Many CEOs doubt the value of social media marketing, according to a new study from a mobile payment platform.
Research by Bango, who surveyed more than 200 CEOs, claims that bad digital marketing practices and nonsensical metrics "put management to sleep."
More than half of CEOs (59 percent) say social media channels don't generate sales for their businesses.
"Nobody is saying that social media cannot add value," said Bango CMO and co-author Anil Malhotra in a release. "The problem is that this value doesn't translate to the boards of the surveyed companies."
He maintained that digital marketers were so busy reporting clicks, likes and engagement metrics that I had lost my focus on business metrics that actually mattered in the conference room - leads, sales, and profits.
"But it's not just the indicators that are wrong," he noted. "Digital marketing is also failing to deliver significant results due to poor targeting."
"The rise of Facebook and Google as advertising platforms has convinced marketers that what people like and share is an exact representation of what they will buy, so today's marketing budgets are targeting browsers, not buyers," he said.
"That's why our report says digital marketers need to start targeting their audiences based on actual purchasing behavior," continued. "This is what will impress the board - the ability to turn the community into sales."
According to the survey, 62 percent of CEOs believe that too many marketing budgets are being wasted on activities that are not delivering significant results, while almost the same - 60 percent - believe that social media marketing potential has been exaggerated.
Meanwhile, 59 percent believe social media is good for reputation building but not for generating sales.
Moreover, almost two-thirds (66%) believe marketers focus too much on tactical analysis and too little on business outcomes, while more than half (55%) consider non-sales digital marketing metrics to be pointless.
However, whether or not an action produces significant results may not always be immediately apparent. "There are items that eventually turn into a sale even though they have nothing to do with selling directly," said Karsten Weide, an analyst IDC.
He added that social media advertising has a conversion rate of three percent. “A 3% click-through rate would be good. A three percent conversion rate is a great number, ”said the E-Commerce Times.
Still, more than three-quarters of the CEOs surveyed by Bango (77%) do not see digital advertising as a credible source of new customers or sales. The report says this raises concerns about inaccurate targeting measures.
Rarely do digital campaigns target an audience that shifts to customers, 'continued and CEOs expect marketing to have a measurable impact on bottom line, lack of targeting becomes a major point of contention for CEOs and boards of directors.
Search for measurability
The report found that digital marketing has lost its way, with many marketers trying to hide poor performance with a haze of nonsensical metrics that are vital to boards of directors.
"Marketers have always wanted some kind of measurability to see how effective their spending is," explained Boston media analyst John Carroll.
"That's what digital marketing has to offer them," said the E-Commerce Times. "The kind of measurability that cannot be obtained from a TV spot that can be obtained in a digital world."
"Return on investment has always been a key metric for marketers," he continued. "But clicks, likes and engagements are not return on investment."
Marketers make the mistake of treating social media advertising as a major digital ad. "Social media is an environment in which direct selling is usually counterproductive," said Carroll.
"Social media is not a place to target consumers," he continued. "It's more effective to join a conversation with consumers to provide something of value to the community."
"The difficult sales that many marketers employ are not conducive to the social media environment," he added.
Recovery of management
The results of the CEO's skepticism may have started to show in future spending. Although eMarketer's forecasts for social media ad spend in March show an increase in spending from $ 58.66 billion in 2021 to $ 79.83 billion in 2023, the growth period declines from 26.9%. in 2021 to 15 percent in 2023
These predictions appear to be in line with survey findings regarding CEOs' attitudes towards more social media advertising. More than half (52 percent) would not support buying more ads on Facebook, 54 percent. wouldn't buy more Instagram ads, 60 percent. would support more search engine advertising, 66 percent. would choke ads on Twitter, and 77 percent. would stop spending further in LinkedIn advertising.
There is a fundamental problem with these tough attitudes on social media. "Where are you going?" Weide asked. “Everyone benefits from digital technology. The average person spends a lot of time on social media. That's where the people are. You'll have to pick them up there. "
He argued that there was a lack of understanding at the top of the organization of what was happening in the CMO departments.
Therefore, the term of the CMO is constantly declining. According to the latest data from Executive Search Spencer Stuart, the median term of CMO is 25.5 months. "It's a job with a catapult chair," Weide joked.
If marketers want to suppress some of the criticism from the top of their organizations, the Bango report recommends using "purchasing behavior targeting."
Rather than targeting existing customers based on what they've bought before or what they like on social media or what they're looking for on Google, purchasing behavior targeting can help marketers find new users who buy similar products elsewhere, the report explains.
If digital marketers stop boring the board with meaningless data, they need to make sure their paid, digital and social campaigns generate more than they just like, he added. Using targeting shopping behavior directly to the people who buy is the easiest way to attract new customers, build revenue, and justify social spending in front of your board of directors.