Social media marketing is not cheaper

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Much has been made of 2009 being a year of frugality for marketing departments and social media becoming the new darling for budget constrained companies. That said, I want to throw a contrary viewpoint out there: social media marketing is not necessarily cheaper than other forms of marketing.

What social media marketing achieves is a trade of time for cash. If you’re capital constrained, you’re going to be trading big cash spend for big time spend. If you’re okay with that, if you have the personnel resources to spare, then social media marketing is going to work well for you.

Social media requires a hefty investment of time, and even in the best of times has a squishy ROI. You can’t load up a social media marketing plan like you can an email marketing plan and say that if we post this item to Facebook or we Twitter this web page, it will result in 354 clicks to our product page and 14 purchases. You can do that with reasonable confidence with email marketing – you know what your open rates are, you know what your clicks are, and you know the revenue behind a click. There is no such formula or set of statistics for social media.

One of the catches in tough economic times is a stronger demand for ROI – making sure scarce resources are well-allocated. How do you calculate social media’s ROI?

We do know the market value of some items in social media; an inbound link from a certain class of web site carries a market value (in terms of what it’d cost to buy that link) so if you can get one for free, then that inbound link’s value can be directly attributed to social media’s ROI if the link couldn’t be obtained any other way. I know that if Chris Brogan twitters this blog post, there’s an audience of 26,566 that will briefly see it in their Twitterstream; on a CPM basis, I know that I would have to pay a certain amount for access to the same size audience. If he went a step further and asked you to link to it from your web site, then I’d have additional hard ROI I could build into my numbers.

Even with that, the ROI is tough to crunch. I wouldn’t necessarily make a business decision for social media based on those numbers, would you?

If you’re looking to get impact out of social media marketing, take a hard look at what you’re doing right now inside your company using more expensive channels and see where social media marketing might make a difference. For example, in my own work at the Student Loan Network, we’re always looking for great partners to work with; having a prominent LinkedIn network (cspenn at gmail dot com, all requests accepted!) is a great, low-cost way to find new partners to work with. Twitter has transformed from a big chat room to an honest-to-goodness source of lead generation and link building. Blogging is pure SEO food, podcasting has built the name of the company in the industry far beyond what should rationally be possible without massive ad spend, and the connections made through events like PodCamp, Podcasters Across Borders, and other conferences have driven incredible business connections.

I would argue that social media marketing isn’t cheaper per se. What I would argue is that it opens new, different doors and gives you opportunities you might not otherwise be able to generate without far more cash resources than you have access to, and therein lies its true value.

If you’re in marketing, how are you presenting why social media marketing is right for your company? Comment below! (comments are moderated but will be approved pretty fast)

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Comments

19 responses to “Social media marketing is not cheaper”

December 16, 2008

Sarah

A social media marketing resource that every small business and freelancer should know about is Brownbook.net, http://www.brownbook.net/ an online business directory built based on a wiki so that anyone can add, edit and review businesses for free. Brownbook offers businesses a selection of no cost and low cost tools to customize their listings including; adding videos, photos, widgets, drag and drop functionality, highlighting, bolding, and more for $22 per year.
http://blog.brownbook.net/2008/11/27/how-to-cus…

Reply
December 16, 2008

Guillaume

I completely agree with you, social media is not cheaper just because it is time consuming and you have to hire people to do it. 2009 will be interesting because everything (how users interact, how marketers use it, etc) will become a bit more mature and so I hope we will overcome the hype moment.

Reply
December 16, 2008

Michelle Sullivan

Bang on – it's time that, as an industry (marketing, PR) we stop underselling social media as the poor man's broadcasting tool and start giving it the respect it deserves. It's the best way to be sure clients understand the level of engagement that is required to build dialogue and trust. Social media is one tool — a really interesting tool, granted — but only one tool in the communications strategy toolbox. It doesn't replace traditional PR or marketing, but it does a great job of supplementing it, when the conditions are right.

