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Indian brands to spend up to 15% of annual marketing budget on social media: EY study

MUMBAI: Around 90 per cent of Indian brands will spend up to 15 per cent of their annual marketing budget on social media, up from 78 per cent of the organisations in 2013, states the latest ‘Ernst & Young Social Media Marketing India Trends’ study.

The study, in its second edition, observed top digital and social media savvy brands in India to understand the maturity of the Indian digital landscape. It also revealed that 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.

It highlighted that Facebook remains a dominant platform for brands, followed by Twitter and YouTube. Google+ and LinkedIn are the most popular new platforms introduced by brands for marketing.

Brands particularly in the retail and travel segments are recognising the importance of image-driven platforms like Pinterest and Instagram. Incidentally, Instagram did not stand a mention by survey respondents in 2013.

EY partner and customer practice leader (India) advisory services Dinesh Mishra 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.”

About 23 per cent of respondents stated that their social media budgets were in excess of Rs 1 million per annum and 14 per cent of the brands spent Rs 10–20 million on social media in 2014. There was a decline in the number of brands that spent in excess of Rs 20 million from 17.1 per cent in 2013 to 14.3 per cent in 2014, indicating that brands are exceedingly cautious on the returns and are optimising spends.

As integrated campaigns are reckoned as effective, being able to attribute leads correctly, attain conversions and returns to channels, campaigns and devices will determine how budgets are allocated going forward, it mentioned.

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

“About 32 per cent 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 organisation irrespective of size must focus on developing capabilities and creating a strong internal governance framework,” Mishra added.

The study revealed that the top three objectives for brands to be present on social media was to build brand awareness, a community and customer engagement.

The study also addressed the key issues faced by digital marketers across sectors, and attempted to 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.

The challenges were the inability to measure the effectiveness of engagements successfully, to sustain or increase engagement rates, and create or curate content. However, the brands still tracked engagement, social reach, and visitor growth rate as the key social media metrics.

The brands that were surveyed also stated that they were looking to introduce social CRM and social commerce as priority items on their social media agenda, followed by customised ads or campaigns and gamification.

The study analyses how Indian marketers and organisations have been using the social media platforms and how they go about tracking the performance of their social media initiatives. Brands across industries have realised the significance of social media and its peculiar demands.

This edition of the study focused on current and emerging social media platforms, how companies evaluate, strategise and deploy investments in social media, how social-savvy brands measure success and the outlook of social media marketing.