According to the research firm Gartner, Inc., information technology is subject to a five-phase acceptance cycle: a Technology Trigger, Peak of Inflated Expectations, Trough of Disillusionment, Slope of Enlightenment, and Plateau of Productivity. Even zealous advocates of social media marketing (SMM) admit their craft is currently stuck in the disillusionment phase.
The Pew Research Internet Project finds that up to 74% of Internet users now use social networking sites. Results from Duke University’s respected CMO Survey show that social media, which currently represents 9.4% of the average.
U.S. corporation’s marketing budgets, will increase to 21.4% in the next five years. However, the 351 marketing leaders who responded to the CMO Survey overwhelmingly report that proof of performance lags spending, with only 15% of marketers reporting that their companies can show the impact of social media using quantitative approaches.
A HootSuite Social Business Benchmark survey similarly finds that, although 88% of business organizations believe social media has a place in their operations, only 40% have found a way to use it to improve their bottom line (see chart). Clearly, the survey results “point to a disconnect,” observes Christine Moorman, director of the CMO Survey.
Social media marketing can also be expensive. A survey published by online social media consultant Mack Collier finds that an outsourced program for all channels can cost anywhere from $3,000 to $20,000 per month, and the industry averaged between $4,000 to $7,000 monthly. Marketing executives cannot be blamed for expecting a demonstrable return on that investment.
Health insurers generally have proven to be late adopters of social media technology, but over the past year, that has begun to change, and all of the nation’s top health plans are now are undertaking at least some SMM. Still, like their counterparts in other industries, they might have trouble making a solid case for its use.
SMM advocates say the key lies in developing a better understanding of what social media marketing can do.