I would nuance what you've said here, however: “Blogging is pure SEO food.” Beyond merely being a great way to move up the Google ranks, blogging is a relationship and community builder that, when done right, lets you pull the curtain back and get a better look at the Great Oz (or at the very least, your neighbour's knitting circle). I'd argue blogging helps build bridges and improve understanding, but then I might also start arguing that it is the solution for World Peace and, frankly, it's too early in the morning for me to start defending that point of view. 😉

Cheers
Michelle

Reply
December 16, 2008

Brent

I totally agree, our agency is getting more and more requests for Social Media Campaigns. Time and time again I hear the same comments from clients, “our budget has been cut so we want to move into social media because it's cheaper” or the comment that really scares me is “we have limited budget and need to make a big splash, come up with something viral on Facebook that will get a ton of sales, you know like (Insert name of famous viral campaign here) did”

Social media can be extremely effective, but it's not cheap, it's a huge time commitment, and their is no guarantee. At least one a week I have to explain to someone that just because you post a video on YouTube it doesn't mean you will get a million views in a day if ever.

I'm finding that a big part of social media campaigns is managing client expectations, and getting clients to commit the resources necessary for a successful campaign.

Reply
December 16, 2008

Whit

In an interview I did recently, the expert said “Sometimes, quality of life is important, beyond simple ROI” and I think we have to keep this in mind with social media as well- there are metrics, but building networks and communities is a long term strategy, like building realtionships on the golf course- not always about closing the sale, but more about getting to know each other and developing business.

Reply
December 16, 2008

Sarah

A social media marketing resource that every small business and freelancer should know about is Brownbook.net, http://www.brownbook.net/ an online business directory built based on a wiki so that anyone can add, edit and review businesses for free. Brownbook offers businesses a selection of no cost and low cost tools to customize their listings including; adding videos, photos, widgets, drag and drop functionality, highlighting, bolding, and more for $22 per year.
http://blog.brownbook.net/2008/11/27/how-to-customize-your-page-on-brownbook/

Reply
December 16, 2008

Guillaume

I completely agree with you, social media is not cheaper just because it is time consuming and you have to hire people to do it. 2009 will be interesting because everything (how users interact, how marketers use it, etc) will become a bit more mature and so I hope we will overcome the hype moment.

Reply
December 16, 2008

Michelle Sullivan

Bang on – it’s time that, as an industry (marketing, PR) we stop underselling social media as the poor man’s broadcasting tool and start giving it the respect it deserves. It’s the best way to be sure clients understand the level of engagement that is required to build dialogue and trust. Social media is one tool — a really interesting tool, granted — but only one tool in the communications strategy toolbox. It doesn’t replace traditional PR or marketing, but it does a great job of supplementing it, when the conditions are right.

I would nuance what you’ve said here, however: “Blogging is pure SEO food.” Beyond merely being a great way to move up the Google ranks, blogging is a relationship and community builder that, when done right, lets you pull the curtain back and get a better look at the Great Oz (or at the very least, your neighbour’s knitting circle). I’d argue blogging helps build bridges and improve understanding, but then I might also start arguing that it is the solution for World Peace and, frankly, it’s too early in the morning for me to start defending that point of view. 😉

Cheers
Michelle

Reply
December 16, 2008

Brent

I totally agree, our agency is getting more and more requests for Social Media Campaigns. Time and time again I hear the same comments from clients, “our budget has been cut so we want to move into social media because it's cheaper” or the comment that really scares me is “we have limited budget and need to make a big splash, come up with something viral on Facebook that will get a ton of sales, you know like (Insert name of famous viral campaign here) did”

Social media can be extremely effective, but it's not cheap, it's a huge time commitment, and their is no guarantee. At least one a week I have to explain to someone that just because you post a video on YouTube it doesn't mean you will get a million views in a day if ever.

I'm finding that a big part of social media campaigns is managing client expectations, and getting clients to commit the resources necessary for a successful campaign.

Reply
December 16, 2008

Whit

In an interview I did recently, the expert said “Sometimes, quality of life is important, beyond simple ROI” and I think we have to keep this in mind with social media as well- there are metrics, but building networks and communities is a long term strategy, like building realtionships on the golf course- not always about closing the sale, but more about getting to know each other and developing business.

Reply
December 17, 2008

Friend Adder Elite

thanks for your thought provoking article, for me social media marketing isn’t a bad strategy, despite of paying someone to work for you, its still a much more convenient way of marketing..

