DURHAM, North Carolina: Nearly two-thirds of US marketers are now using social media, and this channel is set to increase its share of total expenditure into double figures over the next five years, according to a new study.
The CMO Survey was based on a poll of 511 senior marketers by Duke University's Fuqua School of Business, in conjunction with the American Marketing Association.
It found that 65.4% of companies are using social networks like Facebook as part of their efforts to connect with consumers.
This compared with 52.3% utilising video- and photo-sharing sites like YouTube and Flicker, 50.9% writing corporate blogs, and 44.4% with a presence on "microblogging" services like Twitter.
Among the firms employing these tools, 81% did so for "brand awareness and brand-building", with 55.8% hoping to "acquire new customers", and 51.9% introducing new products via these portals.
A further 47.6% of participants argued their activity on such platforms focused on retaining their existing customers, while 46.1% used them for market research, and 42.2% for promotions.
While the typical marketer spent 3.5% of their budget on this medium over the last year, this is expected to rise to 6.1% in the next 12 months, and to 13.7% by 2013.
By contrast, adspend through traditional media will fall by 7.9% for the year ending in August 2010, although online outlay will increase by 9.5% in this period.
Financial support for brand-building initiatives will also grow by 4.5%, with CRM expenditure climbing by 6.4%, and new product introductions posting an uptick of 9.3%.
In terms of consumer spending habits, 48% of contributors agreed purchase volumes will increase in the next 12 months, while 28.3% predicted overall sales would decline.
In terms of customer preferences, 34.1% regarded "low price" as being the main driver of behaviour, with 19.6% applying this status to "trusting relationships", and 18.8% to "superior product quality".
Brands, however, were seen as the primary factor in shaping purchase decisions by just 5.3% of the sample, rising to 7.2% for "superior innovation", and 15.3% for "excellent service".
Almost a quarter of the panel cited the emergence of "new global competitors" as the likely major dynamic in their category in the next year, with a similar number saying the same for a new domestic rival.
In terms of their spending priorities, 45.6% of respondents said they would focus on promoting existing products in current markets.
By contrast, 17.7% plan to push their present portfolio in new markets, 26.2% will launch new products in their present areas of operation, and 10.4% will introduce new products in new markets.
Data sourced from Duke University; additional content by WARC staff