Though 2009 may have been a trial run for many companies using social media, CMOs expect social initiatives to have a direct impact on their bottom lines in 2010, according to a study from Bazaarvoice and the CMO Club.
Nearly three out of four CMOs (72%) who did not attach revenue assumptions to social media in 2009 say they will in 2010, according to the survey; in addition, 64% of CMOs say they plan to invest more in social media in the next year.
Below, additional findings from the study.
Business Impact of Social Media
The exact impact of social media tactics on business goals still remains elusive for CMOs:
- 53% of respondents are unsure about their return on Twitter.
- 50% are unsure about the direct value of LinkedIn.
- 50% are not sure how to measure the impact of industry blogs on business metrics.
Customer ratings and reviews are the best-understood marketing activity from an ROI perspective: Although the financial impact of social media is unclear to many CMOs, most have confidence in using customer insights gleaned from social sites.
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In 2009, 80% of companies have used customer stories and product suggestions to shape a brand’s products or services. In 2010, almost all CMOs will look to a broader range of user-generated content sources to inform these types of decisions, according to the study, which projects as follows:
- A 400% increase in use of Twitter comments to inform decisions about products and services
- A 59% increase in use of customer reviews and ratings
- A 24% increase in use of social media for pre-sales Q&A
2010 Revenue Forecasts
Most CMOs say social media will have an impact on revenue in 2010: 80% say up to a 5% impact, and 15% say a 5-10% impact. Most companies (81%) plan to link annual revenues to their social media investment in 2010.
Of those companies that did tie social media investment to 2009 revenues:
- Companies with 5% or less revenue tied to social media in 2009 foresee that the link between revenue and social media will increase 5% or more in 2010.
- Those with 6-10% of revenue tied to social media in 2009 project that the link will increase more than 10%.
- Those with higher than 6% of their revenue linked to social media in 2009 foresee that the link will increase more than 20% in 2010.
Measuring Social Media in 2010
In 2009, 89% of CMOs tracked social media's impact by using standard metrics such as site traffic, pageviews, and number of fans. However, CMOs expect that in 2010 top metrics will track more closely to P&L business goals––not just Web-related goals. The study forecasts the growth of adoption of the top three metrics in 2010, as follows:
- A 333% increase in tracking revenue
- A 174% increase in tracking conversion
- A 150% increase in tracking average order value
Such a shift in measurement expectation is significant. CMOs indicate a 300% year-over-year increase in 2010 in the number of companies that plan to measure social media's impact on conversion and a 400% increase in the number of companies that will track social media's direct impact on revenues.
About the data: The survey of 133 CMOs was conducted by Bazaarvoice and the CMO Club in September 2009. Participating industries included software/hardware (17%), finance/insurance (9%), travel/hospitality (9%), media/publishing (9%), consumer goods (8%), and retail (7.5%). Annual company revenue ranges included $6-50 million (25%), $51-999 million (42%), and over $1 billion (23%).