In a recent study conducted by Google, over 600 B2B marketing professionals were surveyed and were asked about their marketing strategy for 2011. From the resulting infographic "The 2011 B2B Marketing Guide":
The true cost of a social media campaign depends on the size and reach of the campaign itself.
Some factors to consider, from The Real Cost of Social Media infographic @ focus.com:
- Staff costs, like your marketer's salary
- Advertising, like Facebook Ads
- External fees
- Other, e.g. tracking tools, technical/creative costs
On the bright side, only half of the respondents of an eMarketers survey felt that "low cost" was a benefit of social media:
The following was once overheard at an advertising agency: ‘So this marketing manager tells me we should do a fanpage on Facebook. And he tells me not to ask for extra budget, because he knows that Facebook is free!’
Social media are, obviously, not free. Their development requires resources – real people spending real time and real money – for planning, creative insight and actual product management. These costs may be hidden costs, but they are costs nonetheless, and need to be calculated.
The excellent How Corporations Should Prioritize Social Business Budgets by Jeremiah Owyang and Charlene Li sees three major social business spending areas:
- Internal Soft Costs: Staff to Manage the program, Education and Training, and Research and Development.
- Customer-Facing Initiatives: Ad/Marketing Spend on social networks, Traditional Agencies (deploying social media), Boutique Agencies (specializing in social media), and Influencer/Blogger Programs.
- Technology Investments: Brand Monitoring, Community Platform, Custom Technology Development, Social CRM (SCRM), and Social Media Management Systems (SMMS).
Their seven key trends for 2011 are:
- All corporations will gear up on Staff to manage social business, yet investment in Training and Education will be low.
- Corporations will invest heavily in Ad and Marketing on social networks, though fail to truly engage or leverage the social graph.
- Advanced buyers will spend nearly 3X more on Boutique Agencies than Traditional Agencies.
- Nearly all buyers will invest in Brand Monitoring, but don’t expect the ROI problem to be solved.
- Community Platforms become a mainstay of Marketing and Support.
- Advanced corporations will invest in Custom Technology Development, including integration of social networks on the corporate website.
- To scale, more mature programs will invest in nascent systems, such as Social Media Management Systems (SMMS) and Social CRM (SCRM).
DragonSearch has a "
Social Networking Media ROI Calculator", based on the original one from the
Blog ROI piece in Groundswell, by Charlene Li and Josh Bernoff. This tool allows you to fiddle with the numbers until they make sense.
This doesn't mean you can save a lot of out-of-pocket money by going for social media instead of, say, tv budgets. You get a long way with passion and plain hard work. One of the premises in my upcoming book on social media for businesses is that innovation is the true ROI of social media.
If your company is serious about including the social dimension must be included in each department and embedded within the company culture, this means that way your executive level and their departments work must change. But the good news is: by doing so, companies are able to discover the real return on investment of social media: Innovation.
In an
excellent blog post Ogilvy's John Bell outlines the three stages of social media adoption within companies:
- Social Media Experiments - usually the first year or two of unconnected social media programs involving bloggers, video content distribution, cgm/ugc contests and other tactics.
- Adoption and Integration - in the following years, the value or success of social media is felt within and there is a push to do more and integrate it with more people and disciplines.
- Go 'Big' - after some experience and success following integration, brands can't help but want to "go big" either with a substantial facebook campaign or a more impactful integration (e.g. committing to 20 people in social customer care via Twitter and Live chat). usually these brands have sketched out a measurement model that reassures them the effort is smart business.
And depending on whether social media is an obligation (from your CEO or headquarters), a quest (to change your business) or the path to integration into every discipline, budget sizes differ.
In John Bell's Spend Matrix he sees budgets vary from 1% of the prototypical $10 million marcom budgets (experiments - obligation) to 17% ("go big" - well integrated").
Further reading:
According to social media monitoring service Alterian, acquiring new customers (30,1%) is the biggest motivation for companies to build a social media presence. In other words: sales objectives come first.
Second is awareness raising (26.5%), and using it as a communications channel for existing customers (24%). "Offer customer service" was the main social media objective for only 1.2% of marketers surveyed.
The research is based on U.S. respondents, who were only allowed to give one answer. So these results don't mean marketers don't consider customer service via social media important.
Publisher Colloquy and the Direct Marketer Association on the other hand just
released another U.S. survey. This one looked at budget spend according to social media objectives. In short:
- Social media as customer service channel: $88k
- Social media for brand awareness: $53k
- Social media for sales: $50k
King Fish Media, along with Hub Spot and Junta42, recently released a new study measuring marketers’ adoption and use of social media for their company’s marketing efforts.
- Social media strategy adoption and investment
- Sites and tactics used by marketers
- Strategic objectives of social media campaigns
- Content’s role in social media
- Social media ROI and measurement tools
According to this research, most companies currently have (72%) or will have (80%) a social media strategy
Investment in social media rises from a variety of sources:
- tied to a specific project/custom media program (35%)
- as an increase to the marketing budget (33%)
- funded by moving budget to mainstream media (21%)
The responsability for social media falls
- mainly on the marketing department (70%)
- management (23%)
- sales (3%)
- IT (2%)
