90% Indian brands to spend upto 15% of their annual marketing budget on social media

Bangalore, 19 February 2015

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  • The top three objectives to be present on social media for brands surveyed were building brand awareness, building a community and customer engagement
  • Top three challenges were not being able to successfully measure effectiveness of engagements, sustaining or increasing engagement rates and creating/curating content
  • Engagement, social reach and visitor growth rate were the key social media metrics tracked
  • Brands surveyed were looking to introduce Social CRM and social commerce as priority items on their social media agenda, followed by customized ads/campaigns and gamification

Companies and brands have significantly increased their social media spends even as they find it challenging to measure the effectiveness of their social media engagements according to EY’s second annual Social Media Marketing India Trends Study.

The study analyses how Indian marketers and organizations have been using the various social media platforms and how they go about tracking the performance of their social media initiatives. Brands across industries have realized the significance of social media and its peculiar demands. About 90% of organizations reached out to in this study are planning to spend as much as 15% of their annual marketing budget exclusively on social media, up from 78% organizations in 2013.

The study also addresses the key issues faced by digital marketers across sectors, attempts help them understand, leverage and navigate the social media space better. There is a distinct need for brands to analyse their maturity levels and explore disruptive opportunities for growth in the digital arena.

This edition of the study focused on current and emerging social media platforms, how companies evaluate, strategize and deploy investments in social media, how social-savvy brands measure success and the outlook of social media marketing. Digital and social media presence is a key element in the marketing mix of most brands. About 23% respondents stated that their social media budgets were in excess of INR 1 million per annum and 14% of the brands spent INR 10-20 million on social media in 2014. There was a decline in the number of brands that spent in excess of INR 20 million from 17.1% in 2013 to 14.3% in 2014 indicating that brands are exceedingly cautious on the returns and are optimizing spends. As integrated campaigns are reckoned as effective, being able to correctly attribute leads, attain conversions and returns to channels, campaigns and devices will determine how budgets are allocated going forward.

In 2013, we also found out that Social media is being increasingly used for thought leadership and internal communications, recruitment, and CSR in addition to marketing. About 35% of the organizations said that they use social media for thought leadership and around 27% said they use the medium for CSR. Increasingly the HR department is leveraging social media for internal employee outreach through unique platforms.

Speaking about the study, Dinesh Mishra, Partner and Customer Practice Leader (India), Advisory services, EY, said: “Through this study we reached out to India’s top social and digital savvy brands from the third quarter of 2014 to January 2015. It is our observation that while brands have invested financially and in processes, there is a need for holistic customer engagement and strong community building strategies through the use of social media. That, in my mind, will strengthen the brand and allow for innovative and meaningful interactions between communities, as well as between the company and the community.

“About 32% of digital-savvy brands in India depend on the internal core team for strategy but the average team strength is small varying from 1-3 people. Given the mass reach and quick response time in social media, ownership plays a critical role in success. Every organization irrespective of size must focus on developing capabilities and creating a strong internal governance framework,” he added.

You can Follow EY on Twitter @EY_India to discuss this report by using #EYIndiaDigital

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