By B.L. Ochman
OK! Time’s up!While you’re contemplating how to “test the waters” in social media marketing, your competitors are already there, or planning to be, and your customers have been there for quite a while.
“Everybody’s talking about how great social media is for marketing, but nobody’s talking about what it costs,” cry the CMOs. Verily they said: “Tell us the bottom line.”
OK, let’s tear down the wall – let’s talk about money.
The budget for an effective social media marketing campaign begins at $50K for a two to three-month period. I’m sure companies have spent less, and I know they’ve spent more.
I have created effective campaigns with as little as $50K, and even better ones with budgets of $500K for three months. :>)
As a rule, a $50K budget can cover the creation of a simple multi-media micro-site which becomes the center of an online community; perhaps some widgets to help distribute the content, and the formation of a Facebook and/or Flickr, Jaiku, Twitter or other networking group to enhance the community aspect of the campaign. Complex functions add to programming and design costs.
A high-yield, highly-targeted blog advertising campaign to kick off and support the program will cost an additional $25 – 100K a month. Google AdWords, email support, co-registration and other tools that drive traffic also would be additional costs.
Look at it this way: let’s say your average customer makes a purchase from you three or four times a year. Now you create a micro-site that contains truly engaging content, and not just heavy-handed sales messages. You make the content available through a variety of social media tools.
You invite and respond to comments – positive and negative. You give people a variety of ways to create content, and contribute photos, videos, tips and news to your site. You let them rate the content on the site and respond to suggestions.
Customers now have a reason to engage with your content several times a week, or even daily. Pretty soon, they start to tell their friends about your interesting and useful content. And soon you can watch this involvement reflected in increased sales referred through your social media marketing.
You can measure results through a variety of metrics, including referral drill downs in your site stats; mentions on blogs and in media; comments on the content; real-time blog advertising results, and clickthroughs to your company website.
So tell me, what’s so scary about that?
Copyright B.L. Ochman, all rights reserved
Can’t really say if it is scary or not, B.L. Are you using the $50K figure for any campaign? Local? Regional? National? International?
Since you advocate using advertising ($25 Adwords), and make it sound like an imperative, isn’t the lowest initial upfront cost expectation going to be $75K?
I hope you will broaden your descriptions, further develop the type of scope this campaign would cover (geographically, product/service type, etc.) in future posts.
Very interesting information. Enjoying reading it.
FrogLoop provides as ROI Calculator for Social marketing
Social media marketing is becoming a powerful tool. People are still wary of it as it is new but I think it is definitely going to become a lot more prevalent as people understand how to make it work more and more effectively.
I want that gap card now
Admirable to put an explict number down and show companies that it needn’t cost the earth in relative terms. It could be less than 50K if there is in-house resource to help, or more to develop a strategy to integrate into existing plans.
Robert – The $25-$100K a month I recommend is for BLOG advertising, *not* Google AdWords, etc., which would require additional budget.
Sometimes, other tools are going to be more effective than blog advertising. There are no formulas here. Instead, I am trying to give ranges.
My team and I have done sites, like Clutter Control Freak, that gained momentum without blog advertising. However, CCF’s reach would be far greater, and would expand much more quickly, if blog advertising were employed.
Each situation is different and what we recommend to clients has to do with what clients want to achieve, their cost of acquisition, cost per sale, budget, and other factors.
Because these campaigns are online, they basically are international in scope. However, American companies often elect to restrict entries to the U.S. – something I think is a mistake.
Zak – thanks for pointing out Frog Loop – which is for non-profits only, but an interesting resource indeed.
Jasbinder – I wonder if, by in-house resource, you mean design capabilities? We work with our own team for the design of social media campaigns because there is a different and rather specialized skill-set involved.
Everything my company does is designed to integrate into and enhance our clients’ existing plans.
The goal in some cases is to turn the campaign over to the in-house people eventually.
I hope this clarifies some points, and I welcome additional questions.
Enjoying reading it.
Very factual figure.
The problem is how to come up with an amount to be able to fund one’s social media campaign and how effective can that really be?
