A reader sent me this very interesting article on Social Media from Business Week: Debunking Six Social Media Myths by B.L. Ochman. Thanks Cheryl.
What interested me most is that this is one of the few articles I’ve seen where there’s at least an attempt to put a price tag on doing a Social Media Marketing campaign. I’m not going to focus too much on the nuts and bolts of $50K – $100K costs, except to say I believe that a) many small businesses are never going to spend that amount and can do a lower key customized campaign for a lot less and b) even large customers are going to need to justify their spend on a medium that isn’t completely proven as yet as far as bottom line benefits are concerned.
But those figures are based on campaigns for fortune 500 companies who probably wouldn’t dream of spending small bucks on anything and who have (or at least had) big budgets. And as B.L mentions, some spend more, some spend less.
Many company marketers are still struggling with metrics and making a business case for social media for their CEOs and CFOs. Social Media practitioners need to be able to help them in this area rather than focusing on Social Media tools and Social Media as a magic “cure-all.” Given the economy we are in people are going to have to do a lot more with a lot less and still get some quick wins. Agencies are going to have to get creative and start educating their clients – and not simply about price tags.
Strategy and ROI
The key point is, though that there is a cost to doing any social media marketing. And because it’s relatively easy to set up the various tools (blogs, twitter, forums, etc) it is often overlooked. By far the biggest cost will be on time and resources – yours or someone you pay. If you have done the strategic work up front you can minimize your outlay, but you can’t entirely eliminate it. Companies need to budget and then estimate what they can afford and the ROI. It costs nothing to set up on Twitter. It costs nothing to start a blog. But what’s your plan for maintaining and integrating your outcomes? If all your social media and other marketing and sales efforts result in multimillion $$ contracts, then who cares about the cost? It becomes an expense. You should be looking at the profits – your Return On Investment. The Holy Grail. And that should be calculated before you begin.
To sustain efforts – not simply setting up, but maintenance, staffing, outsourcing, other support and continuous improvement and building momentum, strategic review – to name just a few things, you could easily be looking at a few thousand dollars a year – even a month. If you do pay an expensive agency to run your campaign you must add that.
Put things into perspective: Remember Websites?
It can cost between $5,000 and $10,000+ to build a basic transactional website. Excluding maintenance.
There was time when people thought they could get websites for free. I recall clients asking for full blown websites and expecting to pay $2K. Worse, some providers would bend over backwards to try and deliver the impossible – at a loss of course.
Back to Social Media: you don’t have to do a huge campaign that costs thousands of dollars. Far from it. I believe many SMBs, unhampered by large corporate set ups are doing their own Social Media efforts to fit their budgets. And, as we are seeing, most large corps are hurting right now, and slashing budgets it’s smaller businesses who don’t have large budgets that people want to be targeting. But it is important to be realistic.
You may not get an instant splash and you may have to educate yourself – learn as you go along. Partner with others and keep building relationships. Ddepending on what you wish to do you can scale down, plan a realistic time scale and measure your outcomes and increment, using the right tools for you, not simply the hot tool of the moment. You can take it slowly build buzz, and monitor outcomes, you can build Twitter followers and Facebook friends. You can build a blog community If you are an SMB (Small to Medium Business) embracing the opportunities of Social Media you have an advantage over huge FF500s. Just remember it takes time.
It’s not about tools
The constant focus on tools rather than strategy/planning is as unfortunate as the constant carping by some about who’s an expert and who isn’t. It seems to be a recurring theme in the Social Media world and frankly it’s getting old. Who cares? You have expertise? Then get out there learn and deliver tangible benefits to your clients to help them succeed. No-one knows it all, so pull in resources and partner up. Everybody wins. Focus on the right strategy, clear goals, excellent execution and constant measurement and monitoring. Find the clients who need your help (and in this environment the opportunities abound). Clients and practitioners need to ask the right questions and if something is out of your league, say so.
I’ve more to say on the other Social Media misconceptions, some of which I agree with, others not as much. Stay tuned.
Thoughts? Are you doing your Social Media campaigns for little or nothing? Or are you spending 10K, 20K, 50K or more? Are you happy with your outcomes? Please share your thoughts by leaving a comment.
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Hi Nicky – thanks for pointing out that article! As it pertains to small business, I am not quite sure I agree with one thing that Mr. Ochman claims.
I didn’t know the first thing…nothing, zip, nada when I got started. And I do everything myself. Total cost = $0.00 (but it does take time, which if we want to get technical certainly has value).
mark_hayward’s last blog post..10 Tips for Blogging Your Way to Small Business Success
I’m the quintessential bootstrapper on this topic. Started on my own. I’ve spent less than a couple hundred dollars and its all me, for better or worse. I could spend $50K easily for access to more research, creative, and web resources, if not more. At the end of the day, it’s me and my brand so I should be right in there doing it. The rest is fluff and will get in the way. IMHO, if larger companies want to do this and can’t figure out the ROI, bootstrap in the organization with a well thought out pilot. Take a new marketing specialist and let them run with it: use out of the box tools/apps, writing, leveraging existing assets, and connecting. Just weave it into an existing campaign for consistency and management. Test with those that don’t have it, measure the ROI.
Ah, but to have a big marketing budget again!
@Mark – one of the wonderful thing about Social Media Marketing, Networking and the whole toolset is that, as long as you are willing to learn and have patience and are realistic you can do it by yourself. If it pays to outsource things it can be economical. But there is a personal aspect to Social Media that requires the person not a proxy.
You don’t need a huge expensive agency, fancy programmers and price tag either. I think that implying that no one can do it for others unless they are “experts” leaves out the smaller businesses who have done just that – unhampered by the corporate set up. I know though that there are huge Social Media campaigns that do carry that price tag and companies that will readily pay it.
@Michele – I totally agree about bootstrapping and heartily suggest companies do a pilot. Right now I outsource major blog upgrades and have done for a couple of years now… I simply don’t have the time to ensure I don’t bork my two blogs. I actually think outsourcing tasks that take away from the value producing ones is a good idea and I plan to outsource things like adminstrative tasks that I simply dislike doing because it frees me to do what I enjoy.
Then again, large companies are used to marketing budgets carved out at budget time for advertising … so perhaps it’s a case of “have money, must spend it.” The biggest overhead will be people – both external consultants and internal resources. Smaller companies don’t have that kind of budget to spend on marketing – agency or not, so they are going to DIY it, partner or pay something a lot smaller. Interestingly, a Warrillow report I read recently said that if large companies are your target market, every one of them is hurting in right now and the smaller businesses who need strategic help are the ones to talk to. And as marketing budgets are being slashed, some form of creative DIY and bootstrapping may be the only option.
Thank you both for commenting.
Late to the party…again! Hey Nicky. Thanks for giving us your take on Ochman’s article. I knew you’d have something sassy to say.
@Cheryl
Nicky – thanks for taking the time to write about my Businessweek piece on social media myths.
Like I said, companies spend more and companies spend less. Small businesses, like my own new venture, Pawfun.com have to roll up their sleeves and do the work themselves. But if you hire an expert, with a proven track record, a professional designer, a programmer, and the other experts needed to produce a national campaign of the type and scope I was discussing in the article, $50 – $100K is simply not a lot of money.
B.L. Ochman’s last blog post..Forrester Report: Social Media Playtime Is Over