I had a long discussion this week with an analyst trying to figure out how companies should be budgeting for their social media marketing efforts.
It’s always frustrating trying to answer a question like this because of course there is no cookie-cutter answer. A marketing strategy — and the appropriate budget — is going to be determined by your organization’s goals and the competitive structure of your industry.
However, to optimize the opportunities behind a social media effort, I do believe organizations need to commit to budgeting in a consistent and patient way. Here’s a traditional view of funding an advertising or promotional program:
Of course this is a very simplified view, but in a traditional media spend, you might run an ad campaign and, after some lag, awareness increases and then abruptly drops when the ad campaign spending is over. Of course this could be repeated over and over again and the persisting level of awareness would eventually increase because of the long-term commitment to advertising.
When approaching social media or content marketing, the commitment should be for the long haul. It’s unlikely that you’re going to strike lightning with your first few blog posts or Facebook updates. The idea is to drive relationships through consistent small engagements that eventually lead to awareness and bigger interactions, like a sale.
The idea behind this graph (again, very simplified) is that there is a start-up cost to build a social media competency but that it should become more efficient over time. Your costs will be level or perhaps even go down as you get into a groove. At the same time, there is no immediate affect on awareness like you might get with an aggressive advertising campaign. Unless you are already a well-established brand, it takes time to build an audience that trusts you and looks to you for meaningful content and engagement.
It’s likely that your company will invest in both paid and earned media and that the two will be integrated in some way. In that case, the expense of the integration and the effect on awareness would be blended:
So that is a basic framework to consider if you’re in the middle of your annual budgeting process. Again, there is no one-size-fits-all strategy or budget that you can apply uniformly across every company but I hope some of these fundamental ideas will help point you in the right direction.
We want to hear from you! How do these basic strategies differ in your organization?