Spending on social media marketing in Europe is expected to reach EUR3.2 billion by 2017, growing at a compound annual growth rate (CAGR) of 17.6% over the next few years, from EUR1.4 billion in 2012. The figures for the United Kingdom are even higher with social media marketing spend expected to reach EUR816.5 million in 2017, up 77% from EUR391.6 million last year, according to the latest report from Forrester.
The estimated increase in social media marketing spend is under threat of the European privacy legislation (Data Protection Directive), which is due to come into force in 2016, Forrester said, adding that it could revise down its forecast for social media marketing spending by over EUR880 million.
It is hoped that the Data Protection Directive adoption will culminate by the end of the year, but is more realistic that it will be signed-up in March 2014. Once signed the legislation will not become law until two years after it is adopted, so a possible date of effect is the spring of 2016. As a result, the legislation is expected to suppress social media marketing spending by around EUR401.9 in 2016 million and EUR481.7 million in 2017.
The report also showed that over 70% of Western Europe’s population in 2017 will be engaged in social networks, up from 63.4% in 2013. In the UK, social media users will hit 77% by 2017. It also revealed that users are becoming more and more aware of the fact that companies and social networks are using a large amount of their data, which will compel marketers to be more transparent about the data they are using.
Throughout the period, social networks will be maturing even further and defining the individual return of investment (ROI) will be more difficult, which will result in marketers developing new ways to succeed in the social media environment, Forrester predicted.