Are Businesses Drinking the Social Media Kool-Aid?

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E-mail marketing firm Exact Target, in conjunction with Econsultancy, has released results of a report on digital marketing budgets that shines some light on what businesses are planning to do this year - and not do. What's very interesting (and alarming) is that many companies have decided to spend their budgets on some marketing channels somewhat blindly.

The survey included data from more than 1,000 respondents in December 2009 and January 2010. Of those, 648 are client-side organizations, and 385 are agency/supplier-side, both from the US (45 percent) and the UK (33 percent).

When asked about their planned marketing spend on social media for 2010, 70 percent of respondents said they would increase spend on off-site social media (Facebook, Twitter, etc.) while 64 percent said they would increase spend on on-site social media (blogs, or ratings and reviews). Also, 56 percent say they will increase spend on mobile marketing. At the same time, just 54 percent said they would increase spend on e-mail marketing.

But when asked about measurable ROI for these channels, respondents appear to be rolling the dice. In terms of ability to measure, just 19 percent of respondents say that measurability is "good" for on-site social media and 17 percent for off-site. As far as mobile marketing, just 17 percent say that measurable ROI is "good." That's in stark contrast to e-mail marketing, where more than 50 percent say measurability is "good."

It would appear that measurable ROI is much higher for a proven channel like e-mail and significantly less than social media or mobile. Either these businesses are measuring social media and mobile through unseen means, or they're drinking the social media Kool-Aid.

Does this fall in line with your marketing budgets for 2010? Please leave a comment below and tell us if you're on the bandwagon, or sticking with what's worked in the past?

And don't miss Website Magazine's upcoming April 2010 issue, where we address concrete strategies for e-mail marketing.


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BrianP 02-05-2010 4:35 PM

I think that the key is that the effort has to be combined with their existing strategies to create a consistent message and build value.

DavidH 02-06-2010 9:38 AM

I find this very interesting. With businesses going down every day, I wonder how much social media marketing they are performing.

Dave Hale

BobB 02-06-2010 11:23 AM

I believe that quantitative marketing (email, radio, newspapers etc.) should be a certain percentage.  However, it is a marketers personal preference how much to 'wager' on Social networks.  I gamble about 10% of my ad revenue on Social networking and ads.  I have had marginal results and it is difficult to predict if 50% of my ad busget would be better. One major business rule is to diversify your ad dollars anyhow.  I'm not willing to take that gamble just yet, of adding more money to advertise online, backlink etc.  I AM seeking a way to quantify (or even justify) the amount I will spend on internet advertising other than my website.  Keep in mind, my website IS my store, I have no brick and mortar location.  Word of mouth and hitting the streets is the name of my game....

JohnH 02-06-2010 3:44 PM

Social Media when used at correct times can help develop interest in a product or service. Used in conjunction with a link to your static website and not vice versa can  help increase your traffic. However be careful in the use of reference to these sites as it is possible that search engines will place them before your static site. This canl make your SEO an even more daunting task.

MasterLinker 02-08-2010 2:11 PM

In looking at the charts, it surprised me that tracking ROI for SEO (organic ranking) efforts was ranked so high. While ROI for SEO is higher by default, actually tracking ROI for SEO can be very difficult.

I agree that Social Media is the hot topic right now, but I think the Kool-Aid has been spiked.  Social Media works very well for some products and services, but overall I think its usefulness in building traffic and generating sales is highly-inflated by the media.

Monty Fuller 02-02-2012 8:52 PM

I think there are clear signs that a business should seek to have a presence online, be it the traditional website or on social media. In my opinion, it is best if both approaches are used hand in hand.

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