Financial services companies have added to the social media marketing debate as a new study has revealed the sector's marketing spend on social networks has dropped dramatically.
As reported in The Sunday Telegraph, the Pearlfinders Index Q2 2012 found that in the final quarter of 2011, 22% of financial firms were investing in social media marketing but by the first quarter of 2012, spend fell to 8.5%, and to 6% by the second quarter.
Pearlfinders MD Anthony Cooper told the paper: “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.”
He added: “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.”
Pearlfinders’ study also found that negative tweets towards the six major UK high street banks – Lloyds, Barclays, RBS, HSBC, Co-Operative and NatWest – were twice as common as positive ones during the last 30 days.
According to the research, Twitter has also overtaken Facebook as marketers’ channel of choice.
Both Twitter and Facebook have faced mounting pressure recently regarding the effectiveness of marketing on the platforms. Facebook suffered a blow when General Motors stopped advertising on the site just days before its IPO, claiming ads have little impact on sales, and would promote its products solely via the free Facebook brand page.
The recent BBC VirtualBagel experiment also added to the advertising effectiveness debate when it was revealed that a fake company, set up by BBC journalist Rory Cellan-Jones, receive 1,600 ‘likes’ in just 24 hours despite offering no products.
Twitter also faced similar criticism after it was made to publicly apologise last week for suspending the Twitter account of Independent journalist Guy Adams. When Adams tweeted the corporate email address of the president of NBC Olympics, Twitter alerted the firm - a commercial partner of Twitter – to the tweets. Under pressure over its commercial motivations, the micro-blogging site apologised for encouraging NBC to file a support ticket with its Trust and Safety team.
What do you think? Should companies still continue to invest in social media marketing?