I do multiple social media marketing for clients, and it doesn’t cost a penny. They already paid for a web site design, construction, and hosting. So I toss the socnet marketng in for free, to drive traffic to their websites.
Twittering links to their blog posts, sites, etc. and setting up profiles on Spock and VSEs and other people search engines.
I’m a clever lad with insane ideas. heh
Zero Budget Marketing…it works for me.
Vaspers – “They already paid for a web site design, construction, and hosting.” — that certainly wasn’t free.
The campaigns I am discussing here are contests like the one I did for Budget Car Rental that got a million uniques and 2,000 entries in 4 weeks; blog-based community sites like Clutter Control Freak, which had 1,000 uniques a day after only 4 weeks, and whose widgets on other blogs drive 50% of the traffic.
I’m not talking about twittering a post here and writing on somebody’s wall in facebook there. these are campaigns that are fully integrated with the company’s branding and other marketing efforts.
Nice to be flip my friend, but you’re talking apples and oranges. I still love you though. :>)
I understand your scolding of my onery comment.
But I keep hearing this “What’s the ROI?” crap from clueless corporate wankers who use the ROI whining as an excuse to be sluggish about the new social media.
Your examples are great, and you are a social media genius. I encourge companies to turn to you for online marketing, and you have taught me much.
An intense branding / social media campaign can incur some costs, and deep pocket corporations should spend lavishly on such projects, for maximum effect and speedy results.
I refer to more organic, slow but sure, social media marketing, almost all of which are free tools.
In these cases, it’s more ROT (Return On Time) than ROI.
Vaspers – a couple of months ago i requested an estimate from your company for the creation of a social media community and it was considerably higher than my client could afford.:>)
The important point here is that the company site that incorpates interactivity, allows user-generated content, and perhaps also includes e-commerce, doesn’t come cheap from your company, mine, or anyone else’s who knows what they are doing.
Even taking free software like WordPress and making it highly functional, incorporating e-commerce, creating style sheets that integrate with the company’s branding, takes more than time. They take skill, experience and money.
I definitely agree that once you have a multi-media site that incorporates interactivity and user participation, you can invest time in free or inexpensive tools including branded toolbars and widgets.
If you use blog advertising to drive traffic to the site — and that it one of the most obscenely cheap high-yield options advertisers ever had — you need to know not only how to buy the media, but also how to create ads that won’t offend blog readers.
The ROI is there, and it’s measurable with a variety of accurate tools.
The cost is often considerably less than traditional marketing, which was the original point of my post.
Ah, yes, to build a socnet similar to Dogster would be an expensive project.
I misunderstood what you were referring to in this post.
Vaspers – that’s exactly my point! I’m talking about building a social network/community for a client. And in that case, I bet you’d agree that $50K is more than reasonable for a 3-month campaign.
that said, i am sure that you, my learned friend, could not be the only one who misunderstood what i was referring to, and that’s my bad.
Oh yes, social media Marketing is very costly, even if you just consider the enormous amount of time you need to invest in it in order for it to work properly.
Check out this new start up and let me know what you think.. http://www.wapid.com
Social media marketing powered by the people..
Well a Social Media Campaign can be both cheap and costly depending on what enterprise you are marketing for, of course the bigger the budget the better and this is specially true for highly competitive markets. There are clients who understand that all this affects their ROI in the long run and then there are some that I like to call “Grocery Shoppers” who expect to pay up and then immediately expect to get H-ROI. I would say depending on the clients the price range that you have shown is pretty realistic.
Well good article here mate.
Very interesting costing and wording similarities between your article and this one from BusinessWeek:
Did you notice the byline on the BusinessWeek article “Debunking Six Social Media Mythis?”
I wrote it.
No wonder it has similarities to posts I write for What’s Next Blog. :>)
Very interesting blog and discussion, A Social Media Marketing Campaign would surely eat up a lot of $$$$$ and efforts but…Hey! social media marketing plays a big role on the success of your business.I say, take the risk, spend that every penny in your pocket and start a well planned marketing campaign.