In the fourth quarter of 2011, 22pc of businesses polled in the sector were investing in social media marketing. This figure fell to 8.5pc in the first quarter of 2012 and to 6pc by the second quarter. Pearlfinders, a major business research company, spoke to more than 5,000 marketeers around the world about their budgets.
“This represents an interesting about-turn. We saw investment in social media increase steadily throughout 2011, to reach the highest levels ever by the end of the year. However, as financial services brands embraced new methods for communicating with customers, they opened themselves up to criticism and negative sentiment,” said Anthony Cooper, Pearlfinders managing director.
“Banks, for instance, are becoming very wary of social channels and many are reconsidering whether they should invest in something that generates negative returns.“ A number of recent high profile events have demonstrated how financial services companies, such as banks, are simply not comfortable with transparency and openness. With social media, everything is in the public domain, which is well outside of their comfort zones.
“When it comes to spending on social media, marketing budget-holders in this sector are left wondering about the benefits, and many are simply putting spending on hold until they have developed a clearer picture of how social media can be harnessed to improve their brands.”
While banks and other major businesses, such as O2 whose customers suffered a major network outage last month, have been rightly criticised for not reacting in real time or providing enough information during crises, their withdrawal from marketing investment across these channels is understandable.
Pearlfinders also discovered that negative tweets about the six major high street banks in the UK (Lloyds TSB, Barclays, RBS, HSBC, Co-Operative and NatWest), over the last 30 days, were twice as common as positive ones.
All companies must retain a connection with Facebook and Twitter – but while the returns on investment are so hard to track and the conversations directly linking to brands near impossible to control, it is wise to exercise caution with the amount of investment put towards this marketing activity.
The study also noted that Twitter has overtaken Facebook as the marketing channel of choice – but only marginally.
Facebook, since its flotation, has come under huge pressure to prove how it will make money on mobile devices – as that it is how most of its users are accessing the social network.Display adverts rarely work on the small mobile screen – so Facebook has its work cut out.
Brands love talking about how many followers they have on Twitter, and how many ‘likes’ their company page has on Facebook, but there is usually silence when it comes them explaining what they can do with this army of fans which actually translates into cash. Simply put, they don’t know.
While the return on investment on social media marketing remains opaque there is more evidence to support concentrating on improving and providing a customer service which reacts in the same time it takes for a disgruntled punter to post a negative tweet.