MAD Perspectives Blog

It's that time of year where we take stock of our successes and failures in the past year.  The goal is that success always outweigh failure.  BTW, failure is OK as it is often how we gain the insight required for great success.  It is also the time of year where we are finalizing our plans and commitments for the coming year. In many cases you've probably won agreement to engage (or continue engaging) in social media.  But, there is probably increasing pressure to define the return on your social media investment.

There are a zillion blogs defining the various metrics you can use to measure return.  Here are a few of them:

•      - socialmediaexaminer.com
•      - b2bbloggers.com
•      - social2b.com
•      - progressivemediaconcepts.com

Similar to other marketing efforts, there are a range of qualitative and quantitative metrics that can be measured.  In all cases, the metrics should be tied to goals which are tied to business objectives.  Nothing new here.  What's interesting to me is the lack of focus on the investment required to achieve those goals and capture defined metrics.  This is the I in ROI.

Social media is often perceived as "free".  However, this ignores real costs such as:

     - Staff - Your team, (e.g, marketing, customer support, management, etc.) must invest time to engage on social networks, write blogs, monitor customer feedback, etc.  As they say, time is money.

     - Technology - Yes, the leading social networks are free of individual use.  However, do you customize your Facebook/Twitter/LinkedIn pages, use a social media monitoring/analytics/measurement platform to capture conversations and measure influence, use a social media hub to simplify distribution of content across multiple social networks?  If so, these are investments that must be captured.

     - Creative - In order to make your brand stand out, it is often useful to customize your social network presence.  This can include specific images for Facebook, Twitter, LinkedIn and other outlets.  It can involve the creation of badges, infographics, slides, videos or other content specifically for social networks.

     - Agency - Large companies often outsource their social media efforts, content creation efforts to agencies.  These costs should be allocated accordingly.

Capturing a meaningful ROI requires attention to detail and an understanding of what it really takes to meet defined goals.  Altimeter Group has an excellent paper outlining a pragmatic path for analyzing social success. As always, strategy first, technology last - with measuring, listening, analyzing and responding always!

Align your social media strategy with your business objectives, integrate it with your marketing plan and figure out how your going to implement and pay for the strategy. Create a plan for social media success.  Figure out the plan to make sure others recognize the value it provides in achieve business goals.  And, don't forget the I in ROI, it's the key to earning the R!

What's your perspective?

As I work with clients to help them understand social media, the first question they ask is "What is it going to cost?".  This is a fair question as the economy slooooowly moves forward.  The question of ROI is increasing rearing its ugly head, yet social media has a more tangible ROI than much traditional marketing.  That said, let's focus on the core question.  What does social media cost?

There is no standard answer, although almost everyone will tell you that "it depends".  The cost is dependent on your goals for using social media.  Who is your audience and market?  What kind of information are you sharing, or more importantly, what information do they want?  Do you have in house resources who can dedicate time to your social media plan and tactics?  Or do you need to hire outside resources?  have you assessed your content needs?  Do you have the time and resource to adapt existing content?  Do you have a commitment to developing new content?  How many social media networks will you utilize?  How will you manage these networks?

I'm not trying to scare you off!  I'm just trying to help you be realistic about the cost.  The cost is intricately tied to taking the time to define a plan, which will help you understand your current capabilities while identifying gaps that will impact the success of you social media strategy.  The cost is tied to human resource.  They may be your headcount or those of your social media consultancy (or PR firm, since many of them are expanding their services to include social media).

However, you still want to know what others are spending!  My thanks to the Altimeter Group and their commitment to open research (this means its FREE!).  Their report, How Corporations Should Prioritize Social Business Budgets, contains great recommendations and insight based on interviews with social strategists.  here are a few highlights:


The budget is not as uniquely tied to company size as it is related to the maturity of the company's social media plan and structure.  As maturity increases, the company actively aligns its resources into a more structured model.  Altimeter recommends a hub and spoke model where companies become more proactive, less reactive, with guidance for all employee social media participants comes from the hub.


Companies start their social media efforts with a focus on their website.  This makes sense despite the ongoing argument that social media networks will replace the need for a website.  I passionately disagree with this position and feel that your company's website is the core element of your overall marketing strategy.  Your website can consolidate more volumes and types of content than any social network.  That said, you can increase web traffic and highlight events (e.g., conferences, product launches, whitepapers, webinars, blogs) and other very important information very effectively using social media.  You've invested in SEO, don't arbitrarily send your hard earned audience to social sites by simply integrating community platform (e.g., Facebook, Twitter, LinkedIn) badges on your homepage.  Consider how to bring your social community interaction to your website - where your audience can find the information they really need.



As expected, community platforms are the biggest investment.  These platforms (e.g., Facebook, Twitter, LinkedIn) are where customer interaction is taking place.  This is where the conversations are happening, so it is no surprise that the initial investment of time and money is focused in this area.  This focus reinforces the desire to understand what your customers are saying - and why.  With investments already made in brand monitoring, it is critical to own community platforms where customer needs can be addressed in real time.

There is a cost so social media.  There is also a cost to not participating in social media.  There is an expectation by your customers that you will be social.  You can determine what types of social media activity work best for your company and your brand.   Consider the questions posed earlier in this blog and think about how social media can enhance your interactions with your customers.  Isn't it worth the investment?

What's your perspective?