Posted by John P. Mello Jr.
May 4, 2021 4:00 p.m. PT
According to a new survey by a mobile payments platform, many CEOs question the value of social media marketing.
Bango’s study, which surveyed more than 200 CEOs, claims that poor digital marketing practices and meaningless metrics “put the board to sleep.”
More than half of the managing directors (59 percent) state that social media channels do not generate any sales for their company.
“Nobody says social media can’t add value,” Bango CMO and report co-author Anil Malhotra said in a statement. “The problem is that this value is not carried over to the boards of the surveyed companies.”
He claimed that digital marketers have boxed reporting on clicks, likes, and engagement rates in such a way that they have lost focus on the business metrics that really matter in the boardroom – leads, sales, and profits.
“But it’s not just the metrics that are wrong,” he noted. “Due to the poor alignment, digital marketing does not deliver meaningful results either.”
“The rise of Facebook and Google as ad platforms has convinced marketers that what people like and share is exactly what they’ll buy. So today’s marketing budgets are targeting browsers, not buyers,” he said.
“Because of this, our report argues that digital marketers need to target their audiences based on actual buying behavior,” he continued. “This is going to impress the board – the ability to turn social media into sales.”
According to the survey, 62 percent of CEOs believe that too much marketing budget is wasted on activities that don’t produce meaningful results, while almost as many – 60 percent – think that the marketing potential of social media is exaggerated.
59 percent now believe that social media is good for building a good reputation, but not for generating sales.
Additionally, nearly two-thirds (66 percent) think marketers focus too much on tactical analysis and not enough on business results, while more than half (55 percent) think digital marketing metrics that aren’t related to sales are meaningless.
However, it may not always be immediately apparent whether or not an activity produces meaningful results. “There are items that ultimately turn into sales even though they have nothing to do with sales,” said IDC analyst Karsten Weide.
He added that social media advertising has a three percent conversion rate. “A three percent click-through rate would be good. A three percent conversion rate is an incredible number,” he told the E-Commerce Times.
Still, more than three-quarters of CEOs surveyed by Bango (77 percent) don’t see digital advertising as a reliable source of new customers or sales. This raises concerns about inaccurate targeting measures, the report added.
Rarely, digital campaigns target audiences who are converting to customers, and since CEOs expect marketing to have a measurable impact on the bottom line, misalignment becomes a major sticking point for CEOs and board members.
In search of measurability
Digital marketing has gotten lost, the report says, and many marketers have tried to mask poor performance results with a haze of meaningless metrics relevant to boards of directors.
“Marketers have always wanted some kind of measurability to see how effective their spending is,” said Boston-based media analyst John Carroll.
“That’s what digital marketing means to them,” he told the E-Commerce Times. “The kind of measurability you can’t get from a TV commercial in the digital world.”
“ROI has always been a key measure for marketers,” he continued, “but clicks and likes and engagements aren’t ROI.”
Marketers are making a mistake by treating social media advertising like mainstream digital advertising. “Social media is an environment where direct selling is typically counterproductive,” said Carroll.
“Social media is not the place to message consumers,” he continued. “It’s more effective to have a conversation with consumers to bring something of value to the community.”
“The hard selling that a lot of marketers do is not really conducive to the social media environment,” he added.
Win back the board
The results of the CEO’s skepticism may have been reflected in future issues. Although the social media ad spend projections published by eMarketer in March show an increase in spending from $ 58.66 billion in 2021 to $ 79.83 billion in 2023, growth declined over the reporting period from 26.9 percent in 2021 to 15 percent in 2023.
These predictions appear to be in line with the results of the survey on CEO attitudes towards more social media advertising. More than half (52 percent) would not be in favor of buying more Facebook ads, 54 percent would not buy more Instagram ads, 60 percent would show more search engine advertising, 66 percent would throttle Twitter ads and 77 percent would stop further spending on LinkedIn advertising.
There is a fundamental problem with these harsh attitudes across social media. “Where are you going?” asked Willow. “Everyone is digital. The average person spends a lot of time on social media. That’s where the people are. That’s where you have to pick them up.”
He claimed that there is not much understanding at the top of organizations about what is going on in the CMO departments.
Because of this, the tenure of CMOs continues to decrease. According to the latest figures from recruitment firm Spencer Stuart, the median tenure of a CMO is 25.5 months. “It’s an ejection job,” quipped Willow.
When marketers want to stifle some of the criticism from the top of their organizations, the Bango report recommends using “buying behavior targeting”.
Rather than targeting existing customers based on what they previously bought or new users based on what they like on social networks or what they search for on Google, buying behavior targeting can help marketers find new users who are similar Buy products elsewhere, the report explains.
If digital marketers are ever to stop boring the board with meaningless metrics, they need to make sure their paid, digital, and social campaigns deliver more than just likes, he added. Using buying behavior to get straight to shoppers is the easiest way to attract new customers, generate revenue, and justify social expenses to the board of directors.