eMarketer Social Media in the Marketing Mix-Budgeting for 2011

  • Published on
    04-Apr-2015

  • View
    399

  • Download
    1

Embed Size (px)

Transcript

December 2010

Social Media in the Marketing Mix:Debra Aho Williamson dwilliamson@emarketer.comReport Contributor Tracy Tang

Budgeting for 2011

Executive Summary: In 2011, four out of ve US businesses with 100 or more employees will use social media marketing. Thats a dramatic change from 2008 when just 42% of companies marketed via social media. As consumer usage of social media continues to increase in the US and around the world, marketers have transitioned from cautious engagement to full deployment.121699

US Companies Using Social Media Tools for Marketing Purposes, 2008-2012 % of total88% 80% 73% 58% 42%

Social media spending is also increasing, as marketers move beyond experimenting to include it in all their marketing planning. The companies leading the way with social media are giving it a place at the table next toand sometimes in place oftraditional media such as TV and print. These marketers are also integrating social media initiatives and budgets into brand marketing, customer relationship management and communications. Although spending is rising, the ROI challenge remains and is a heightened concern for 2011. After a few years in the spotlight, social media needs to prove it can help increase sales. Otherwise, spending increases may be curtailed. Key Questions

2008

2009

2010

2011

2012

What percentage of companies use social media for marketing? How are marketers budgeting for social media?

Note: includes companies with 100+ employees Source: eMarketer, Nov 1, 2010121699 www.eMarketer.com

Are social media marketing budgets growing? What are the obstacles to future spending growth? How are General Motors, Intel and PepsiCo budgeting for social media in 2011?

For additional information on this chart, see the Endnotes section.

Digital Intelligence

Copyright 2010 eMarketer, Inc. All rights reserved.

The eMarketer ViewSocial media is no longer an add-on for marketers; its been integrated into everything they do. Marketers that have spent the past few years ramping up their internal social media marketing infrastructureand their presence on sites such as Facebook and Twitterwill take social media to new heights in 2011. And as they do, they will evolve the way they market across all media, not just online.Usage of social media marketing tools will continue to grow. eMarketer forecasts that in 2011, 80% of companies with 100 or more employees will use social media tools for marketing, up from 73% in 2010 and nearly double the usage rate in 2008. Social media will spread in many directions. Social media is becoming part of marketing efforts not only on the web but also in mobile, print and TV. For example, Ford Motor Co. devoted a quarter of its total ad budget to online media in 2010, and the automaker is making social media a centerpiece in many of its marketing campaigns. It decided not to advertise in the 2011 Super Bowl, instead putting the funds toward additional social media marketing. Social media will challenge other channels for budgetand win. Given the lingering effects of the recession, most marketers are not raising marketing spending signicantly in 2011, if at all. This means that social media dollars are not coming from new marketing funds but from money that was previously allocated to other channels. All the consumer packaged goods (CPG) companies surveyed by the Grocery Manufacturers Association in 2010 said they would increase social media spending over the next three years, and none said they would decrease it. However, a signicant percentage thought their allocations for traditional paid media and promotions would decline. Some industries still lag behind. While many consumer marketers and business marketers are already deeply engaged, heavy industrial rms and small businesses will remain on a slower adoption pace. Some business-to-business (B2B) industries have a longer sales cycle or a product type that makes social media a less natural t. And many small businesses do not have a web presence, let alone a budget for social media.

Although spending will increase, creating a budget line for social media will be a challenge. Surveys indicate that marketers spend 4% to 11% of their online marketing budgets on social media. This wide divergence is indicative of how social media marketing budgets are spread across multiple departments and groups, and that some types of companies and industries are more advanced than others. Although businesses might strive to set aside a predetermined percentage of marketing funds for social media, establishing a centralized social media marketing budget may not be a realistic long-term goal. Having a social media department may not be enough. Leading-edge companies will not be content to manage social media via a single department. Instead, they will look to spread such initiatives across marketing, communications, customer relations and sales groups. GM, for example, is working on ways to move social strategy into the individual automobile brand groups.

