06 Jan 4 Ways Social Media Budgets will Move in 2010
As we move into a new year, we also are experiencing a shift in budgets towards social media, as well as how they are allocated in the social space. This is evident in Pepsi’s decision to choose social media over Super Bowl ads, but it is also evident in our experiences with our own clients who are putting more resources and budget to ongoing social efforts. In this post, I will acquaint you with some of the ways I think we’ll see social media budgets changing over the course of 2010.
(Note: Most of the data used in this post comes from MarketingSherpa’s “2010 Social Media Marketing Benchmark Report“, and from e-Marketer. These two sites are great resources to see what other marketers are doing in this space and what portions of budgets are being allocated to social media marketing.)
1. Retail and E-Commerce will step up to the plate
The chart below shows not only the dramatic increase in social media budgets across all the industries listed, but how each industry compares against each other. With one glance at this chart you can easily see that retail is stepping up to the plate this year with 79% of marketers in that category increasing social media marketing spend in 2009. This is important if you market within this industry, because it can mean that this year you will notice more competition within the space, and it could influence both the social efforts you choose to partake in and how successful you will be at breaking through the noise.
2. Facebook will take the cake
In 2010, social network budgets will begin to reflect the social network of choice: Facebook. As you can tell from the chart below, in 2009 MySpace received $490 million in advertising, but despite our efforts to help save the network from oblivion, it is predicted by E-Marketer to decrease by 21% over this next year. Facebook will surely take the cake with an increase of 39%, but with this growth it will be forced this year to develop services that will show brands new opportunities to further engage fans, as brands will shift from only measuring fan page counts to also caring about fan page engagement rates.
3. In-House Budgets will be beefed up
According to e-Marketer, “most social media marketing dollars (60%) next year will go toward staff salaries for activities such as blogging, content development and monitoring of social channels. Another two-fifths will be spent on outside help from agencies, consultancies, and service providers”. Should this shift concern social media agencies like us? In my opinion, no. For most of the clients we work with, we typically see internal budget increases happen when the company decides to get serious about a long-term investment in social media. For many, this means hiring social media managers that oversee, manage, and champion social media internally. These internal social media champions are crucial, because they not only challenge us to bring ideas to the table, but they bring insight and knowledge regarding company business objectives. In our opinion, this synergy leads to success.
This said, if you are allocating a budget for social media, don’t just allocate it all internally or allocate it all to a social media agency (although we wouldn’t complain), but consider hiring at least one in-house social media champion, and then an agency who not only can bring ideas that bubble up to the business objectives, but also implement the concepts. Because there are nuances within social media and many different skillsets required to implement successful social media campaigns, you will save time and budget hiring a social media agency.
4. Expectations will rise
Along with the rise of social media budgets, also come a rise in expectations from CMO’s to produce measurable ROI. An article by MarketingProf’s called “CMO’s Want Measureable Results from Social Media” noted, “Nearly three out of four CMOs (72%) who did not attach revenue assumptions to social media in 2009 say they will in 2010, according to the survey; in addition, 64% of CMOs say they plan to invest more in social media in the next year.”
As these expectations rise, how marketers begin to associate revenue with social media marketing will be important to look at. In our opinion, before budgets are allocated toward social media (or any marketing tactic for that matter), companies should conduct research around their sales funnel, and identify the key performance indicators associated with overall objectives. This is especially important for marketers who don’t have e-commerce functionality, and therefore need this data to make the connection between online activities and offline purchases.
This research should help figure out important questions like:
- Does your product require education before purchase?
- Does the general public know that your product (or the category of your product) even exists?
- Do they use search engines to find answers? If so, how?
- How have your current consumers been persuaded to try your products?
- Does an increase in site traffic typically lead to an increase in sales?
This just barely scratches the surface of the very important question, “How will I know I’m successful?”, that often comes from CMO’s after budgets are allocated. With this in mind, we will be covering this in more detail in the months to come, so stay tuned.
Do you have any predictions to add to this list? If you are a marketer, how are you changing your social media budget allocations in 2010?
