Since the beginning of the COVID-19 pandemic, people have been spending more time than usual on social media. In an effort to reach those audiences, a new report [pdf] from The CMO Survey shows that CMOs are allocating more of their marketing budgets to social media.
The May 2020 survey of more than 270 top marketers at for-profit US companies revealed that social media spending grew from 13.3% of marketing budgets in February to almost one-quarter (23.2%) of total marketing budgets in June – a sizable increase over that short span of time. The B2C Product sector, in particular, has relied heavily on social media, with CMOs in that sector estimating that close to one-third (29.7%) of their marketing dollars are going to social.
Respondents also expect that this increased spending on social media will continue into the near future, with forecasts from CMOs suggesting that social media spend will account for about 23.4% of total marketing budgets 12 months from now.
Focus on Brand Building and Retention
In its February 2020 survey prior to the pandemic, The CMO Survey reported that although more CMOs expected to see increased new customer acquisition (79%) in the coming 12 months than increased customer retention (68%), the percentage of those expecting increased retention had noticeably grown over previous years.
During the pandemic, marketers appear to be making customer retention a priority. Presented with a list of 5 objectives and asked to choose their primary one during the pandemic, more than twice as many CMOs pointed to customer retention (32.6%) as acquisition (14%). (The top response was building brand value that connects with customers, cited by 33%.)
Moreover, although the majority of top marketers surveyed say that their social media use during the pandemic has been used for brand awareness and brand building (84.2%), retaining current customers (54.3%) was second on the list, ahead of acquiring new customers (51.1%).
This same pattern can be seen across B2C sectors, with close to the same percentage of B2C Services marketers using social media for brand awareness (76.5%) as to retain customers (73.5%). That said, a greater proportion of B2B organizations in both Product and Services sectors are still focusing their social media efforts more towards acquiring customers than retaining them during this time.
Beyond the top three purposes of brand awareness, retention and acquisition, companies are also using social media during the pandemic for other purposes such as brand promotions (48.4%), introducing new products and services (45.1%), improving customer service (39.1%) and improving employee engagement (38%).
Performance Has Improved
The increased investment in social media during the pandemic seems to have paid off. When asked to what degree the use of social media has contributed to their company’s performance during the pandemic (on a scale of 1 to 7 with 1= not at all and 7= very highly) the average answer was 4.2 across all respondents. This is up considerably from February 2020 (3.4) and from August 2019 (3.3).
The average contributions are somewhat higher for the B2C Product (4.3) and B2C Services (4.6) sectors, while B2B Services (4.2) is on par with the average and B2B Product (4.0) slightly lower.
The full report can be found here.
About the Data: Results are based on a May 2020 survey of 274 top marketers at US for-profit companies.