The brands are now baking social into their overall marketing budget. So, if youre launching a vehicle, you just increase the amount of money that goes into the vehicle launch program in order to accommodate social tactics. Christopher Barger, global directorof social media at General Motors, in an interview with eMarketer, October 2010These changes will bring acute growing pains. In the early days of social media, various corporate departments battled to control budget and execution, leading to turf wars and misaligned marketing efforts. While the concept of a centralized social media department has solved some of those issues, it has not rectied all of them. The fundamental idea of social media is that it is about communication and engagement, both of which affect all business functions and departments. Measuring ROI will be more critical than ever. Although the need for ROI is not new, it will reach its strongest point to date in 2011. Some companies are expanding budgets for social media marketing based on gut feelings or to keep up with competitorsnot because they have been successful. The true measure of results will be the effect on sales, not the number of likes, passalongs or retweets.

Social Media in the Marketing Mix

2

What Percentage of Marketers Use Social Media?It is well known that social media marketing has exploded over the past few years. But even as recently as 2009, it was still considered an experiment by many marketers, something they threw a few extra dollars toward when they wanted to add a conversational twist to their marketing.That is all changing. More businesses than ever are using social media tools to market to their customers. eMarketer projects that four out of ve US companies with 100 or more employees will use social media tools for marketing in 2011. By 2012, eMarketer expects that 88% will adopt one or more forms of social media for marketing (including online communities, brand pages, blogging, social games, ratings and reviews and more).US Companies Using Social Media Tools for Marketing Purposes, 2008-2012 % of total88% 80% 73% 58% 42%

At the high end, 86% of B2B marketers and 82% of consumer marketers surveyed by digital marketing agency White Horse said they had some level of activity in social media. However, 45% of the B2B marketers and 26% of the business-to-consumer (B2C) marketers indicated they had only a basic social media presence.Comparative Estimates: US Companies Using Social Media Tools for Marketing Purposes, 2008-2012 % of total2008 White Horse, May 2010* White Horse, May 2010** Digital Brand Expressions, June 2010 Panda Security, Sep 2010 Alterian, Aug 2010 eMarketer, Nov 2010 King Fish Media, HubSpot and Junta42, Aug 2010 PRWeek and MS&L Group, Sep 2010 Pivot Conference, Aug 2010 Chief Marketer, April 2010 University of Massachusetts Dartmouth Center for Marketing Research, Nov 2009 eROI and eMarketing + Commerce (eM+C), Feb 2010 Equation Research, Aug 2009 Unica, March 2010 2009 2010 86.0% 82.0% 78.0% 77.5% 74.8% 72.0% 2011 2012 -

42.0% 58.0% 73.0% 80.0% 88.0%

63.0% 71.0% 63.0% 34.3% 58.3%

77.0% 91.0%

-

69.0% 59.0% 58.0%

-

-

-

Note: *B2B marketers; **B2C marketers Source: eMarketer, Nov 2010; various, as noted, 2009 & 2010121700121700

www.eMarketer.com

For additional information on this chart, see the Endnotes section.

The increase in usage of social media marketing stems from several trends: Rising consumer social media usage. Worldwide, 61% of frequent internet users have a social network prole, up from 45% in 2008, UM (formerly Universal McCann) reported. TNS reported that in September 2010 internet users worldwide spent more time per week with social media than with emailan average of 4.6 hours vs. 4.4 for email. Facebooks mass audience. It has more than 500 million active users worldwide. In the US it reached 148.4 million unique visitors in September 2010, according to comScore making it the fourth-largest web property in the US. Promotional repower. The main reason consumers engage with brands in social environments is that they hope to get special discounts, coupons or offers. When McDonalds announced the short-term return of its cult favorite McRib sandwich in November 2010, it generated twice the number of positive posts as negative ones on Twitter and Facebook, according to an analysis by Crimson Hexagon. An ad campaign on Twitter generated even more discussion.

2008

2009

2010

2011

2012

Note: includes companies with 100+ employees Source: eMarketer, Nov 1, 2010121699121699

www.eMarketer.com

For additional information on this chart, see the Endnotes section.

eMarketer analyzed results from a dozen third-party surveys as background to develop its social media usage forecast. At the low end, 58% of marketers surveyed by Chief Marketer magazine in April 2010 said they used offsite social media such as Facebook or LinkedIn. That question wording may have skewed the responses lower, since a certain percentage of marketers have social features on their own websites.

