Sorry to disappoint you, but the most important marketing questions for 2011 aren’t about social media.
In an Aite Group report on social media marketing in financial services, more than half of the FIs surveyed said that, as a percentage of their overall marketing budget, social media is too small to measure. Looking out two years, more than half don’t expect social media’s percentage of the total to exceed 10%.
This means that for at least the next two years, more than 90% of FIs’ marketing spend will go to areas other than social media. And that means that the two most important marketing questions for 2011 (for financial institutions) are:
1. How will Marketing improve the effectiveness of non-social media-related marketing channels, tools, and approaches (i.e. direct marketing, email marketing, TV and radio advertising, search marketing, promotions, PR, etc.)?
2. How will Marketing reallocate its budget between channels, tools, and approaches to improve overall marketing effectiveness and ROI?
If I were the CFO of a financial institution, I’d call my CMO into my office and tell him/her that I would cut the marketing budget in half if s/he couldn’t answer these questions. There has to be CFOs out there thinking “if social media is so damn great, and so much more effective and efficient than other marketing channels and approaches, then Marketing should be able to get as much done as it does now with half the budget, no?”
If I were the CFO of a financial institution, I wouldn’t care less what Marketing did with the 1 or 2% of the budget that went to social media. That’s play money, funny money. I’d want to know what they were going to do with the bigger chunks of the budget.
If I were the CFO of a financial institution, I’d be worried, and maybe even a little confused, about marketing. Because if a CFO were to read all the things I read, s/he might begin to think that all other forms of marketing are declining in effectiveness, and that the only thing working these days is social media. And if that was even remotely true, then a CFO should be worried that a lot of the marketing budget is wasted spending.
And if I were the CFO of a financial institution, and you (the CMO) showed me your Facebook strategy and yada yada about how social media is about “quality not quantity” — and didn’t tell me how it fit in and integrated with your broader marketing strategy — I’d be inclined to throw you out on your ass (which is a big clue as to why I’m not the CFO of a financial institution).
So does this mean that social media isn’t an important question for 2011? Not at all. If it is the most important question for your financial institution, though, you should be prepared to give up a lot of your marketing budget. You’re simply wasting too much money in other channels and tools.
This is a topic that I think is being completely mishandled by a lot of marketing professionals. Here’s what I see over and over:
1. Marketing or PR sets up a Facebook account because everyone is and it’s “free”
2. Marketing or PR sets up a Twitter account because everyone is and it’s “free”
3. Arguments ensue internally about who owns posting to accounts, why nothing is becoming “viral” and what revenue (or lack thereof) is being generated as resources start being used to maintain the accounts and create relevant content.
I’m not against these things. But we need to change the emphasis on the technologies to a focus on the basic principles of socialization that directly impact who and where we spend time with others. By considering these basic principles first and then what tools to use, how to use them will become self-evident.
We’ve been social since the dawn of time. I’m with you – any marketer that explains social media as a facebook account, a twitter feed, a foursquare strategy, etc. should ultimately expect to have some explaining to do. Focus on your brand and your strategy and how these different tools can help facilitate social interactions that 1) simply one integrated part of your overall brand strategy, and 2) ultimately deliver a path to purchase.
A good starting point to answer both of these questions is research. Improving effectiveness and reallocating the budget appropriately requires data and information. Too often, there seems to be an expectation among marketers that marketing budgets should automatically increase every year. Yet, many fail to offer rationale to support these budget increases. Marketers without research tools or expertise should allocate some of their budget for this important and often-overlooked first step.
Great questions, Ron! I would add this question into the 2011 mix: what marketing strategies and tactics are you NOT going to do this year? Too many times we add and add marketing projects and mediums but never take any others away. We add SEO and CPC but still advertise in the Yellow Pages. Really? Before adding a particular medium look at the currents ones that should be nixed.
“Garbage like this?”
You didn’t read the post very well.
Social Media SHOULD move the needle, and be effective. And it SHOULD be integrated into an overall strategy.
What is “garbage” is the idea that names purchased off an email list are equivalent to the people who actually browse in your store.
Businesses who are just now considering HOW they ought to integrate social into what they do are very susceptible to those who game the numbers — and the numbers that can be most easily gained are the ones too far removed from the point-of-sale to matter.
