Are you spending the right amount on your social media marketing budget?
Your Starting Point
Mashable presents a good rational for how businesses should prioritize their social media budgets based on a report by Altimeter. This in part looks at the internal resourcing of social media and how it is important to take into consideration the longer term goals of developing a social enterprise.
If you are starting out then focus you need to identify your customers, listen to what they are saying, benchmark your business/brand, develop a strategy and then resource appropriately. As a business develops its capabilities then starting to integrate how social media is used becomes more important e.g. customer service, recruiting…moving beyond the use of marketing.
How you determine your social media strategy will depend on your business model, market and stage of maturity. But how do you determine how much to allocate to social media?
Well your level of investment will depend upon how quickly you want to develop your capabilities. Social media takes time to develop traction with customers, train staff, develop and refine your monitoring, develop your community…however by blending paid media, earned and owned you can be creative and deliver results. Integrating social media into campaigns provides valuable traffic and engagement with your social media channels (see the Doritos example further down).
Many large brands have successfully implemented social media projects and provide some useful case studies both for BtoB (some examples using Facebook) and BtoC businesses. Businesses starting out need to learn and explore what is being done well and leverage this in their planning. Another factor that will determine budget is how your competitors are using social media – are you behind and need to invest more to catch up or are you at the same stage. Here are 4 more points worth considering and further down you will see the reports and trends in the market.
If the whole objective is to promote or launch a product or service, we believe more of your budget should be focused on Pay Per Click campaigns on Facebook and Google.
Of course integrating offline and online will be important: e.g. include QR codes in your print to blend the offline with online. Campaigns should focus on building a community around your brand. This enables each subsequent campaign to have a great start point and also helps build a longer ‘tribe’ that you interact with.
The big question here is are you currently measuring your marketing effectively and do you know what is working and what is not. Have you heard the saying:
50% of my marketing is working – I just don’t know which 50%
The golden rule here is test measure and track. Online marketing methods are often easier to track and measure than print or direct mail and ads in printed media e.g. newspapers and magazines. If you know what isn’t working well then cut it and use this to invest in social media.
We often speak to clients who are looking to build their social media presence but forget to use their traditional routes to help them. If you have an email list and actively use it then inviting people to your Facebook page or brand community can be an ideal way to get going. However, don’t invite people into a house with everything still in boxes. Prepare your community home with content, ask some people in early to ‘muddy’ the pages and then invite your customers. Build the social media into all other aspects of your current marketing.
If you haven’t already established a social media presence then hoping to gain a big result is unrealistic. Social media takes time to setup and cultivate relationships. Focus on developing a good content strategy on a core set of channels YouTube, Twitter, Facebook and then map out your content strategy to these channels e.g. video on YouTube and Facebook page.
The average cost of a TV ad for a 30 second spot is around $300,000 just to produce it and excludes the cost of media costs to run it. With this in mind, you may want to produce one less spot for a campaign, and re-allocate these funds towards a very decent social media campaign with a longer life-span. You can use buzz marketing / video marketing for early engagement and to build traffic but remember a community takes time to build and needs a central home e.g. Facebook page or brand community platform.
So How Much
If you review the reports below the average spend is about 10% of marketing invested in social media (lowest is 3.5% and highest 21%) but this doesn’t take into account all costs. Review the trends though to get an idea of how that is changing. This also doesn’t take into account then how social media can be used for customer service, recruitment…so additional funding may be used from these areas if businesses are seeking to integrate social technology, processes, roles…across the business. This would result in a more efficient use of any investment.
Now is the time to start to scale up social media spend and integrate it offline and online – it is the time to invest in the future.
An example of mainstream use
A simple example of this is a recent TV ad for Doritos that only points people to their Facebook page where they have a game for people to play. Gamification in itself is becoming a popular but relatively new way to engage customers and ensure extends the experience with the brand, increasing exposure, developing word of mouth and driving sales.
Social media has been the poor relative of the marketing mix often having to get off the ground with minimal funding and half heartedly backed by skeptical senior management teams. Yet, despite this modest background social media is finally gaining ground, support and actually starting to get dedicated finance and resources. This shift could see a businesses integrate social internally as well as for their marketing.
The Money is Moving
Despite all the hype we can see that this is now being translated into investments in online marketing. The line between areas of online, digital and social are blurring as budgets as we move to customer experiences in the digital space and integrate the technologies.
An article by Marketingprofs reports on a survey of 421 top marketers conducted by Duke University and the American Marketing Association, shows that social media spend is growing. What is interesting though is the wide variation in spend between BtoB and BtoC.
Flowtown has a great infographic demonstrating the meteoric rise in advertising on social networks as brands move away from traditional media. So what is fueling this growth. Well it isn’t expanding marketing budgets; in this recessionary climate marketers are moving money from traditional media e.g. print.
eMarketer reports that by 2012, social media ad revenue should account for 10.2% of the total $79 billion ad revenue in 2012. The money follows the eyes – people are spending more time online and most of that is on social networks so advertising is shifting to online.
- In another report by BIA/Kelsey, social media advertising revenues will grow at a compound annual rate of 31.6 percent through 2015, reaching a total of $8.3 billion, compared with $2.1 billion in 2010.
- The final figure and report to look out is a survey from Econsultancy and SAS which takes a look at digital spending trends and social media as one part of that.
- These reports cover a variety of industries and size of business so these are averages.
- Some industries will be investing more where they have established themselves in the use of social media and are starting to increasing leverage the use of social media.
- Social media is a key part of the marketing mix don’t think of it in isolation it is just another part of digital
- Businesses need to benchmark themselves relative to their target market and competitors so they don’t lose out to competition online
- Clearly how the strategy you adopt for social media will affect its purpose within the business and how it is used. Here there are wide differences that often reflect the success rates and determine success and failure.
- These figures don’t cover the hidden costs and investment needed in correctly resourcing social media
- As mentioned in so many blogs content is king and so content strategy, development and production is often seriously underestimated by businesses when they begin with social media
- Lastly community management is critical but often forgotten or hidden cost