Social Media Research

New Research: Most Companies Do Not Have the Talent to Leverage Marketing Analytics

badge guest post FLATTER New Research: Most Companies Do Not Have the Talent to Leverage Marketing AnalyticsThe latest edition of The CMO Survey, from the Fuqua School of Business at Duke, has arrived, and there are some implications for social media marketers worth noting.

First of all, the study is solid–while it is based on a self-selected sample of about 400 marketers (88% of which are at least VP level), the sampling has been consistent since 2009, and as we always say in my business, the trend is your friend.

In the case of The CMO Survey, and for social media expenditures in particular, the trend is very friendly indeed, as the graph below demonstrates:

cmo1 New Research: Most Companies Do Not Have the Talent to Leverage Marketing Analytics

Now, there’s been some ink spilled about the 18.1% figure provided as a five-year projection, but let’s face it–it’s optimism, and not an actual expenditure, that is being measured here. Five years ago, WhatsApp wasn’t a 19 billion dollar company, so I’m not sure many of us can predict what 2019 looks like.

But we should have a handle on the next 12 months, and what these marketers are telling us is that they are going to spend more on social–over a third more than they do currently. This is good news for social, but there is also some not-necessarily-good-nor-bad news:

cmo2 New Research: Most Companies Do Not Have the Talent to Leverage Marketing Analytics

According to these marketers, they are planning to increase their spending on something that they aren’t even sure “works,” at least in the financial sense (and, is there any other sense?). Given that half of the sample has no idea what the impact of social is (and, to be fair, we don’t have the data to show the projected social media expenditures from that half), what do we think is going on here? Why are so many marketers plowing more money into something that might not even work?

Well, I think the answer lies in two other graphs from the same report that are NOT in the “Social Media” section. First of all, the graph I found most remarkable:

cmo3 New Research: Most Companies Do Not Have the Talent to Leverage Marketing Analytics

Again, the sampling for this study has been consistent since February, 2009, so to my eye, this trend is legit in terms of these marketers. That’s the highest level of optimism yet recorded in 11 iterations of The CMO Survey, so there’s certainly a rising tide lifting some boats–and social may be one of those boats.

If you don’t know your return on investment for a marketing spend, then that spend is by definition “experimental.” (tweet this)

And marketers are more likely to be experimental in good times than in bad. This means, of course, given the year-to-year fluctuations in this kind of optimism, that social media marketers have the next 12 months to get their analytics houses in order before the next downtick in optimism results in a potentially concurrent downtick in social media marketing budgets.

All of which leads me to the real bad news in this otherwise very rosy picture. The reason why so many marketers can’t show the impact of their social media efforts has less to do with social media than it does this highly salient graph:

cmo4 New Research: Most Companies Do Not Have the Talent to Leverage Marketing Analytics

The simple truth is that many marketers can’t show the business impact of social because they can’t show the business impact of a lot of things. (tweet this)

And it isn’t their fault. There is very clearly a shortage of analytics talent available to marketers (as another graph in this survey shows) in an era where the amount of data to which they have access has multiplied exponentially. It’s as if Silicon Valley just flooded, and there’s only one Aquaman.

All of which is to say this: if you are in the business of using social for your marketing efforts, either on the brand-side or the agency-side, now is a great time to dig those wells before you get thirsty. Use those extra dollars, and that extra optimism, to build analytics and pre/post campaign measurement into everything you do and to recruit or develop tomorrow’s analysts. End 2014 with more actionable insight and knowledge about the impact of social on your business than you have today. Hold your efforts to the highest possible standards–and let Darwin take care of the rest.

Only then will your 2019 look like the line on that first graph.

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cmo4 New Research: Most Companies Do Not Have the Talent to Leverage Marketing Analytics
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New Research: Most Companies Do Not Have the Talent to Leverage Marketing Analytics
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Description
The latest edition of The CMO Survey, from the Fuqua School of Business at Duke, has arrived, and there are some implications for social media marketers including an increase in social media budgets, an increase in marketer optimism, and a disconnect between these as a result of poor analytics and attachment to the bottom line.
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  • Peter Odryna

    Tom, this post is spot-on. We’re seeing exactly the same thing at SocialEars. But here’s the key point: Your sentence:

    “There is very clearly a shortage of analytics talent available to marketers (as another graph in this survey shows) in an era where the amount of data to which they have access has multiplied exponentially.”

