Monday, October 26, 2009

Survey Suggests Marketers Are Moving from Paid to Social Media

Summary: a new survey suggests that marketers are less focused on lead generation than on final sales, growing current customers and building online communities. I’m not sure I trust the data, but it’s a pretty picture nevertheless.

I don’t know quite what to make of the 2009 Survey on Marketing, Media and Measurement released earlier this month by custom content company King Fish Media.

- On one hand, it’s a rare opportunity to see data from business, rather than consumer, marketers. (Of the 230 respondents, 52% were pure B2B and another 36% were mixed B2B and business-to-consumer.) So I'd really like to believe it.

- But on the other hand, the sample seems dangerously unrepresentative: 44% said their organization’s primary industry was “publishing/media/advertising/marketing”, which is vastly higher than the real-world proportion. Presumably this was the result of the survey method – an online survey based on email invitations to the lists of King Fish and co-sponsors HubSpot, Junta42 and Upshot Institute. In addition to the industry skew, this probably reached a group that’s much more online-oriented than marketers as a whole.

The best I can do is to treat the results very carefully: assuming that this group shares some characteristics of the broader universe, but keeping in mind that some answers might reflect its atypical composition. Here goes.

1. Marketing Measurement Practices

The group reported using three broad types of marketing success measurements:

- 91% measured new customers acquired or leads generated.
- 63% measured customer retention or sales from current customers or lapsed customers.
- 54% measured brand-marketing-style metrics such as awareness, perception or intent.

Directionally, this seems about right: more marketers focus on new business than on existing customers, and brand-style measurements are less common than business results. The figures for existing-customer measurements are higher than I would expect, but perhaps that’s because publishing marketers are more directly responsible for renewals than business marketers in general.

Another oddity was that more people report measuring new customers (77%) than leads (73%). An optimist would treat this as evidence that marketers are adopting an end-to-end vision (as they should) rather than ending their responsibility when a lead is handed over to sales. But think the more likely cause is that marketers in publishing are more likely to sell directly (i.e., without a sales force) than in other industries.

Incidentally, the survey also found that 73% of respondents had guidelines in place to measure marketing success, but just 50% said their company requires a measurement plan as part of its program approval process. Treat this as you wish: is it impressive that 73% have measurement guidelines or frightening that 27% do not? Also bear in mind that 91% were at least using measurement on acquisition programs (some, apparently, without standard guidelines). So I think we can conclude that basic measurement is widespread, although its quality and consistency are questionable.

2. Spending on Acquisition vs. Existing Customers

Media spending by purpose was distributed:

- 56% for new leads
- 33% for retention
- 10% for other

This is interesting because I don’t recall seeing other data showing this split. The actual numbers show much more spending on retention than I would have expected. As with the measurement figures, this probably reflects the business of the survey responders.

3. Media Preferences

The main thrust of the survey was how marketers view different media. Marketers were asked to rate "the most effective way to communicate with customers and prospects", with separate answers for each. Here are the results:

for prospects/leadsfor current customers
corporate Web site75%70%
social media73%72%
custom content and media70%77%
face-to-face events69%62%
white papers / e-books67%52%
Webcasts and virtual trade shows64%51%
e-mail marketing58%78%
online advertising42%13%
direct mail promotions33%34%
print advertising33%17%
broadcast advertising10%11%

If there’s a pattern here, it’s that awareness-generating media (e-mail, direct mail and online/print/broadcast advertising) rank shockingly low, especially for prospecting. Apart from using email for customer communications, the respondents gave their highest rankings to the corporate Web site, social media, and custom content.

But how, exactly, can they attract traffic for the Web site, social media message and custom content if they don’t reach out to new audiences? I can think of (at least) two answers:

- they can’t, and the answers just reflect an infatuation with online media. I’m not saying the respondents are poor marketers: chances are they really do use the low-ranked media, but don’t consider them terribly effective. (Other answers in the survey suggest the same thing, showing that budgets are moving away from the low-ranking media to the high-ranked categories.)

- they can, by using social media and custom media in the awareness- and traffic-building roles previously handled by paid advertising. Put another way, the traditional first steps of generating awareness and interest are handled by the community rather than by marketers themselves. In this world, marketing’s role becomes to nurture communities of enthusiasts and evangelists, and then to meet the needs of prospects attracted by the community. This is what I meant in my September 23 post about community-centric marketing replacing customer centricity. (Can I coin CBM as a new acronym for Community Based Marketing?)

Obviously the second possibility is more intriguing. It’s surely correct to some degree, although the Big Question is how quickly and how far marketers’ role will shift. Given my concerns about this survey, I wouldn’t treat its results as definitive answers. But they're still tasty food for thoughts.


Scott Hoffman said...

David, nice write up - what I think is happening is that Marketers are spending their resource (time & money) on a social presence, this doesn't equate 1:1 in terms of media spending, but may cost as much. Buy $100k in ads or hire 3 interns to do social media...I think that may be the key to some of the research that we have been seeing lately.

I also blog about the online media industry at, check it out when you get a chance.

Michael said...

Great post. I've pondered aloud today at The Buzz Bin - about what happens to customer experiences as we go more social. What do you and your readers think? Do we really need The New York Times and legions of repeating bloggers to take on our customer service complaints. Is every negative customer experience newsworthy?

David Raab said...

Hi Michael,

You're hitting the nail on the head: right now, there's something newsworthy about some customer service issues (e.g. the United Airlines guitar video) but we'll get tired of that pretty quickly. There will be an evolution -- hopefully in a way that self-regulating communities can emerge and somehow filter content so the most truly important rises to the top. Community ratings systems are an obvious example but surely not the ultimate solution. One problem I've been considering: do communities become so isolated and self-reinforcing that false beliefs become accepted as validated? Think members of the Flat Earth society who rate each other and eventually conclude the world must be flat because all the high-rated authorities agree?