Companies will spend more than ever on social media marketing in 2011, but some businesses are boosting budgets for entirely the wrong reasons.

In my new report “Social Media in the Marketing Mix: Budgeting for 2011,” I demonstrate that companies are planning budget increases next year, as they move from cautious experimentation to full implementation.

That sounds great, and shows that social media is winning over skeptical marketing executives. But many companies are expanding budgets for social media marketing not because they have been successful at it, but because they are relying on gut instinct—the feeling that “this is something important so I’m going to do it even if I don’t know why.” Or worse, they have watched their competitors earn accolades in the press for their work in social media, and they are afraid of losing any more ground.

These are exactly the wrong reasons to increase spending on social media. A few years ago, you could run a few tests and gain some valuable learning without spending much. You could go on your gut and hope for the best. Or you could let your competition make all the mistakes, and learn from them.

But things have changed. Social media sites have matured, and you can’t do much for free anymore. A Promoted Trend ad on Twitter can cost $100,000 per day. Top social media agencies are in demand, and they charge premiums for their work. Social media is too expensive—both in actual dollars and in the cost to your company if you do it wrong—for businesses to spend for the wrong reasons.

Now, more than ever, marketers need a clear plan and strategy for social media.


Focus on integration. Integrating social media with other corporate activities is a key challenge for marketers, but incorporating it is the only way to be successful, long term. While respondents to a September 2010 Econsultancy survey were likely to have at least some unity between social media and marketing or PR, that was not the case for other core business functions such as customer service, sales, CRM or product development.

Instead of adding social media, start with it. I’m not saying every marketing effort needs to have a social component, or that social needs to be at the forefront. But it must be assessed at the earliest planning stages, rather than tacked on at the end.

General Motors is transitioning social media management into its automobile brand teams, giving them budget and planning responsibility. That way, “you don’t all of a sudden have someone going off and doing something that doesn’t jibe with marketing, or where the brand wanted to go on something, ” GM’s social media chief, Christopher Barger, told me when I was researching the report. “You don’t have the marketers going off and doing a social activation that they think makes sense but in the end doesn’t really.”

Even if you don’t think you can measure ROI, at least try. The ROI question is a critical issue to resolve and I expect much solid work will be done in 2011. But in the meantime, there’s no excuse for not even trying to measure results.

A survey by Harvard Business Review and SAS found that even among companies that considered themselves effective users of social media, 31% were not even using any analytic tools to help guide their work.

Businesses can be forgiven for not fully understanding the impact of their social media marketing programs. Analytics tools still need a lot of work. But not using analytics at all—that’s inexcusable.

The bottom line: The expected growth in social media marketing spending next year is a positive thing—a sign that it has earned a place at the marketing dinner table. While there are still many challenges to using it effectively, increasing budgets without a solid strategy is a sure way to fail.

SOURCE eMarketer

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