ImpactWatch Blog

A follow-up study from Duke University’s Fuqua School of Business and the American Marketing Association (AMA) shows that current and projected social media marketing budgets have increased in the past six months.

Marketers expect to allocate nearly one-fifth of their total marketing budgets to social media in the next five years. The projection shows a five percent increase from just six months ago. These numbers  may continue in their climb as marketers become more aware of the opportunities afforded by social media and as they gain more experience in running successful campaigns.

MarketingSherpa asked more than 2,000 marketers what metrics they use to monitor and measure impact, and here’s what the study found:

The executive summary of their 2010 Social Media Marketing Benchmark Report is available in PDF format. Hopefully it explains why less than half of marketers are measuring the lead generation of their social media programs…

Using the list of the New York Times’ most emailed articles, University of Pennsylvania researchers have boiled down the characteristics that make news articles go viral.

You can read all about their methods, results and other science-y stuff in this PDF.

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Their findings:

* Shock and awe – Stories with a surprise or twist were popular, but awe-inspiring pieces were sure to be sent around. Researchers found that articles which made the reader appreciate the vastness or complexity of the world were by far the most shared.

* Practical makes perfect – Financial, medical and domestic stories were also popular choices to share via email. People love to send information that is useful to their friends and family. Product reviews, tips and advice, local openings and events – readers shared information that made a difference in their everyday lives.

* Mixed feelings – Articles with a positive tone were popular choices to share…but so were articles that revealed a threat or inspired fear. People love cats rescued from trees, but also want to know if there’s a burglar in the neighborhood.

* Longer and smarter – Longer articles were more popular than quickies, but this may be related to readers’ preference for in-depth coverage. Researchers were surprised at the popularity of science articles, even those with heavily technical content.

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What it means to you:

Your audience is made up of human beings. They want to learn. They want to feel things. They want to share experiences.

It’s common for businesses, especially the older and more established, to keep a distance between the inner workings of the company and their clients. There are lots of reasons for this – they think the details are boring, they want to protect proprietary info, they’re focused on doing “real work.”

Well, as Apple can tell you, there are true benefits to connecting with your audience. In addition to increasing visibility, it’s an opportunity to improve customer loyalty and – by using the tactics above – having those loyal customers share your information with others.

You don’t have to give away the secret sauce, but share some of what is going on with your business. Close a big deal recently? They will be happy for you. Have a setback or a hard decision to make? They will be sympathetic. Share tips on using your products or an in-depth explanation of a new technology.

And don’t be limited to what you’ve done so far. Want to inspire a little awe of your own? Tell customers how you envision the future of your industry or tackle a controversial topic that affects your business. If you share real information and opinions on your business, your readers will share them too.

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Over 1,450 marketers representing brands, agencies, consultants and non-profits participated in the 2009 Marketing Industry Trends Study. The survey was developed by crowdsourcing input directly from the online marketing community.

Is your company currently using or planning to use social media? If planning, how long before implementation?

- 59% of marketers say social media is currently part of their activities.
- 28% are planning to implement social media in the future.
- 13% have no plans to engage in social media marketing.

What are the greatest barriers to social media use in your company?*

- 34% We don’t know enough about social media to begin
- 32% There’s no established way to measure the effectiveness of social media
- 25% There’s no funding in our budget for social media
- 25% Social media is not a proven/tested strategy
- 21% No time to invest in starting a social media program right now
- 20% I don’t feel there are any barriers
- 12% Legal constraints/company policy
- 9% Social media is not considered a good use of employee time

How are you measuring the effectiveness of your social media efforts?
- 63% Tracking website hits
- 43% Tracking links on sites
- 42% Monitoring qualitative feedback/sentiment from those involved with the program
- 39% Tracking mentions on sites
- 39% Tracking sales/new business leads
- 30% Measuring buzz
- 27% Using a third party tracking service or research supplier
- 8% Other
- 13% Not measuring it

Types of Social Media Used

- 82% Facebook
- 73% Twitter
- 65% Blogs
- 62% Online videos
- 31% Podcasts
- 32% Webcasts
- 30% MySpace
- 28% User forums
- 28% Widgets
- 22% Wikis
- 23% Other

Other key findings include:

- Online, Search and Social Media as a group accounts for about a third of current marketing spend. This increases to over 40% for smaller companies.
- 60% of brand marketers forecast an increase in social media spending in 2010.
- Facebook, Twitter, online video and blogs are the 4 most popular social media tools. On average, marketers are using 5 to 7 other social media tools at the same time.

Download a copy of the 2009 Marketing Industry Trends Study.

*Numbers are an average of the brand and agency numbers reported. For the exact breakdown, please see the full report.

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Lenskold Group and MarketSphere’s “2009 Marketing ROI & Measurements Study” surveyed 601 marketing professionals on the influence of the economy, marketing operations, marketing practices, and individual firm’s marketing strengths on overall marketing performance and growth.

The study found that “companies with marketing operations, analytics, and ROI metrics in place are generally showing up as having highly effective and efficient marketing and more likely to be outgrowing their competitors.”

Growing Demand for ROI

• 65% said that CEOs and CFOs are more frequently demanding ROI as a part of securing budgets for marketing initiatives.
• 79% felt an increased need to measure, analyze and report marketing effectiveness in 2009 compared to previous years.

Measurement Necessary for Growth

The study showed that one of the most marked differences between high and low growth firms is the financial and resource support provided by executive teams to “improve our marketing ROI measurement and management capabilities” (50% greater growth companies vs. 33% slower growth companies ). High growth companies also reported strengths in measurement areas such as “understanding profit drivers to prioritize current budgets” (47% vs. 27%), “using customer analytics to improve marketing effectiveness” (41% vs. 22%), and “using good measurements of marketing effectiveness to prioritize top marketing campaigns” (41% vs. 24%).

Budget Constraining Measurement

Despite the importance of a strong measurement and analysis program, most firms lack financial support for these initiatives.

• 59% felt the need to measure ROI was greater than ever but were not budgeted for the necessary effort.
• Only 20% said the need to report marketing effectiveness was higher and their budget was adequate.
• 2% of marketers dedicated at least 30% of their budgets to measurement and analysis.
• 31% have 0% budget allocation for measurement.
• Half (54%) of respondents had between 1-10% of the marketing budget set aside for measurement.

Marketing ROI Adoption Remains Flat

Companies calculate marketing profitability, ROI, or a similar financial measure to assess marketing
Effectiveness remained steady at 24%. ROI adoption was considerably higher for firms reporting highly effective and efficient marketing (54% vs. 23% of all other firms) and for companies outgrowing their competitors (30% vs. 20% for slower growth companies).

Additionally, twice as many firms (51%) are estimating ROI in planning compared to calculating ROI as an assessment of effectiveness. The practice of ROI estimation was employed by 81% of firms claiming to have highly effective and efficient marketing, compared to 48% of other firms.

Recommendations for Measuring ROI

• Estimate ROI potential in the planning stage.
• Invest in measurements and analytics with immediate payback.
• Increase experimentation and testing.
• Prepare for aggressive competition during the recovery.
• Pursue efficiency and effectiveness.

Follow Hannah on Twitter. (disclosure: not technically a recommended step for measuring marketing ROI)