Reply
December 21, 2008

Robert_Worstell

Of course, if you aren't having to pay for expensive ads in print, or PPC, then social media suddenly become remarkably cheaper. Paying someone at work to monitor twitter feeds suddenly becomes much cheaper CRM. Having someone moderate your company blog posts is still cheaper.

Sure, adding on Social Media promotion on top of your already budgeted advertising is expensive. But it's also more expensive to keep the ads and let your trained and grooved in employees go…

We are in the middle of a paradigm shift, as traditional marketing values return (honesty, trust, value). Broadcast marketing is all but dead. The cost per lead is continuing to rise for conventional advertising, but is able to be leveraged through social media, since old posts and articles are around on the Internet search results for years (for free), while ads disappear with the last payment. So I'd say it's still more expensive to keep doing things the “old” way rather than shifting to “new” social media – even though it means talking directly to your customers.

Reply
December 21, 2008

Robert_Worstell

Of course, if you aren’t having to pay for expensive ads in print, or PPC, then social media suddenly become remarkably cheaper. Paying someone at work to monitor twitter feeds suddenly becomes much cheaper CRM. Having someone moderate your company blog posts is still cheaper.

Sure, adding on Social Media promotion on top of your already budgeted advertising is expensive. But it’s also more expensive to keep the ads and let your trained and grooved in employees go…

We are in the middle of a paradigm shift, as traditional marketing values return (honesty, trust, value). Broadcast marketing is all but dead. The cost per lead is continuing to rise for conventional advertising, but is able to be leveraged through social media, since old posts and articles are around on the Internet search results for years (for free), while ads disappear with the last payment. So I’d say it’s still more expensive to keep doing things the “old” way rather than shifting to “new” social media – even though it means talking directly to your customers.

Reply
December 22, 2008

Andrew MacNeill

But is it easier to get started? If a business has lots of internal discussion but no external discussion, isn't that half the battle?

I agree 100% that SMM isn't “free” – but there's real value in letting some of those internal discussions out into the open. They may create that initial snowball effect required to make SMM part of the actual business plan.

While many hear may jump up and down and talk about SMM is a required part of business, there are many industries or executives that are slow to recognize it. It's very easy to say “and that's why they'll fail” but the reality is they don't have to and it doesn't have to take a huge business shift to support it.

This post is great for talking about the value of a simple link – the real challenge is getting those unconvinced industries to recognize it.

Reply
December 22, 2008

Andrew MacNeill

But is it easier to get started? If a business has lots of internal discussion but no external discussion, isn’t that half the battle?

I agree 100% that SMM isn’t “free” – but there’s real value in letting some of those internal discussions out into the open. They may create that initial snowball effect required to make SMM part of the actual business plan.

While many hear may jump up and down and talk about SMM is a required part of business, there are many industries or executives that are slow to recognize it. It’s very easy to say “and that’s why they’ll fail” but the reality is they don’t have to and it doesn’t have to take a huge business shift to support it.

This post is great for talking about the value of a simple link – the real challenge is getting those unconvinced industries to recognize it.

Reply
December 28, 2008

Paul

Great post. I have been trying to explain to my old school that I am offering SEO advice to why they shouldn't go for social media marketing (because they can't afford it). Hopefully seeing the same info coming from someone else will give a better understanding that SMO is something you really need to undertake on an ongoing or long-term basis.

Reply
December 28, 2008

Paul

Great post. I have been trying to explain to my old school that I am offering SEO advice to why they shouldn't go for social media marketing (because they can't afford it). Hopefully seeing the same info coming from someone else will give a better understanding that SMO is something you really need to undertake on an ongoing or long-term basis.

Reply
December 28, 2008

Paul

Great post. I have been trying to explain to my old school that I am offering SEO advice to why they shouldn't go for social media marketing (because they can't afford it). Hopefully seeing the same info coming from someone else will give a better understanding that SMO is something you really need to undertake on an ongoing or long-term basis.

Reply
1. January 1, 2009
  
  Johny
  
  Maybe they really want an undertake or something
  
  Reply