Social media spending is predicted to surpass that of traditional marketing within the next five years, according to results from a survey conducted by the Fuqua School of Business.
The survey, known as the CMO survey, is a nationwide poll of chief marketing officers conducted twice a year by Fuqua. More than 400 top marketers at Fortune 100, Forbes Top 200 and CMO club companies were surveyed for the February 2011 poll.
Social media, according to the CMO Survey, refers to “online content created by companies, customers, and others on the web” and exists in several forms including blogging, product reviews, social networking, forums and video/photo sharing.
Christine Moorman, founding director of the CMO survey and the T. Austin Finch, Sr. Professor of Business Administration at Fuqua, explained that firms are trying to determine how consumers are utilizing social media as it continues to grow in use and popularity.
Moorman said "brick and mortar" businesses have come to face new marketing challenges in light of expanding online companies like Amazon.
“It is cheaper to use social media as a sales force,” Moorman said. “Borders [is] going out of business because Amazon is doing things at half the cost."
Moorman noted, however, that there is still a great deal of experimentation taking place, as companies have not yet determined how to integrate marketing strategy with social media. Companies that "figure that out" will be in a better position to offer value to their companies, she added.
Despite the greater interaction and selection offered by in-store experiences, the observed increase and predicted growth in social media spending among companies across the board may be explained best by a question posed by Moorman.
"If customers can stand there and buy [a product] on their iPhone, how can ['brick and mortar'] companies sustain a business model?"
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