Nearly half of execs expect social marketing budgets to double in next 3 years, study finds

Dive Brief:

Almost half (46%) of surveyed business executives expect their company's social media marketing budgets will increase up to 100% in the next three years, according to new research The Harris Poll conducted on behalf of Sprout Social. Ninety-one percent of executive respondents forecast some sort of increase to social budgets.
Hikes in spending align with changing consumer needs, with social media standing as the No. 1 preferred way to learn about brands, besting email, TV and print advertising, The Harris Poll found. Social media also affects purchase intent, with 78% of surveyed consumers stating they're more willing to buy from a brand following a positive interaction.
Overall, 85% of executives see social as the center of their business intelligence. Respondents said the channel will play an important role in informing decisions around sales (67%), customer service (61%), product (53%), research and development (48%) and human resources (43%).

Dive Insight:

Social media, already a preferred engagement channel among consumers prior to the pandemic, has seen its popularity further skyrocket under the health crisis. It's a trend that could be having an acute impact on business strategy, as the new findings show. While investments in social media marketing have generally climbed upward in line with the rise of apps like Instagram and TikTok, the Harris Poll data compiled on behalf of Sprout Social keys into a considerable expected jump in budgets, with many executives seeing their spending potentially doubling over the next few years.

"Our research shows that U.S. companies today rely more on social media than any other communications channel for virtually all critical business activities," Anna Ginovker, director and senior consultant at The Harris Poll, said in a statement.

Audience could play a role in buoying the current interest in social media. Gen Z and millennials, elusive young cohorts who are often hard to reach on other channels, have contributed the most to the overall spike in social media usage of late, seeing their engagement grow 65% and 63%, respectively. Those same groups hold brands to a higher threshold when it comes to personalized experiences and relevancy, The Harris Poll found.

At the same time, social media is providing a wider range of functions for businesses. Surveyed consumers stated that, compared to a year ago, they're using social media more often to find new brands (43%), recommend brands to friends and family (33%) and make purchases (36%).

E-commerce has been a major focus for platforms on the product development front, as online shopping accelerates with the shuttering of retail stores due to COVID-19. Facebook, Instagram, Pinterest and TikTok are among the apps that have put a premium on building out their social commerce capabilities in recent months. Almost all (95%) of executives polled said they believe brands will rely more heavily on social media to identify business opportunities — including those outside of marketing — over the next three years.

But an expansion of budgets doesn't necessarily translate to confidence. In fact, fewer than half of surveyed executives view their current strategy with the channel as "very effective," with just 44% feeling "very confident" on execution. Uncertainty is reflected in consumer sentiment as well: 62% of consumers suggested businesses that fail to establish a strong social media presence will not succeed long-term.

The Harris Poll surveyed more than 1,000 U.S. consumers and 250 business executives to compile its findings on behalf of Sprout Social.