OMG! Social Media is EXPENSIVE!!

Time to do some myth busting!

Myth 1: Social Media is CHEAP – for almost ZERO media cost and effort you can build massive Brand presence

Myth 2: If people are talking about your brand on Twitter or LIKE ing your FaceBook page, you should be getting great sales, right?

Myth 3: Anyone can build businesses with Social Media

Here’s why! eMarketer projects social media advertising at $3.08 billion or roughly 10 percent of the $31.3 billion total online advertising spend for 2011.

According to a survey by Brandon Hall Group-Covario- As businesses use more Social Media, their social media marketing investment increases.

But, it’s not just the media costs! Closer examination of the major business expenses associated with social media programs shows the largest increases are in

staff, advertising spend, influencer/blogger programs, custom technology, and social customer relationship management (CRM), according to an Altimeter survey shared by eMarketer.

Intuitively, this makes sense since the more involved a firm is in social media, the more resources you need, more supporting marketing and more technology support required to ensure the firm’s systems integrate with social media, especially for tracking customers and sales.


To truly understand and evangelise social media marketing inside your corporate, you need to know which parts of the sales cycle your program, campaign, process will impact most. Most likely, you will involve Corporate Communications, Online marketing , some sections in IT, pre-sales, and most definitely, customer care. You might also need budget support ,management time and creative talent. So, it’s a good idea to look at the holistic picture, look at your marketplace, your customer, key stakeholders – internal and external, your organization, its current orientation, preparedness and then, incorporate social media as part of a larger corporate plan.

Here’s a look at five budget categories, but there would definitely more, depending on your business vertical, cause organization, consumer segment:

  1. Head count. Social media needs real-time responses from real people. Try manning a live Twitter account for a few days, you’ll know what I mean. For businesses, this often translates to more than just a Social Media Manager. I believe a mix of social media expertise and subject matter excellence is a better for organizations which operate in the Knowledge Economy.

    Staff involved in social media marketing and execution could include the following:

    1. Social media specialists. These employees/ outsource talent represent the firm on a variety of social media platforms.
    2. Marketing/PR Resource. Because social media is integrated into marketing strategy, it’s critical to have one or more people actively participating and managing your firm’s participation.
    3. Creative Talent. These resources may be internal or outsourced in terms of consultants or agencies. They’re responsible for creating content, internal marketing, and social media-related marketing.
    4. Subject Matter Specialist. Depending on your offering, it may be important to have a product specialist who can interact with your customers and the public.
    5. Technology. Includes resources to set up social media platforms and keep them going. Further, they make sure that social media platforms integrate into established company systems and provide sufficient bandwidth.
    6. Analysts. Examine the information collected including the brand monitoring and assess the company’s position and progress.
    7. Customer Service. Due to the fact that social media creates another customer communication channel, involve customer service reps who can write and chat on Twitter/ FaceBook, and other forums.
    8. Legal/compliance. With social media’s ability to stir up a variety of issues, have dedicated legal resources who can give answers quickly and not wait weeks or months for an answer.
  2. Content development. While its optimal to have internal resources create your content, you may need more head count and/or editorial support.
    1. Editorial support. Develops an editorial calendar and provides guidance on the social media content.
    2. Content creation. If employees aren’t able to handle content development, then outsource this function. You can use employees, passionate customers, and freelance content creators.
    3. Copy editing. Regardless of who creates your content, use professional copy editors to make sure your content is well-written and is consistent with the Brand Tone of voice (ToV).
  3. Marketing support. Marketing plug-in helps your social media execution to meet branding, traffic, and sales targets.
    1. Social media branding. Depending on the platform, you may need more creative and support to represent your brand effectively.
    2. Advertising. To drive people to social media executions, options include traditional media, online advertising, social network advertising, and search.
    3. Support marketing. This includes internal marketing such as the website, emailing, and offline promotion as well as landing pages and other internal media.
  1. Technology. Technology is the glue that ensures that your firm’s website and systems connect with the RIGHT social media platforms.
    1. Social media platforms. Some networks may need additional fees or technical support. More over, some tweaking may be needed to workproduct delivery and related tracking into the platform, if you are planning for Social Commerce.
    2. Content management systems or blogging software. Depending on your business’ social media execution, you may need specialized systems to manage your content.
    3. Website integration. It’s critical to make sure that social media participants can seamlessly reach your website homepage. No! Am NOT a fan of businesses who are doing away with this VIRTUAL estate and relying totally on FaceBook Fanpages- remember Geocities?
    4. Systems integration. As with any technology project, getting the different pieces to work together is challenging, especially with legacy systems.
    5. Server support. You need to handle traffic spikes when there’s a promotion or event. Think Cloud Servers!
  2. Analytics. What’s the RoI on Social Media? you do need to go beyond LIKE’s, RT’s, Followers and Comments. Management likes to think in terms of funnels, and believe you me, even Google Analytics doesn’t reach the Board Room unless there is a strong sales/ conversion story.
    1. Brand monitoring. You must track what’s being said about your company, your brands, your senior executives, and your competitors. But, before the fire, you need Online Reputation Management cover ready, ready in case you uncover early indicators of a problem.
    2. Ongoing analysis. At a minimum, ensure that your current tracking and systems can accommodate your social media activity.
    3. Social CRM. Depending on your customer tracking, you may consider incorporating your social media touch points

Regardless of what you expect to spend on social media marketing, it’s likely to be higher. As a marketer, the benefit is that there’s a good likelihood that your social media expense will be spread across several departments.

Are there any other expenses you’d add to this list? If so, what are they?

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This entry was posted in communications, consumer research, Corporate, marketing, social media, social media marketing and tagged , , , , , , , , , . Bookmark the permalink.

5 Responses to OMG! Social Media is EXPENSIVE!!

  1. Sankar says:

    Great post, Jay. I think you can add the cost of designing, and running social media projects such as idea contests or survey, etc, and the prize money and other incentives.

  2. sankar says:

    Hi Jay, thank you for the encouraging words. Looking forward to staying in touch with you.

  3. very interesting read indeed breaks lots of myths 🙂

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