Is social media marketing crucial to brand reputation?

A new research report has revealed companies are set to increase their budgets for digital marketing - which may include search engine optimisation, pay per click and social media marketing - this year.

According to the Marketing Budgets 2010 Report, in association with ExactTarget, businesses are set to increase their digital budgets by 17 per cent this year.

This means digital will account for 24 per cent of total marketing budgets during 2010.

Morgan Stewart, ExactTarget's director of research and strategy, explains the motivation behind this shift may be caused by firms' attempts to improve their online and overall reputations.

Linus Gregoriadis, in a post for the e-consultancy blog, notes social media marketing in particular is driving businesses to increase their online budgets as they see it as being "crucial" to brand reputation.

"Though email and search marketing are still buoyant, the research shows that companies are most likely to be increasing their marketing spending on social media," he adds.

Guy Phillipson, chief executive at the Internet Advertising Bureau, recently echoed these comments, suggesting social networks were driving online advertising spend.

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