Marketers are NOT spending their money where users are spending their time

by Justin Kistner on Aug 06, 2010

Earlier this week, Nielsen released their latest report on where U.S. Internet users are spending their time online. Social media dominated all other categories at more than twice the time spent on the next closest category. It occurred to me after reading that report that social media is not where marketers spend most of their money. So, I wanted to look further into the difference between where users spend their time online and where marketers spend their budget. Here is what I found.

Marketers are not fishing where the fish are

Social media not only represents the area where users spend most of their time today, but that was the case a year ago. Social media saw the largest growth of all areas at a whopping 43% increase over last year. It was also the largest growth area last year tripling in usage between 2008 and 2009. Yet, Marketing Sherpa reports that marketers are spending disproportionately less on social media.

Search dominates the marketing budget

The darling of online marketing, search represents the lion’s share of online marketing dollars. Accounting for a mere 3.5% of time spent, search accounts for the most dollars at 31% of the total budget. Search is an important acquisition channel for marketers because users have intent to engage at the time they are searching, but when combined with the budgeting dollars spent on the website they land on; 58% of the total online marketing budget is way to high.

Email is used a third less than it was last year

Users spent almost a third less time on email than they did last year, yet it still represents 19% of the budget. In fact, Forrester sees the spend on email marketing continuing to rise through 2014. What?! Users spend almost three times as much time on social networking, but marketers spend about half as much on social. This is the biggest disconnect in the modern marketing budget allocation.

Destination not Acquisition

The cornerstone of online marketing has been to drive traffic to the company’s website. This kind of acquisition marketing comprises 83% of the total marketing budget. Maybe more because 6% is spent on “other online marketing”, which likely includes more types of advertising. And this is a problem. Because unlike search, social networks and games are destination sites, not acquisition channels.

Nielsen also recently reported that users spend more time on Facebook alone than they do on Google, Yahoo, YouTube, Microsoft, Wikipedia, and Amazon combined. That means if you want to reach users, you need to set up shop inside Facebook, as compared to thinking about it like Google, which is a jumping off point. Facebook users are far more likely to watch your movie trailer or download your coupon if that activity happens inside Facebook, as compared to trying to drive them back to your website.

Given that users are spending the majority of their time on destination sites like social networks and games; marketing budgets look foolishly allocated by focusing on luring people away to corporate websites. The greatest opportunity for modern marketers is to shift online acquisition budgets to social media destination budgets.

Post Author

Justin Kistner is author of the 2013 Social Rich Media Benchmark Report and VP of Strategy at ShopIgniter, recently acquired by Mixpo. Justin has been a well-renowned leader in social marketing strategy for over ten years with leadership roles at...