Econsultancy and bigmouthmedia’s new Social Media and Online PR Report 2010 has revealed that although investment is set to rise next year, businesses are failing to make the cultural and budgetary commitments required to maximise the channel’s potential.
The research reveals that some 73% of companies say they currently spend more resources on social media than they did last year, with the vast majority expressing confidence that budgets will increase again in 2011.
However with 76% of the companies surveyed admitting they didn’t have an ROI figure for most of the money invested in the channel and more than two thirds acknowledging a need to improve their social media techniques, it seems clear that business use of the medium is far from perfect.
“While the sector has matured over the course of the last 12 months, there is still massive room for improvement. Broadly speaking companies and their agencies remain self-critical about their social media tactics, with most acknowledging that they need to improve their approaches to the channel across the board,” said David Hardy, Group Marketing Director at bigmouthmedia.
Now in its second year, the Social Media and Online PR Report shows that despite some 83% of companies expecting social media spending to increase over the next year, the actual amount being spent remains very modest in real terms.
With more than 28% not spending anything on social media marketing and a further 33% claiming to invest less than £5,000 a year, many (29%) companies report not having in-house staff dedicated to this discipline.
For many of those surveyed, this lack of investment is damaging. Around half of responding companies (49%) say that lack of resources is a major barrier to success, and 30% say lack of budget is a significant issue.
Another issue which has become apparent this year is the difficulty many companies are having integrating activities relating to social media with other parts of their business including sales, PR, CRM, product & services development, human resources and customer services.
Despite the proven benefits of running integrated, cross platform campaigns, while the majority of responding companies are now co-ordinating social media activity with email marketing and search engine optimisation a mere 7% of companies integrate their social media channel with their television advertising.
“Clearly businesses need to take a long hard look at their existing corporate culture and think about how it can be evolved to incorporate the benefits of social media, but there are encouraging signs that this process is already underway. The report shows that with 41% of executive management now more interested in social media issues than other marketing issues it has captured leadership attention, and this will be a key factor in its continued commercial development,” added Hardy.
Econsultancy Research Director Linus Gregoriadis said: “2010 has been a year in which companies have tried to become more focused in their social media marketing activity. Much of their activity is concentrated on the use of Twitter and Facebook, with the vast majority of companies (83% and 80% of respondents respectively) using these sites as part of their social media strategy.
“Companies are harnessing these sites for a range of business functions including marketing, sales, customer service and product development.”
He added: “Newer areas such as location-based marketing and social gaming are now being hyped in the media, although the data shows that very few companies have so far actually become involved.”
Get more information about the report.