The spirit of social media is enlivening industries, refreshing marketing, and humanizing businesses. While the steps to the social revolution are gradual, so are the budgets that fund innovation. Progress is underway however, and with every experiment and pilot program, we learn the answers to the questions that serve as the gateways to change.
Early experiments are sparked within various forward-looking divisions and funded by other resident or surrounding programs or departments. As social media permeates and socializes the frameworks of the modern businesses, finances and supporting resources will shift to advance expansion.
A recent study conducted by Duke University and the American Marketing Association documented the rise of hiring, budgets, and social media spend over next year.
According to the 2010 CMO Survey, on average, CMOs expect to increase marketing budgets by 5.9% citing social media as a crucial slice of the Internet marketing mix.
Business Growth Strategies
CMOs are optimistic about the future of the U.S. economy and many are focusing efforts on proactively increasing customers, purchases and improving their abilities to retain current customers.
Over the next year, growth strategies reflect a focus on market expansion and depth.
Market penetration (introducing current products and services to current markets): 44%
Product and service development (creating and introducing new products and services to current markets): 26%
Market development (adapting current products and services to new markets): 18%
Diversification (new products/services to new markets): 13%
Digital Marketing Leads the Way
With a 5.9% average increase in marketing budgets, Internet marketing is the beneficiary of overall budget with 12.2%; social and traditional CRM accounts for 9.9%; the introduction of new products checks in at 6.9%. Traditional advertising on the other hand is estimated to fall 2.5%.
B2B
In reviewing the results from the study, it appears that B2B products and services companies are mapping out among the largest expansions in marketing spend over the next year at 8 and 7.7% respectively. When comparing B2B to B2C products and services companies however, B2C trails 2.1% and 1.6% respectively.
Branding plays a pivotal role in B2B marketing over the next 12 months, increasing spending by 11.8% compared to only 4.3 across other sectors. The socialization and modernization of CRM is also pivotal to B2B growth, representing a 16.6% rise compared to 7.5% across all other sectors.
Social Media
Social Media offers tremendous growth potential and as such, budgets are multiplying. As reported in the research, social media budgets will spring from 5.6% to 9.9% this year. However, over the next five years, social media budgets will swell to 17.7% of the total marketing spend.
Comparing and Contrasting Social Media Spend: B2B an B2C
Continuing the trend in aggressive expansion, B2B companies plan the greatest increase in social media spending this year, jumping to 11% from 6.5% last year. B2C services trails, however social media spending continues to bloom from 2.9% to 6.9%. When we look at B2C product company forecasts for social media, we’re presented with a much different picture. Social media spending is expected to jump from 7.5% to 11.6% within the next year and upwards of 19% over the next five years. In comparison, B2B product and B2B services will scale to 15.3% and 18.9% respectively.
Visualizing Hybrid Theory
Recently, I discussed how social media was influencing not only the evolution of business, but also how the roles and skill sets of individuals within each socialized department would also develop in order to pave the roads to the future. I call this idea Hybrid Theory and it represents the fusion of best of breed expertise into varying social roles.
The study highlights how nearly one-half of companies expect to hire new media marketers over the six months and 61.4% and 77.5% will fill new marketing roles over the next year and two years respectively. Most notably, only 27% are expected to look at university graduates.
Experience counts for everything…
The most sought-after skill sets now and in the immediate future, include Internet marketing, innovation and growth, social CRM, and brand management. If we look at Hybrid Theory, those individuals who possess an understanding and a sliding scale of experience of all of the above can create their own destiny.
Executive-level marketers were asked to share their opinions on which brands currently set the standard for excellence. The results include Apple, Procter & Gamble, and The Coca-Cola Co. Honorable mentions were given to Google, General Electric, Nike, and McDonald’s. In social media, I would also add Starbucks, JetBlue, Dell, Virgin America, ebay, Cisco, among many others.
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B2B spending in social nearing B2C? Great to hear, as even as social goes more mainstream, B2B has long been the big question mark in the marketing play. Business decisions makers don’t use social to anywhere near the same extent as their non-BDM and consumer brethren, so the concern makes sense. Forrester has done some great analysis here, and actually just released 2011 marketing spend projections here: http://www.forrester.com/rb/Research/midyear_planning_predictions_for_2011/q/id/57575/t/2
Cheers.
“Experience counts for everything.” Brian, I'm liking your Hybrid Theory – and of course, the concept of creating your own destiny with the combination of these specific skills.
Interesting that B2C products ended up declining while the others increased. Anyone have ideas why that might have happened?
I am teaching Marketing /Marketing 2.0 at an MBA program. Students ask me about jobs after graduation. The survey says that larger will value experience much more highly than a university degree. It also says that there will be a big increase in marketing outsourcing.
I am wondering if the best path for new marketing graduates is to target the marketing outsourcers first as a way to build the experience before approaching the F1000 companies.
Any thoughts on this?
Roger, thank you for investing in the future of our students. I believe that outsourced service providers is indeed the best, fastest way to gain relevant experience across the board.
It is very interesting to see the growth of B2B in the social media space – for the past two years we have focused mainly on B2C products and services. Thanks for sharing this information.
It will be interesting to see how long this trend lasts. With the economy still in the dumps, companies are moving over marketing money from traditional programs – print and even Pay Per Click – to test out social media methods. Targeting (I believe you call it the fifth “P” in the marketing mix) and measurement are key.
This is a great article. Very seldom do I see articles with graphs and numbers. Visualization is extrememly important in social media, I like to see in order to believe.
Brian,
As the founding director of The CMO Survey, I am thrilled to see your analysis. It will be fascinating to see how these trends develop over time and how they will impact various industries and specific companies in different ways. I’ll be watching and offering more analysis on this topic on future administrations of The CMO Survey. The next version of the survey is in the field right now and new results will be available at http://www.cmosurvey.org on September 1.
Thank you so much Christine. It's a fascinating study. Please do let me know when it's available and we'll follow up the post with the new data. Keep up the great work!
thanks for sharing this information!
It is very helpful! Sorry for posting twice!