Do You Know What Your Social Media Marketing Really Costs?

  |  July 11, 2011   |  Comments

Five major social business expenses, plus a detailed break out of hidden and not-so-hidden costs.

In 2011, social media advertising is projected to be $3.08 billion or roughly 10 percent of the $31.3 billion total online advertising spend, according to eMarketer. As a marketer, your social media marketing expense doesn't stop there! You need additional resources beyond social media advertising. Research shows that as businesses use social media more, their social media marketing investment increases. Consider the results of a Brandon Hall Group-Covario survey, courtesy of eMarketer.


Closer examination of the major social business expenses shows the largest increases are 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 staff are involved, more supporting marketing is needed, and more technology support is required to ensure the firm's systems integrate with social media, especially for tracking customers and sales.


How Does a Marketer Develop a Realistic Social Media Marketing Budget?

To develop a realistic social media marketing budget, marketers must take a broader corporate perspective to understand what's truly involved and where the resources reside. Therefore, examine your social media as part of a larger corporate plan. An integrated approach is useful because other people's budgets are needed. Further, it's a good guess that there may not be any social media marketing tracking.

Here's how social media expenses break out across five budget categories:

1. Head count. Social media can be a manpower hog since it requires real-time response from real people. For businesses, this often translates to more than just a social media manager.

Staff involved in social media marketing and execution include the following. While some of these employees may not be dedicated to social media full time, they do need to be on top of relevant issues.

A. Social media specialists. These employees represent the firm on a variety of social media platforms.

B. Marketing/PR. 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.

C. Creative. 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.

D. Product. Depending on your offering, it may be important to have a product specialist who can interact with your customers and the public.

E. Technology. Includes resources to set up social media platforms and keep them going. Further, they ensure that social media platforms are integrated into established company systems and provide sufficient bandwidth.

F. Analysts. Examine the information collected including the brand monitoring and assess the company's position and progress.

G. Customer service. Due to the fact that social media creates another customer communication channel, involve customer service representatives who can communicate in written format.

H. Legal/compliance. With social media's ability to stir up a variety of issues, have dedicated legal resources who can provide answers quickly rather than wait weeks or months for an answer.

2. Content development. While it's optimal to have internal resources create your content, you may need additional head count and/or editorial support.

A. Editorial support. Develops an editorial calendar and provides guidance as to the type of social media content that's needed across the purchase process.

B. Content creation. If employees aren't able to handle content development, then outsource this function. You can use a combination of employee, customer, and freelance content creators.

C. Copy editing. Regardless of who creates your content, use professional copy editors to ensure your content's well-written and has a consistent voice.

3. Marketing support. This marketing helps your social media execution to achieve branding, traffic, and sales targets.

A. Social media branding. Depending on the platform, you may need additional creative and support to represent your brand effectively.

B. Advertising. To drive people to social media executions, options include traditional mass media, online advertising, social network advertising, and search.

C. Support marketing. This includes internal marketing such as the website, emailings, and offline promotion as well as landing pages and other internal media.

4. Technology. Technology is the glue that ensures that your firm's website and systems connect where appropriate with social media platforms.

A. Social media platforms. Some networks may require additional fees or technical support. Additionally, you may need to be integrated with a platform's tailored commerce system to ensure product delivery and related tracking.

B. Content management systems or blogging software. Depending on your business' social media execution, you may need specialized systems to manage your content.

C. Website integration. It's critical to ensure that social media participants can seamlessly reach the appropriate page of your website.

D. Systems integration. As with any technology project, getting the different pieces to work together can be challenging, especially with legacy systems.

E. Server support. You need to be able to handle traffic spikes when there's a promotion or event.

5. Analytics. If you don't track your social media marketing back to your goals, it's certain that your management team will think that social media has no ROI.

A. Brand monitoring. You must track what's being said about your company, your brands, your senior executives, and your competitors. To this end, have a crisis management plan ready in case you uncover early indicators of a problem.

B. Ongoing analysis. At a minimum, ensure that your current tracking and systems can accommodate your social media activity.

C. 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?

Happy marketing,

Heidi Cohen

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Heidi Cohen

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,, 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.

Her blog,, was nominated as a finalist for Top Social Media Blog of 2012 by Social Media Examiner.

Heidi is also a popular speaker on current industry topics.

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