Social Media in the Marketing Mix

3

As cautious marketers have joined the early adopters, the percentage of companies using social media for marketing is still climbing. Chief Marketers survey showed a 24-percentage-point increase in usage of social media venues such as Facebook or LinkedIn, from 34.3% in 2009 to 58.3% in 2010. Meanwhile a survey by PRWeek and MS&L Group, conducted among chief marketing ofcers, VPs of marketing and marketing directors, found an 8-percentage-point increase between 2009 and 2010, from 63% to 71%.

On the other end of the scale, education and communications industry rms were highly likely to already use social media. The percentage of those types of rms that were not planning to use it was in the single digits.Social Media Use by Companies Worldwide, by Industry, July 2010 % of respondentsEducation 72% Communications 71% Services 66% Retail/wholesale 64% Financial services 50% Health/life sciences 48% Manufacturing 45% Government 44% Energy/utilities 32% Currently using 25% Planning to use 24% 27% 41% Not currently using, no plans to use 19% 32% 24% 26% 25% 22% 21% 12% 21% 11% 16% 9% 17% 6%

Were seeing social move from an experimental or campaign-based approach to something more ongoing. A year or two ago, someone would have an extra $100,000 they would want to put toward extending a promotion on Facebook. Now, many marketers have set up internal departments for social. Brands are realizing it takes an ongoing investment to create an ongoing dialogue with their customers.Kevin Barenblat, CEO of Context Optional, in an interview with eMarketer, October 2010Not every industry is adopting social media at the same rate. In a worldwide survey by SAS and Harvard Business Review, the companies that were least likely to be using social media were in the energy-utility, government and manufacturing industries.

Note: numbers may not add up to 100% due to rounding Source: SAS and Harvard Business Review, "The New Conversation: Taking Social Media from Talk to Action," Oct 27, 2010121441121441

www.eMarketer.com

Small businesses are also slower to adopt social media, in part because many of them lack a strong web presence to begin with. American Express OPEN found in September 2010 that 61% of small-business owners did not use social media to market their business. Another way to look at the relative importance of social media is to compare its usage to other types of online marketing.Among online marketers, social media usage is approaching that of email marketing.

Social Media in the Marketing Mix

4

Lyris, a provider of email software, found in a June 2010 survey that 97% of respondents used email marketing and 82% used social media marketing. In this survey, more marketers used social media than used search marketing, a telling statistic.Marketing Tactics Used by US Online Marketers, June 2010 % of respondentsEmail marketing Company website Social media marketing SEO Search engine marketing (SEM) Direct mail marketing Banner/other online ads Events/trade shows Webinars 22% 37% Emailing to mobile devices/SMS 59% 65% 65% 72% 82% 79% 97% 96%

What Are Marketers Budgeting for Social Media?As companies take a more serious approach to planning and executing social media marketing initiatives, spending is rising.A worldwide survey of marketers by Maxymiser, a provider of website personalization tools, found that social media ranked third among areas marketers planned to focus their online marketing budget in 2011, after search and their own website. (Social media was tied as a priority with converting trafc.) The takeaway is that social media is top of mind not only when it comes to usage but also spending.Focus of Online Marketing Budget in 2011 % of senior-level marketers worldwideSearch/keywords Website creation/optimization Converting trafc Social media Website personalization/targeting Online video Mobile Banner ads 14.5% Rich media 12.3% 9.7% 8.4% Podcasts/webcasts No budget 22.9% 22.5% Behavioral advertising 27.3% 51.1% 47.6% 38.3% 38.3% 34.8%

Note: n=847 Source: Lyris, Inc. survey, provided to eMarketer, Sep 1, 2010119911119911

www.eMarketer.com

Chief Marketer magazine also found that social media has moved ahead of search as a marketing tactic. Marketers were more likely to use email, but 58.3% marketed via Facebook, LinkedIn or another social media outlet. Just under half (49.7%) engaged in search engine optimization. Twitter was used by 39.3% of respondents.Interactive Marketing Tactics Used by US Marketers, March 2010 % of respondentsEmail marketing 74.7% Email newsletters 69.5% Offsite social media (e.g., Facebook, LinkedIn) 58.3% SEO 49.7% Display ads on Websites 44.9% Twitter updates 39.3% Paid search ads 31.3% Corporate blog(s) 30.9% Webinars 27.7% Viral or word-of-mouth campaigns...