Are CMOs wise to place so much emphasis on social media?
As a new study claims that a majority of CMOs still struggle to prove ROI from social media ad spend, marketers are increasingly learning that placing their focus on social channels does not guarantee success.
When asked to assess the impact of social media spend, 40% of marketing leaders said it made a ‘below average’ contribution to their company’s performance, while 49.8% said it had only an ‘average impact’.
With channels such as Facebook, Snapchat and Instagram rapidly developing their ad platforms and mobile establishing itself as a key growth channel, brands are rightly shifting their approach.
Earlier this year, Heineken’s global director of marketing Soren Hagh told Marketing Week that digital ad spend would “surpass 50%” of the beer brand’s ad budget within two years. Major brands are also changing their approach to typically traditional sporting events, with the likes of Pepsi recently spending 50% of their Super Bowl ad budget on social media.
However In the report by The CMO Survey, which polled nearly 300 top US marketing executives, only 3.4% said that social media had made a ‘very high’ contribution to profitability despite the fact that it will go on to account for a fifth (20.9%) of marketing budgets over the next five years – up from a 5.6% share in 2009.
So what must marketers do to ensure that social media campaigns actually generate meaningful returns? Well, for a start, marketers must stop placing so much focus on targeting.
Jess Burley, global CEO of The&Partnership’s media agency m/SIX, explains: “Traditional media channels work because of their glorious inefficiency, reaching lighter category buyers which marketers are happy to ignore yet critical to brand growth.
“Faced with the potential to target exactly the right people, most marketers view social media as a brilliant addition to their media mix. But in their relentless pursuit of a narrow target audience, many social media campaigns are sacrificing broader reach for efficiency.”
Changing the measurement process
Determining how best to measure the success of a social campaign is also an issue. According to the CMO Survey, some 47.9% of senior marketers are yet to show any impact from social media, while 40.6% can only show a ‘qualitative’ impact. Just 11.5% of marketing leaders, meanwhile, have been able to show the ‘quantitative’ impact social media has on their company’s performance.
Jim Coleman, UK CEO at We Are Social, says brands need to ‘get smarter’ when it comes to measurement or risk failing with social.
“Brands still have a tendency to measure success on social metrics such as likes and shares – marketers investing in social need to get smarter when it comes to measurement – and quickly.”
He urges: “Regardless of platform, measurement starts with a clear expression of the business goals the activity is laddering up to, a clear definition of marketing objectives and a robust measurement framework that tracks these against defined targets.
“In social, these frameworks go beyond “social media analytics”; they include areas such as brand equity measurement, web analytics and attribution modeling to closed-loop ROI and media mix modeling.”
Ensuring there is balance
In 2016, agencies expect social budgets to increase by 33% and brands expect a 21% rise according to the UK Internet Advertising Bureau (IAB). Yet both are seduced by social at the expense of balance, according to Alex Kozloff, the IAB’s acting marketing director.
“Social shouldn’t be used instead of traditional media but in combination – the two together have proven time and time again to be a very effective marketing tool,” she explains.
We Are Social’s Coleman agrees: “The biggest opportunity will come from understanding and leveraging social behaviour – this can have a huge impact on a brand’s success. Campaigns such as Always “Like a Girl” or Coca-Cola “Share a Coke” are evidence of this.”
Kozloff says marketers and agencies must widen their arsenal of social media measurement tools. She adds: “An IAB study revealed nearly 3 in 10 marketers still don’t believe social media plays an important role in the marketing function while brands only use an average of 3.5 measures to gauge social campaigns’ performance – the top ones being engagement, traffic and click throughs.
FCB Inferno handles social media strategy for brands such as BMW UK and Microsoft UK, and its head of social Roman Gaponenko says success cannot always be measured by ROI. He argues that while social media is a key part of the marketing mix, marketers must ensure there is both balance and the correct measurement tools in place to ensure it results in true financial gains.
He concludes: “While lead generation from social ads may still feel like new territory, we are able to tell the cost and the amount of leads generated by our campaigns as we have a set up where everything is quantifiable.
“At the end of the day you may need to recognise that the ROI question may not apply to everything we do in the marketing discipline. But the cost of not doing social may be the cost of not doing business at all in 2016.”
Story first appeared on the Marketing Week website – https://www.marketingweek.com/2016/02/19/are-cmos-wise-to-place-so-much-impetus-on-social-media/