Many business people believe that social media marketing is "free." This is attributable to the fact that social media platforms, like Facebook and Twitter, cost little or nothing to participants. Additionally, smaller businesses can afford to use social media to expand their reach cost effectively. What larger businesses miss is that smaller cash-constrained firms are substituting their own personal time and creativity for other resources.
7 Social Media Marketing Expenses to Consider
Since social media marketing in some form is now part of most marketers' plans, it's critical to gauge its cost so that you can compare it to other options. Here are seven social media costs to consider including in your marketing budget:
Monitor the environment.
Sentiment tracking analytics. While many marketers can get by with the use of free tools like Google Alerts, Twitter Search, and Social Mention, these tools don't offer the depth of analysis that more expensive tracking provides by the likes of Radian6 and Cymfony.
Internal analysis. Since social media involves tracking lots of content activity and converting it into useful information, this work may increase the workload.
Implement a social media campaign.
Consultant(s). Find a consultant or an agency to help with social media strategy and development.
Social media platform fees. Some social media tools charge for business functionality, tools, and/or special implementations.
Creative costs. Social media projects may be done by your existing creative team. Alternatively, you can use your advertising agency or hire a specialized firm.
Ongoing content. Most social media marketing requires a combination of new content such as videos, photographs, articles, games, apps, and/or in other formats, as well as participation in the conversation.
Ongoing support. Provided either internally or externally, it's a good idea to hire a social media manager once you reach a certain scale.
Promote social media marketing. You can't assume that if you build it, they'll come. It's critical to advertise your efforts. Old Spice's high profile, viral campaign established their Old Spice spokesman in a Super Bowl commercial. Where and how will you promote your campaign?
Media budget. This is needed for third-party media both online and offline as well as owned media.
Advertising creation. Includes expenses related to developing and serving ads.
Post social media engagement. While social media marketing can be highly effective for expanding your reach, you still need to convert these prospects into buyers. What's necessary to coax them through your purchase process?
Targeted landing pages. To keep them engaged.
Search. Related to the terms used in your social media content and campaigns.
Internal marketing. Including e-mail and website.
Testing. To determine the most effective methods to convert traffic.
Social media campaign analysis. After your campaign, track results to your initial goals. Depending on your current analytics software and team, this work may be integrated into this existing function. For others, additional tracking and headcount will be needed.
Customer service. Regardless of your social media implementation, your customer service representatives will be involved.
New communications channels. They need to be able to respond to requests from new channels.
Increased contacts. With expanded media platforms, customers will use a variety of platforms to talk to representatives.
Additional headcount. More trained personnel may be needed to respond to prospects and clients in a timely way.
Technology support. At each step, your technology team should be in the loop to ensure that your internal systems can support your social media executions.
Supporting development. In some firms, internal resources may be used to develop implementations.
Increased bandwidth. To support incremental traffic during peak usage times. For example, if you've got a big event planned around your social media marketing, make sure that you've got extra bandwidth to handle it or your website or other systems may crash!
New supporting software installation. This includes related server capacity needs.
5 Social Media Marketing Metrics to Monitor
As with any marketing program, tracking your social media marketing results is important, although many marketers have a hard time tracking hard dollar returns from these efforts. Here's a starting point for measuring your program and related costs.
Revenue. Can you track sales back to your social media efforts? Special promotion codes and customized landing pages are useful for this. While you might not be able to attribute the entire sale to the social media campaign, was it a part of the effort? Many firms have trouble tracking sales to marketing beyond the last channel touched.
Earned media. Can you attribute incremental views or other actions to social media interactions? Can you show additional reach as a result of consumers talking about and sharing your social media content? Were you able to increase your marketing's efficiency?
Branding. Have consumer feelings towards your brand in terms of mentions, sentiment, and intent to purchase changed in a positive direction?
Customer loyalty. Has involvement in social media supported your fans and influencers? Has this resulted in increased sales? Has customer lifetime value improved?
Costs. For social media marketing efforts, it's important to track these expenses across your organization since they may not all flow into the marketing budget. Remember, some may be hidden since they involve expanded job loads on various departments without any increase in salary. In these cases, it's important to monitor employee feedback. In addition, it's a good idea to track changes in headcount, often known as FTEs.
For many marketers, the reality is that, if your customers and competitors are on social media platforms, you need to be there or your business will suffer. To do so effectively for your company, realistically assess your results by tracking costs and the related sales to determine where you should be investing.
Heidi Cohen is the President of Riverside Marketing Strategies, an interactive marketing consultancy. She has over 20 years' experience helping clients increase profitability by developing innovative marketing programs to acquire and retain customers based on solid analytics. Clients include New York Times Digital, AccuWeather.com, CheapTickets, and the UJA. Additionally, Riverside Marketing Strategies has worked with numerous other online content/media companies and e-tailers.
Prior to starting Riverside Marketing Strategies, Heidi held a number of senior-level marketing positions at The Economist, the Bookspan/Doubleday Direct division of Bertelsmann, and Citibank.