Despite consumers flocking online, business’ are yet to fully embrace the opportunities that social media presents to them, citing confusion over measuring ROI and fear of negative feedback to Nielsen Online in their latest survey.
The Nielsen-Community Engine 2010 Social Media Business Benchmarking Study found that 70 percent of Australian businesses intend to undertake some form of social media for their business, a significant increase from the 40 percent engaged in social media in 2008. This difference has been attributed to responsibility for social media growing beyond the marketing team and gaining increasing traction at board level.
Melanie Ingrey, research director of Nielsen’s online division said: “Social media has finally made its way into the boardroom” with social media being used more strategically rather than tactically as a result.
“In the past year, there has been substantial growth in the number of consumers engaging with companies via social media, up from 23 per cent in 2008 to 38 per cent in 2009.”
Community Engine managing director, Piers Hogarth-Scott said the study was the first in-depth look into the way Australian organisations are engaging with social media. The results, he said, had “substantial implications” for business.
“This study reveals that corporate Australia has not just woken up to social media, but has seized on it as a vitally important addition to their marketing and business toolbox,” Hogarth-Scott said.
“And as traditional media becomes less effective in connecting with and engaging stakeholders, it makes sense for funds to be redirected into social media and, importantly, having control of their social media ecosystem and the ability to track and measure it.”
To accommodate social media into their marketing budget, big businesses are shifting dollars away from traditional marketing and online efforts, whereas SMEs are increasing their budgets to participate in social media.
Unfortunately owing the the new and unproven nature of social media, many companies are yet to buy into it, or if they are, are having difficulty measuring ROI compared to their traditional marketing spend.
The difficulty of measuring ROI or uncertainty how to establish KPIs for social media were perceived as barriers to entry by 34 percent of respondents to the Nielsen survey.
Among big businesses, 42 percent also said the fact that senior management had not yet “bought into” social media was a barrier to their organisation investing in it.
“Like all new marketing channels it’s to be expected that there will be uncertainty among some businesses in the short term over with how best to gauge the effectiveness of their investment in it. But measurability and industry standards will develop. The internet is, after all, the most measurable of all media” Hogarth-Scott said.
“What’s important is that the vast majority of businesses now know that without any investment in social media marketing, the ROI from their marketing spend across all media could be significantly diminished,” he said.