Social Marketing Measurement Crisis?

Social marketing spending is expected to rise dramatically, from the current 6% of total marketing spend, to over 9% by this time next year and tripling to 18% over the next five years, according to the Duke/AMA latest CMO survey. ( .

The poll of 3,778 top marketing executives reveals that the dramatic rise in spending is not being accompanied by a similar rise in the metrics to track performance, especially ROI. In the current world of Frugalnomics, influenced by CFOs and economic-focused decision makers, the lack of financially oriented ROI measurements could significantly slow, or even derail marketer’s aggressive social marketing investment plans.

From the survey results, the top 3 metrics, and the majority of tracking remains focused on tracking activity improvements, including increases in hits / visits / page views (45%), growth in repeat visits (30%) and increase in the number of followers / friends. Activity is not a bad tracking metric, especially to determine short term performance; however, as investments increase, understanding the longer term value and financial returns / ROI will be a requirement.

The financial measurement tracking needed to calculate ROI lagged considerably, with conversion rate improvements tallied by only 1 in 4, sales levels (9%) and revenue per customer (7%).

These financial metrics, along with additional metrics relating to cost savings, brand performance and risk management can assure frugal executives that the incremental investments are delivering more tangible results, and a positive ROI. A mix of short term and long term indicators, as well as tangible and intangible benefits, can help make the case for further social marketing campaigns and spending.

However, the survey indicates that the average respondent is only using 2 metrics on average, in my opinion, inadequate to prove current spending levels, much less the projected increases.

The survey was conducted with 3,778 top marketing executives at Fortune 100, Forbes Top 200 and CMO Club companies from January 11-28 by Duke University’s Fuqua School of Business and the American Marketing Association. The poll has been conducted twice annually since 2008.


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