The vast majority of companies will increase their social media spending this year but marketers are struggling to measure success and understand the value, according to new research published this week.

The Value of Social Media Report, published by Econsultancy in association with Online Marketing Summit, found that four out of five companies (81%) expect social media budgets to increase over the next year, while 18% expect spending to stay the same.

But almost two-thirds of companies surveyed (61%) say their organizations are “poor” (34%) or “very poor” (27%) at measuring return on investment from social media.

The research, published to coincide with Online Marketing Summit 2010 in San Diego, is based on an online survey of more than 400 US companies and agencies, which took place in December 2009 and January 2010.

The study looks at the extent of social media marketing being carried out by organizations, the tactics being used and the business objectives they are trying to impact through related activity. Social media marketing includes the use of social networking sites and on-site activity including blogging, wikis, user-generated content, ratings and reviews.

The research also found that:

-) Facebook is the Web property mostly commonly used in social media, with 85% of companies using this site as part of their marketing strategy. This is followed by Twitter (77%), LinkedIn (58%) and YouTube (49%).

-) Over two-thirds of company respondents (67%) say that the amount of money spent on social media has increased since last year, while 30% say it has stayed the same.

The study examines how companies are measuring the value of social media, and the challenges involved in doing so.

The report finds that companies are using social media to help meet a number of key business objectives, including monetization of this channel through generation of sales and leads. As well as helping to meet harder financial goals, companies are also using social media marketing to achieve softer objectives such as improved brand awareness and reputation.

Apart from the widespread measurement of increased Web site traffic generated by social media, companies are typically struggling to measure the success of their social media marketing in meeting a range of harder and softer business objectives.

-) Increased traffic to Web site is the business goal that marketers are most likely to be trying to influence through social media marketing. Three quarters (74%) of companies say they use social media to increase traffic.

-) Direct traffic to Web site is by far the metric most commonly used to measure the impact of off-site social media, measured by just under two-thirds of company respondents (63%).

-) More brand recognition (64%) is the second most important business objective in terms of impact of social media. A similar proportion of respondents (62%) cite better brand reputation.

-) Despite the widespread recognition that social media marketing impacts brand reputation and brand visibility, only a quarter of all respondents (25%) surveyed use online brand mentions and brand awareness as a metric for measuring off-site social media success. Just 15% use brand perception as a metric.

Econsultancy US Research Director Stefan Tornquist said:

“Clearly, respondents across the spectrum understand that the value of the social media isn’t primarily in monetization and the hard metrics of ‘probable’ ROI. They see social as an avenue to enhanced brand reputation and greater engagement with their customers.

“This current emphasis on the value of relationships doesn’t mean that we’re done trying to quantify the impact of social media. Companies understand that they have a new way to approach a number of business objectives, and that they’ll need to put measurements in place. However, the industry isn’t at the stage of consistent measurement. The question moving forward is whether social media adoption will be hampered by this lack of standardization.”

Report URL: http://econsultancy.com/reports/value-of-social-media-report

Journalists and bloggers: Please contact Econsultancy for more information about this report.

Media contacts:

Stefan Tornquist, Research Director (US), Econsultancy

(e: stefan.tornquist AT econsultancy.com)

Aliya Zaidi, Senior Research Analyst, Econsultancy

(e: aliya.zaidi AT econsultancy.com)

About Econsultancy

Econsultancy is a digital publishing and training group that is used by more than 200,000 Internet professionals every month.

The company publishes practical and time-saving research to help marketers make better decisions about the digital environment, build business cases, find the best suppliers, look smart in meetings and accelerate their careers.

Econsultancy has offices in New York and London, and hosts more than 100 events every year in the US and UK. Many of the world's most famous brands use Econsultancy to educate and train their staff.

Some of Econsultancy’s members include: Google, Yahoo, Dell, BBC, BT, Shell, Vodafone, Virgin Atlantic, Barclays, Deloitte, T-Mobile and Estée Lauder.

Join Econsultancy today to learn what’s happening in digital marketing – and what works.

Call us to find out more on +1 212 699 3626 (New York) or +44 (0)20 7269 1450 (London). You can also contact us online.

About Online Marketing Summit

The Online Marketing Summit is truly unique from any other conference. There are no vendors, no salesmen, no exhibitors/booths and no pitching allowed. This educational environment facilitates incredible learning, networking and collaboration opportunities amongst like-minded marketing peers. OMS is singularly committed to its mission to educate marketers on the emerging best practices of online marketing.

http://onlinemarketingsummit.com/about-oms

Published on: 10:45AM on 23rd February 2010