    … should really add the qualifier “at any price”. There are analytics experts available as consultants or employees. But they are competing for a fixed $ pool against quality content writers, marketing automation experts, and other needs. It comes down to priority.

    “You manage what you measure” is a basic business rule. The data you highlight clearly shows this gap. Thanks for posting!

    -Peter Odryna – CEO SocialEars

    • http://www.edisonresearch.com Tom Webster

      It’s also a great time for analysts such as myself to “put on their loot-making clothes,” as my friend Chris Brogan once told me. To compete for that fixed pool of money, analysts have to show how we will save or even make money in order to show that value. But I firmly believe that a competent analytics function is a profit center. Thanks for your comment, Peter!

  • Bill Franklin

    I’ve heard of so many startup founders that want to ship code all day and handle all the marketing and social media too. It’s ok to wear a lot of hats when you’re small but specialising isn’t a bad thing.

  • Amy DeLouise

    This is spot on. But can you give some good case studies of pre/post campaign measurement tools/strategies? If I could offer some solid examples to my clients (for video and multimedia–in my case mostly targeted at donors during live events on web outreach) they might be more inclined put more dollars towards analytics.

  • http://sproutsocial.com/features/social-media-engagement Sarah @ Sprout Social

    Great topic, Tom. Makes perfect sense that marketing departments will spend more money on social when it’s clearly bringing in some sort of revenue. I think a lot of social media marketers get caught up in the content creation and measuring takes a back seat. But just good content without proof of it being good won’t get you anywhere.

    In my opinion, your most important point here is that it’s hard to prove the ROI of things other than just social. I think it’s worth acknowledging that almost 35% can show a qualitative impact. Social is still young- and the adoption of it as a marketing or business practice still isn’t incredibly widespread.

    It will be interesting to see the kind of analytics that those dollars are allocated to.

    • http://www.edisonresearch.com Tom Webster

      Yeah–attribution for offline purchases, especially, isn’t any more difficult with social than it is for search/display/etc.–in other words, none of it is “easy.”

  • http://visigraph.com/ barry brown

    I know a marketer who definitely underestimated the power of the social media. He said that it usually depends on whatever you are marketing to make it successful, and that it’s not applicable to everything. He finds no profit in using it. And although I get his point, it’s completely absurd to look at the power of social media that low. I think that whatever product or services you are promoting, you can certainly adjust accordingly that it suits the use of the social media outlet. It’s all about research and making it happen!

  • http://www.RoninMarketeer.com John Wall

    That amazes me that it’s self reported that they are unable to measure and at the same time are at a peak of optimism. It’s basically a cult.

  • Lkinoshita

    High-quality article, Tom. Very well done. Forester research also reports companies are spending about 2.5% of revenues on digital marketing. Sample size was mostly companies earning $500 million or more.

  • http://www.clickmarkets.net Chip Roberson

    There are some fundamental issues inside the enterprise. First, the c-suite needs to value the technological shift that is happening in marketing and stop viewing channels like social media (from whence a lot of data now comes) as something for the interns and new hires. Second, the company needs to understand that social media and marketing analytics are now part of the corporate communication infrastructure. This means it’s now a cost of doing business which means there is an opportunity cost for not investing. Three, there are many others areas companies invest money where the ROI is not easily computed. (What’s the ROI of a brochure or billboard or even the corporate phone system?) So, stop using the ROI metric as reason for not investing in hiring the right talent for managing marketing technology.

    Finally, the tools makers themselves need to stop developing analytics just because they can or because it would be “cool.” I’ve seen a lot of analytical bells and whistles that look interesting but don’t fit into the day-to-day needs of most marketers. Too much is being built from the outside in and not with the target user’s regular workflow in mind. I know more marketers who are frustrated with what they have than those who love their tools.

    Until we bridge this chasm, the deficit will continue.