Why Don't European Marketers Spend More On Social Media?

European marketers are as excited about social media today as ever before. In fact, according to our annual survey, three-quarters of interactive marketers in Europe either already use social media or plan to use it by the end of 2011 – and they expect social media marketing to grow in effectiveness more than any other online or offline marketing channel in the coming years. But there’s a problem: European marketers still aren’t spending very much on social programs. In fact, a quarter of the marketers in our survey plan to spend less than €35,000 on social media this year – and many of the rest won’t spend much more than that. And most European marketers said they had no plans to increase their social media budget this year compared to last.

I think this lack of spending is both a symptom, and a cause, of problems inherent in how European marketers use social media:

  • It’s a cause, because the resources aren’t there. One of the biggest problems social media marketers face right now is a lack of resources. When it comes to social media they have trouble finding budget, staff, time, and even good help from their agencies. And that actually makes a lot of companies afraid of success. You’d be surprised how often I hear statements like "I want to start a Facebook page, but what if it takes off? I don’t have the budget to staff it full time!" When marketers are afraid of success, rather than failure, then you know you’ve got a problem.
  • It’s a symptom, because it shows we can’t prove the success of social media. The fact is, all the marketers who are afraid of success may be a tad optimistic. Nearly every social media marketer we surveyed said they had problems with their social programs. And even those lucky enough to succeed are lousy at tracking the impact of their programs: Measurement is by far marketer’s biggest social media challenge. And without proving the success of social, it’s pretty hard to get a budget increase out of the CMO.

From my point of view, better measurement is the way out of this circular problem. If we get better at measuring our social programs, two things will happen. First, when we fail we’ll be able to identify why – making us better, smarter, and more successful social media marketers. And second, when we then succeed we’ll be able to prove it – helping us justify larger budgets and greater resources.

What do you think? How do you prove the success of your social media programs – and how do you justify your social media marketing budget? I’d like to hear your thoughts in the comments below.

Comments

Resources and Metrics

Nate - great observations. I work with the Social Media Director at my firm. However, we don't have issues with resources or metrics like our peers.

I think the reasons for our success is that:

1. We have a CEO who sees the value in social media (so the mentality is pro-social).
2. We don't launch a social media campaign without a form of measurement or tracking or... plan.

Resources and Metrics can be an issue if:

1. A lot of traditional managers still see social media as a fad - showing reluctance to use their budget on Social media programs.

2. The program manager is still stuck in the traditional way of marketing - and their forrays into Social Media, have failed. Because throwing money at something doesn't always mean clicks.

3. The program manager is inexperienced (we find this A LOT) and lacking the resourcefulness to know how to track or what tools are available to track.

In short, the social media promotion/campaign is much more than a tweet, or a facebook landing page.
It has to be an end-to-end system for it to be a success. It needs a goal, a promotion, some social media outlets, some landing pages, and an information database to collect data, etc.

Most program managers who do a lot of online marketing tend to have a leg up with social media.
Because many of the tools that are used to track SEM programs and online activity can be translated well into tracking social programs.

My 2-cents.

In my opinion more resources

In my opinion more resources are invested in social media in the US because people in the US believe more in online reputation than in Europe and thus they allocate more resources in controlling, improving and repairing the online reputation. And these processes can easily be undertaken though the means of social media.

In Spain, there is a culture issue as well

Thanks for the post, Nate. We appreciate very much some Social Media content from an European perspective. I don't know very well the UK market, but we are in a good position to know the Spanish one. I think we have an additional problem here, that is "innovation". Spanish people, for example, are quite conservative when it comes to risk money in new projects. The same with "entrepreneurship". When it comes to ROI, innovation programs are not accounted like sales programs are. But we don't invest that much on innovation.

Connor added a good question too. In Spain, for example, we haven't seen BIG reputational crisis in the Social Media landscape and I've been working on it or a long time (as much as of 2003). Even when Spanish people are heavy users of social networks and we have quite a long blogging tradition, we don't use to share "consumer affairs". I was always shocked to see how "little" consumer crisis (i.e. an empty box for a camera purchase) reached the big media in US.

PS. We currently work with 30+ big companies in Spain, that are spending more on our annual fees that the average quantity you mentioned, if you have any question or we can be of any help.

Thanks for the post Nate, and

Thanks for the post Nate, and totally agree with you Fernando. In Spain businesses are quite conservative and are not willing to risk money with something new. Bear in mind that in Spain Social Media is still at an early stage, and quite “new”. I work in a European SM consultancy and I do see how different projects are in different countries. Whiles in UK and Germany for example, the projects are much more innovative in Spain the focus is on engagement right now.

The way to resolve this issue and encourage Spanish businesses to explore all the opportunities Social Media can offer them it’s not just define a clear ROI but to prove it with case studies. Clients demand to see Spanish case studies, and this is the challenge we currently face.

Your right. I am obsessed

Your right. I am obsessed with case studies. It is not a common business practice in Spain and I see it always as an UK and US magnificent marketing tool. We have to share experiences and not be shy to show tactics and results.
More case studies. We, first ;-)

Sharing its the Key

Very true Fernando we are all quite obsessed with the same issue. Spanish businesses think other markets success is not enough so... sharing it’s the Key.

Follow the money

Good article Nate. You talk about the European use of social media (as compared with the US) and the issue of measurement. So how do you justify your social marketing budget, you ask?

The response is quite simple - make it show the results that matter for your business. SocialTwist (full disclosure - my company) has developed a platform that uses social media to drive social referrals. These referrals are baked into various types of marketing programs that target various objectives like awareness, promotions, loyalty and others, and amplify their effectiveness. The metrics are simple - the ones that are already used, like how many referrals, how many leads generated, etc. These are the goals of any marketing program, so we can explain ourselves quite well to our customers.

There are many applications of social media, like the measurement of consumer sentiment, where metrics are hard to both define, and measure. While I do not dismiss the value of such programs at all, in economies like this, justification is a fundamental need.

Vijay

Enjoyed the article Nate. I

Enjoyed the article Nate. I think fear of success is a result of two underlying causes--defining success and that every pesky ROI factor. For as long as social media has been out there it is still relatively new and while some metrics are starting to become standardized, there isn't a definitive word on what the standard measure of success is. Of course success varies based on individual goals, campaigns and execution but Fernando's point about a need for more case studies is very true. Companies need more examples to use for case studies to mimic, use for inspiration and benchmark themselves against. And those case studies will hopefully start to embrace an element or measure of ROI. It may be great that your product's Facebook page got 14,000 like's but does that translate into action? Into more sales?

As far as the Euro market pacing behind the US, just a personal observation and idea (I could be wrong!) but I would imagine the news/media exposure in the US creates a different sense of urgency via awareness that could lead to larger social budget allocations because our non-social media outlets are obsessed with it. Not sure how it is watching the news abroad on TV for example but in the Seattle market I can't count the number of times the local and national news broadcasters mention their twitter handle, facebook pages, flash hashtags and quote celeb accounts and blogs. It is constant. When I watch BBC news on occassion I just don't get that same level of social media integration. Would love to hear thoughts from non-US folks!