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Study: Retailers Shift Marketing Dollars Towards Social Media

Source: Study: Retailers Shift Marketing Dollars Towards Social Media, Mashable

Although many retailers are reducing their online marketing budgets, spending on social media is falling at a slower rate than spending in other online marketing channels.

Moreover, amongst companies that are weathering the current economic storm and expanding marketing budgets, investments in social media are generally on the rise. This according to a new study released today by The National Retail Federation’s and Forrester Research.

Overall, the study found that 30 percent of retailers plan to reduce their online spending this year, while 24 percent plan to increase it and 46 percent are keeping their budgets the same. However, the stats get more interesting when you drill down to how both the successful and the struggling retailers are allocating their marketing dollars.

Key Findings

Amongst retailers that are reducing spending, 56 percent are cutting spending on search engine marketing, while only 24 percent will cut their social media marketing budget.

Amongst retailers that are performing well (“beating expectations” according to the study), 12 of the 20 will increase spending in social media marketing.

Further, amongst retailers that are increasing budgets, 80 percent will put more money into search, while 65 percent will put more into email marketing.

Surprising? Not Exactly

While this report shows continued strength in social media marketing, it’s important to note that search marketing is still a much bigger space. Hence, there is generally more money to be cut from search budgets than social media budgets, which explains in part why search dollars are being cut faster than social media dollars.

Additionally, as you can see, retailers that are increasing budgets are putting money into search advertising at a higher rate than social media – again, not surprising because there are simply still more eyeballs to reach through search.


Consistent with other statistics we’ve observed, social media marketing budgets are generally on the rise in spite of an overall slowdown in spending.

Further, the trends in search marketing are consistent with other statistics as well. For example, Google’s most recent earnings report showed the company’s first ever sequential decline in sales due largely to a slowdown in search ad spending.

While money might flow back into search at a quicker rate than social media as the economy recovers, social media remains a growth area, that on a percentage basis is weathering the storm better than other areas of online marketing.

Additional resource: Business Wire

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