The increase is in addition to social media spending, which already accounts for more than 10 percent of most total marketing budgets. In five years, this same spending will eventually account for about 25 percent of most total marketing budgets. And none of this news should surprise anyone at all, especially with the increased attention that marketers are giving to the growth of online video.
Digital marketing and social media are mainstream even if measurement remains somehow elusive to marketers.
What should surprise people instead is that marketers readily admit that they don't really know how to measure the outcome of their efforts. In fact, only 15 percent of CMOs say they have successfully proven a quantitative impact associated with their social media efforts. Conversely, 41.5 percent of marketers haven't been able to show any impact from their social media efforts. The mind boggles.
This apparently nagging inability to measure outcomes is a symptom and not the problem. The problem is how many organizations lack a marketing or communication plan and, even more commonly, how many lack good marketing or communication plans. If they did have good plans, measurement wouldn't be a problem as the key has always been to set realistic and measurable goals.
It's almost impossible to measure outcomes that aren't tethered to objectives.
Likewise, it's almost impossible to not be able to measure outcomes if they are tethered to realistic, measurable, and specific objectives. And ideally, those objectives will be drawn from the organization's mission, vision, and strategic plan.
Why is this important? Because specific business goals — along with considerations like product or service life cycle, market share, consumer base, competition, proximity, resources and self-imposed restraints — lead to very specific marketing and communication goals. Consider just a few of them:
• Introduce new products or services. While awareness is worthwhile, introducing new products and services means more than people knowing something exists. Communication objectives can be grounded in outcomes like market position, brand recognition, and value proposition retention.
• Capture market share. Given market share is a key indicator of competitiveness among competitors and market viability. Subway, for example, focused on market share when it stopped defining its market as sandwich shops and started attacking the quick service market.
• Become an industry leader. Most companies that strive to be industry leaders market the influence of the leaders and knowledge of their industry more than they do their products or services. Becoming a trusted source increases credibility and results in significant market advantage.
• Improve customer loyalty. Organizations that want to increase customer loyalty invest in marketing that reinforces individual relationships, personalization, and the best possible customer experience. Some include incentives, but only those that reinforce positive customer experience.
• Increase product profitability. Sometimes reining in a marketing plan, pushing loss leaders, or reducing non-productive expenses can mean more to a company than expansion. The same objective can also include add-on items that require no additional marketing and well-timed follow-up sales.
• Increase gross sales or revenue. Increasing sales (units sold) and revenue (money made) can sometimes be likened to a throwaway objective in that sales and revenues are often the natural outcome of every objective listed. So if you include this objective, make it specific — X percent of increase in the marketing budget will generate X percent increase in sales within three or six months.
• Become a good corporate citizen. Responsible corporate citizens that support the communities in which they operate often benefit from increased visibility, credibility, and opportunity. Outreach programs can be especially effective when they lift up communities, creating the most potential customers.
• Foster a strong corporate culture. Whether the objectives is tied to acquiring top talent or is more market oriented in better meeting the needs of the customer, a strong corporate culture pays dividends by positioning the company from its people out. Allocating more to internal communication can help.
• Nurture ideas and innovation. When companies make this their objective, marketing enjoys a pretty clear directive that their content and creative ought to aspire toward the same goals. Apple used to be the best example in marketing innovation but not so much nowadays.
• Increase store or website traffic. If this is the objective, it almost always has to be tied to some residual effect such as lead generation, conversation, or community building. The challenge with the concept is to keep it relevant so the traffic counts don't lose customers for life in the process.
• Shape public opinion. If we remember that the primary objective of any marketing and communication program is to change behavior or public opinion, then it stands to reason our objectives ought to define what change we anticipate. Once launched, measure the change.
Naturally, these objectives (most of which would need to be fine tuned and more specific to work) only scratch the surface. There are dozens and hundreds of organization-specific objectives that could be taken into consideration, including proximity, community culture, competition, etc. (For example, a marketing plan for an Asian restaurant in China Town would look very different from a plan in a suburb without one or a farm town without many dining options.)
In fact, these variables (and marketing's unwillingness to accept they exist) are the primary cause for confusion. Too many marketers are looking for some holy grail of marketing plan and outcome measurement that somehow manages to cast the whole of marketing (and each of its tactics) into a plug and play template. But outside of making a few marketing consultants rich on 10-step books in the short term and shifting marketing budgets to social, they work for relatively few organizations.
So before your organization jumps on social, mobile, and analytics wagon, make sure any budget increases are tied to strategic objectives that can be readily measured. Who knows? You might discover a different communication vehicle for your company, one your competitors would never consider.