The return on investment for those using social media for marketing remains stubbornly elusive. Social Media Examiner's "2013 Social Media Marketing Industry Report (PDF)" revealed that 87% of marketers want to know how to measure social's return, and that has been a consistently pressing theme for three years in a row. Still, large numbers of businesses and marketers continue investing in the medium. For example, STRATA, a leading media buying-and-selling (transaction) software provider, found last fall that only 8% of surveyed marketers were not using social media.
So if companies are going to continue investing in social media, what can they do to equate their efforts with positive returns? Experts agree the first part of the answer lies with planning.
Stepping back could be the best first step
According to Jonathan Crossfield, storyteller, marketer, and social media consultant, there's a lot of snake oil about social media marketing -- particularly aimed at small businesses. That, he says, has led a lot of people to adopt social media for entirely the wrong reasons, or with totally unrealistic expectations.
"Social media is a tool," said Crossfield. "You should never decide you need a Facebook page and then start thinking how you're going to make it work. That's like buying a shovel and then wondering where you should dig a hole. So much time (and thereby expense) is wasted by just not having a clear plan for what you want to achieve in social media and how that connects to identifiable and measurable business goals with an ultimate impact on the bottom line."
He says to consider who are you trying to reach and how they use the network. What content types or message do you want to distribute? Is a particular network the best way to reach your audience, or are there more effective channels, such as email marketing or a different network? What action do you want people to take? It has to be more than just "liking" your Facebook page because he says, that's not a business goal.
Specify the outcomes
The Garden Media Group comprehensively points out that setting goals and knowing how you will measure success should be part of your social media plan. But success looks different for businesses in different sectors, and even for individual businesses within the same sectors. It's typical for many B2B companies to want to increase traffic to their websites, and they look to social media as one way to accomplish that. For others, they may want more specific outcomes, such as more traffic to their blogs. Other desired results might include:
- increasing loyalty among readers or shoppers;
- boosting page views per visit, click throughs, subscriptions, time on site, or conversions;
- building the brand;
- creating a new avenue for transactions;
- improving customer service.
Knowing the scope of your social media efforts is just the first step in getting to the costs.
Factor in the costs
Econsultancy and Column Five Media each break out the costs of social media into four broad categories. Within each of those there can be phantom costs and to uncover them you have to visualize the entire social media operation from beginning to end.
- Staff: Hidden items here could be the time to train, and time lost while training takes place. Before producing any content, you need to plan it so you can get the most mileage from it, and then you need to schedule it. If some content such as podcasts or webinars require equipment and other tools you don't already have, then those items become new costs. Another often overlooked cost is the planning that goes into creating the plan, and the time spent doing research and analysis of both your intended audiences and the campaign once it gets underway.
- External fees: These include items such as outsourced portions and management tool costs. Here there are ample opportunities for costs to mount up unexpectedly if you don't have comprehensive contracts with vendors that delineate the tasks and the amount to be paid for each. It's also not uncommon for tools you might use for running a campaign and tracking results to have fees beyond the basics, such as fees for anything more than the most basic reporting.
- Advertising: This can be items such as targeted platform ads, email campaigns, and adding buttons to your other web presences. The hidden costs can include ad design and development, which on the surface might seem like an inexpensive project, but when you begin matching it to existing presences and branding, costs can rise.
- Other costs: Very often these are items that show up once the campaign is in operation. For example, the cost of cash to ramp up social media operations when campaigns are successful, new ideas for loyalty efforts, and expansions into other social media platforms.
Consider the cost of time
Crossfield also emphasizes factoring in the time needed for learning how to get the most from the tools you use, such as Radian6 or HootSuite. He says that in his experience the full value of these management and analytics tools are widely under-realized and that reduces the benefits and efficiencies they can bring to social media efforts.
Even if the time is your own, where you're not paying anyone else or outsourcing, Crossfield adds that's still a business expense because it's time not spent on your core business productivity. And while some people might simply move the work home to make it free from a business perspective, he asks them to consider what value they are placing on family time. Time isn't free, he emphasizes, even when it's your own. But there are a few other places where costs might not be apparent initially.
"For most businesses, tracking social media costs tends to be elusive," Heidi Cohen, president Riverside Marketing Strategies and chief content officer at HeidiCohen.com. "This is attributable to the fact that many companies don't understand what to measure because many of these social media expenses are hidden. Further, here are three costs that organizations often overlook:"
1. Content must be adapted to different social media platforms. One size doesn't fit all on social media. You must adapt your content and interactions while retaining your 360° brand to make sense in the context of the specific social media venue. This requires tailoring your content and interactions, a cost that's often overlooked.
2. Social media is difficult to scale. Social media interactions are often one-off conversations. They require targeted answers just as a person asking a question of your sales or customer service department.
3. Social media must be integrated with the rest of your marketing and business interactions. Social media doesn't exist in a silo. It must be incorporated into your other marketing across owned, third party, and social media platforms.
How about you? Where have you discovered hidden costs? Let us know in the discussion.
Duane Craig reports and writes on technology, construction, finance, food, and agriculture. He's been published in trade print magazines, the Washington Post, and widely on the web.