Social Media Marketing to Grow at 34%

29 07 2010

I just ran across a Forrester Research projection that Social Media Marketing spending will hit $3.1 Billion by 2014.  That’s interesting, but here is the really interesting news to this projection:

  • Social Media Marketing will grow at an annual rate of 34% for the next five years.
  • Online advertising in total is growing at 21%
  • This means that conventional advertising is falling in absolute terms.

This is not totally surprising, especially to anybody who reads this blog, but it is interesting how quickly the change has come.  I am teaching a course in MBA Marketing this fall and the course books have not caught up with how quickly and fundamentally this trend has changed the professional practice of Marketing.

There are some really good reasons for the rise of Social Media Marketing

  • Social Media Marketing costs less.  Let’s dispel the myth that SMM is “free.”  It takes experienced people and intelligence to do SMM well, but it still costs far less than conventional advertising methods.
  • Social Media Marketing is more appreciated by customers. SMM is not about carefully crafting a message, interrupting people, and ramming the message down their throats.  It is about providing value.
  • Social Media Marketing is more effective.  The core of SMM is to provide compelling content that target customers want to see.  In return, customers find out about your offering and your  brand reputation is enhanced.  Interrupt-driven advertising is increasingly hurting brand reputation.  Brand building is about being seen as useful, helpful and/or entertaining.
  • Social Media Marketing is more about listening than talking.  In the process, brands have the opportunity to build customer relationships and really hear what customers want.

The change is accelerating because the economics of SMM are so compelling.  The challenge for many companies will be the ability to make the cultural change to an almost entirely new style of relating to customers.

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