My post at Social Media Explorer was about being smart about which number you will consider relevant, and in that regard is very much in the spirit of this post and the advice you’re giving.
Ike: You’re right. I didn’t read closely enough. Sorry for insult. What clouded my view was a tweet that linked to your post that made it seem to me that the implication was that a social media-generated name was somehow better “quality.” But after going back and re-reading your post, I see that wasn’t what you were implying. Sorry. I’m removing the link. Ron
Not a problem. No blood, no foul.
(I agree with everything else in the post. I’d only add that smart CMO’s, knowing what happens in modern crisis scenarios, ought to be beefing up that part of the budget for other reasons…)
Nice to connect, Ron!
Kent: I think in a lot of cases it’s actually not the marketer’s fault they’re focused on a “facebook” strategy. Part of the problem is that the CEOs and other senior execs hear about this stuff, and then turn to the CMO and say “what’s OUR Facebook strategy?”. In the absence of any kind of coherent marketing strategy, marketing then runs out to develop a Facebook strategy.
Brady (and Mark): Yeah, I don’t know. I think a lot of marketing departments DO have a rationale: They have a list of all the additional initiatives and things they want to do. But Mark hits the nail on the head: Somebody has to ask: What should we stop doing.
It was Peter Drucker who said that strategy is as much about figuring what not to do as it is what to do.
And to that, I have often said (although I am quoted on this far less than Mr. Drucker): A firm that doesn’t figure what not to do, will find itself in a lot of do do.
Biggest mistake I see is where there is a territorial battle, and essentially a new technology ends up in a single silo.
Who the hell is the Chief Facsimile Machine Officer again?
Most seem to get it when you explain that:
– 10 years ago, we were debating whether employees needed their own computers with internet access.
– 15 years ago, we were debating whether employees needed their own email addresses.
– 30 years ago, we were debating whether employees needed their own telephone on their desk.
It’s a tool.
You use it to strengthen your personal network, and the relationships you’re charged with maintaining.
If that’s customers, then fine.
If that’s prospects, that’s great.
If that’s vendors, fantastic.
If it’s the media we’re talking about, do it.
The big problem is ‘Social’ shouldn’t be a marketing strategy in and of itself. You have a plan for engagement and retention, share of wallet and increasing profitabilty/ customer, and new customer acquisition. The smart marketers know why they are using social media and craft a strategy accordingly.
Shawn: You know what the problem is… wait… you know what MY problem is… (OK, ONE of my problems): I’ve been reading too much of this hoo ha social media crap from self-proclaimed social media gurus who claim that “those that never get it never will” (Brogan) or “its time to get off the social potty” (Social Media Today). The world of marketing has been taken over by religious fanatics (and social media is their religion). And like too many other religious fanatics, they either try to convert you or they refuse to believe that other “religions” might have a place in this world. I REALLY gotta get out more often.
I call them the Kumbaya Chorus.
@ike 1 for Kumbaya Chorus
The true problem for CMO: having soon or later to justify their choice of media mix and marketing expenses with something more relevant than “I have to be there”, “tv is cool for my brand”, “having an Ipad app is good to attract Gen Y”.
Digital world is bringing stats and data to justify ( in real time sometimes ) lead generation and ROI.
the longer term goals (brand awareness etc) and untangible ones will continue to be playground for communication agencies which play with their clients’ money.
Ron, good point as usual. But i would then argue it IS the marketer’s fault. Every exec with whom i have ever worked has said they count on their staff to push back when they see a problem. The problem, as I see it, is that many marketers do not have the wherewithal to call a time out on social media and consider the deeper socialization issues that at play. I strongly believe this is not about Facebook or Twitter or Foursquare., but more about how we address the very simple issue of how we interact with others. And, as some have already stated, it is really about strategy. If your are implementing a social media strategy that isn’t coordinated with your overall brand strategy, there is a very high likelihood it will fail. Which I think fits within the overall thesis you presented.
Love the posts. Thanks for making me think.
ha ha ha… the tactics some of today’s ‘social gurus’ use remind me of high school: “smoke this and you’ll be cool” 🙂
And on the bizillionth day I created Social Media. Really boys and girls? I think not. Keep it simple. Engage with your customers where they like to engage you.
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