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Social Media Not Great For Advertisers

August 24, 2016

MediaPost has the details about a biannual study with CMOs conducted by the American Marketing Association, Deloitte and the Fuqua School of Business at Duke University.


The study says marketers spend about 11.7% of their budgets on social media and that’s a lot less than what was projected seven years ago. One big reason given: lack of ROI, one of radio’s big strengths, especially with recent data that’s been released by Nielsen and iHeartMedia.


According to the study, social media lacks any type of ROI measurement. Nearly half the respondents reported they have not been able to “show how their spending on social media has benefited their business,” and only 4.6% said it “contributes very highly to company performance.” Respondents estimated that their overall marketing spending on social media represents 7.5% of overall revenue but 11.3% of their total corporate budgets.




In October, Nielsen released an R.O.I. study that pointed out radio was delivering a 17-1 R.O.I. for four major department store brands. This data showed radio delivered a 16-1 return for two mass merchandise retailers, a 10-1 return for two home improvement brands, and a 3-1 return for three fast-food restaurant brands. Nielsen said the data it collected shows the two home improvement brands that implemented radio campaigns saw a 4% increase in sales. The brands also saw an 8% increase in total number of buyers and a 2% increase in transactions. The two mass merchandisers that executed radio campaigns experienced a 1% increase in overall sales, a 2% increase in total number of shoppers, and 2% in dollars-spent-per-transaction. At the three fast-food restaurants that implemented radio campaigns, a 6% increase in sales was recorded, a 6% increase in consumers, and a 1% increase in dollars spent per purchaser.

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