High Awareness of Social Media; Low Spending So Far
More than three-quarters of U.S. marketing professionals surveyed think that social media marketing (Web 2.0) can give them a competitive edge, according to Coremetrics. But that doesn’t mean spending has yet shifted in that direction. The same respondents said that only 7.75 percent of their online marketing spending went to such tactics.
That, in a nutshell, is why so many observers think online marketing and advertising spend will continue shifting to various Web and Internet mechanisms. Basically, the argument is that end user attention has shifted to online venues but advertising spend doesn’t fully reflect the magnitude of the shift.
And that is one reason Google remains so aggressive about prospects for the mobile Web, and mobile advertising, for example. Not only has user time and attention shifted to Web formats, but that change will only accelerate as easy-to-use mobile Web experiences and features are more widely available and appreciated.
Strategy Analytics, for example, projects that by 2011, about three quarters of mobile ad spending will go to Web and search providers. That expectation is fueled by reflection on recent history.
Ad spending on the Web is growing at a compound annual rate of 18.3 percent and will reach $73 billion in 2011, according to PriceWaterhouseCoopers. The consultancy says Internet advertising will comprise 14 percent of the entire global advertising market by that year.
If mobile advertising follows that spending curve; if mobile attention is matched by mobile advertising spend, Strategy Analytics forecasts that advertisers will have spent $1.4 billion on mobile media this year, with that rising to $14.4 billion in 2011.
Likewise, eMarketer says mobile ad spending reached $1.5 billion in 2006 and will grow to $14 by 2011.
Sprint Nextel, Verizon Wireless and Vodafone are a few of the major wireless carriers rolling out more-aggressive mobile advertising programs of their own.
Google CEO Eric Schmidt has argued that mobile ad revenue is so interesting because it is “twice as profitable or more than the non-mobile phone ads because they’re more personal.”
In fact, mobile advertising is more attractive because revenue earned by download-based subscription services seems to be slowing. M:Metrics says the number of downloads over wireless networks in the United States rose slowly from 38.7 million in January 2007 to 40.8 million in May 2007 and has been on only a slight uphill trend for the rest of 2007.
“Marketers are aware of the impact that social media marketing can have on their overall program but view it as uncharted territory, not worthy of their budget,” says John Squire, Coremetrics SVP.
But things are shifting that way. The study found that the use of Web 2.0 or social media marketing tools, including user generated content, including reviews, Real Simple Syndication feeds, podcasts and wikis are becoming more important parts of a complete online marketing program.
About 33 percent of spending now goes to online advertising and 28 percent to online promotion of other sorts, Cometrics reports.
Some 58 percent of respondents have implemented user-generated content or reviews in the past year. About 31 percent of respondents have implemented a blog.
About a quarter of respondents have implemented an RSS feed in the past year.
The findings showed that most marketers have concrete plans to implement a social media marketing program at some point, even if not within the next twelve months.
In fact, 50 percent of respondents plan to implement user-generated content or reviews.
About 22 percent of respondents plan to implement a blog; while 20 percent intend to implement social networks. Another 20 percent plan to implement an RSS feed.
Search engine optimization was ranked as the number one priority over nine other choices, including email campaigns and online analytics, but ranked only fourth in terms of both time and budget allocation.
Email campaigns continue to demand most of a marketer’s time (22 percent on average), while the biggest portion of budgets (33 percent on average) go to online advertising.
The survey of 116 senior marketing professionals was conducted during the third quarter of 2007. Coremetrics asked marketers which social marketing tools and activities they were using or intended to use, and how much of their time and budget is spent on social media as opposed to traditional marketing activities. IP
