be a simple “Phew!”
Conducted in partnership with Deloitte, the American Marketing Association and Duke University’s Fuqua School of Business, the CMO Survey of several hundred marketing leaders indicates spending in the function will go up more than 6.9% over the next year, mostly as you would expect, with a 3.2% decrease in traditional advertising and a 13.2% increase in digital spending. When you break that down further, however, it gets a lot more interesting.
Social media, for example, currently makes up 10.6% of marketing budgets today, higher than 5.9% for mobile tools and 6.7% for marketing analytics. Yet social media also ranked proportionally lower in terms of how CMOs feel it contributes to the company performance, at 3.1 out of seven, where seven would indicate strong performance.
In presenting the recent findings, Deloitte quoted its own CMO, Diana O’Brien, to put it in context:
The findings show that while social, mobile and analytics spending is on the rise, they’re falling short when it comes to boosting the bottom line. It’s clear that more data doesn’t always equate to more insight, and new technology has no intrinsic value to marketers unless it helps a company better understand its customers and enhances the customer experience.
I can actually think of a couple reasons why social has yet to pay off for a lot of marketing departments. First, social media services in general have yet to perfect the features they offer advertisers. This was reflected in LinkedIn’s recent decision to shut down its ad network, but you also need to take into account that Facebook Canvas and Twitter First View are still in their infancy. Despite years of hype and speculation about the benefits of social media for brands, this is far from a mature space.
The other problem is marketing departments, in many cases, haven’t figured out how to use social media in organic (read: non-paid), authentic ways to tell their stories. Some are optimizing it as a customer service channel, which might be great if it takes some of the workload off call centres, but that’s not the same thing as having meaningful conversations with your customers. In that sense, the relationship between brands and their audience on social media is still the equivalent of a first date — somewhat interested, somewhat awkward, and still a long way from relaxed and trusting.
And finally, of course, there’s the difficulty of attribution and integration of social as a channel within everything else on the marketing department spends on. This is not unique to social media, of course. In fact, only 3.5% of execs told the CMO Survey they felt they were effective at putting together customer information across purchasing, social and other forms of communication. You can’t really get to this in social media, however, unless you’ve already dealt with the first two challenges I’ve described above.
The real focus for CMOs, however, shouldn’t simply be justifying the cost and value of social media to what the marketing department does. The focus should be on what the overall business objectives are and optimizing social media efforts to reach those objectives faster. If you haven’t figured that out yet, this research should at least make you feel a little less alone — sort of like the power of social media.