There’s a huge disparity in spending on social media. We asked respondents to estimate what their companies would spend on social media this year. Across the four regions, 37% of respondents’ companies will spend less than $1 million this year on social media activities: staff, technology, marketing agency fees, consulting services and other expenses. On the other end of the spectrum, 8% of respondents said their firms would spend at least $50 million; half of those will invest more than $100 million. (See Exhibit II-3)
Exhibit II-3: What Respondents Across the Four Regions Will Spend This Year on Social Media
Average spending per respondent will be nearly $19 million this year, but the median is only $2.7 million, which reflects the wide disparity between the biggest spenders and the smallest. Respondents predicted their spending would only grow by 2015 – by 28% to $24 million (average per respondent), and by 67% to $4.5 million (median). (See Exhibit II-4)
Exhibit II-4: Average and Median Spending Per Respondent Company
Spending by region of the world also varies significantly. (See Exhibit II-5)
Exhibit II-5: Regional Spending on Social Media (Per Respondent Company)
While $19 million per respondent may seem sizable, realize that it is far below the average spending in 2012 on Big Data and Analytics. In the TCS survey on Big Data, average spending per respondent was more than four times as high – $88 million – while median spending ($10 million) was five times the median for social media. (See Exhibit II-6). Still, average spending on social media was above the average spent by more than 600 consumer company respondents who participated in our 2012 survey on how they are managing consumers who want to do business with them through mobile devices. In that study, we found the average company would spend $15 million (and a median of $4.3 million) in 2012 on dealing with such digital mobile consumers.
Exhibit II-6: How Social Media Spending Compares to Big Data and Mobility Investments
We also asked companies how big their social media staff was across their entire organizations (not just in their divisions). The average number of social media employees working full-time across respondents’ companies was 56; the median was 19. These figures also demonstrate a big gulf between the respondents with a large social media staff and those with a small one.(See Exhibit II-7) About one-third of respondents totaled up 10 or fewer employees working full-time on social media across their entire company. At the other end were the 17% of respondents with more than 100 full-time social media staff across the organization.
Nestle S.A., the $89 billion (revenue) Switzerland-based food and beverage company, shows how many resources some large consumer companies are devoting to social media. In February 2012, the company launched what it calls a ‘Digital Acceleration Team’ at its Vevey headquarters, staffed with about 30 employees in a room that looks like a mission control room. The team monitors and responds when necessary to social media conversations and trends worldwide that involve Nestle, keeping watch for both positive and negative issues.1 The team also sets social media guidelines and policies for marketers at Nestle’s product brands, which collectively have about 150 million Facebook fans on 650 Facebook pages. The company is also active on Twitter, Pinterest and Google+.2
Exhibit II-7: The Size of the Social Media Staff
Staff sizes are larger in Asia-Pacific and Latin American companies (average of 63-70) as
compared to 51-52 in North America and Europe.
Exhibit II-8: Regional Differences in the Size of Social Media Staffs
But some companies had very large staff dedicated to social media. Take Ford Motor
Co. The $134 billion (2012 revenue) auto manufacturer has a ‘couple of hundred’ people
involved in social media, both inside and outside the company, according to its head of
social media.10 A large bank that we spoke with has about 100 people worldwide focused
on social media.
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Case Study: A Major Media Company