How Much Should I Budget for Social Media?

originally posted in Concept Hub

No matter whether you think we are slipping into a depression or we are just going through a bit of downturn, we all can agree that our budgets are going to be a bit tighter and more scrutinized as we move into the next year.

Many people are looking at Social Media as a cost-effective way of marketing, an effective way to generate sales leads and a necessity to stay ahead of or keep up with the curve of online communications.

However, no matter how in-depth your social media strategy will be, it is important to consider what resources will be needed to properly execute a strategy that will provide an appropriate return on your investment.

The investment in time and resources that an organization invests into social media follows the same basic economic rules of any investment.

Invest too little, make changes too slowly, and you will not get an adequate return; spend too much time and money and making changes too rapidly and you will find many of your resources are being wasted. A successful social media strategy relies on finding the right point on the graph where supply (resources) equals demand (return).

So where do we begin?

First, realize that social media is not a fad (which most people are now realizing), but the way we are going to continue to communicate and connect with our prospects, clients, vendors, and so forth. The first priority when budgeting for social media needs to be in educating key team members. This does not mean sending people to conferences where they hear high-level case studies and meet vendors trying to sell a solution in a box, but a real investment in change management within the organization.

This will require training key team members on the technical know-how as well as best practices in participating within social media communities and will also require investing in outside consulting to analyze where your organization can cut cost by eliminating inefficient communication channels and optimizing current communications for social media.

At a very minimum, what your organization should expect in return is;

  • Greater brand exposure through multiple online channels
  • Increased number of qualified sales leads
  • Greater insights into the needs of your market
  • Real-time knowledge of the competitive landscape
  • Enhanced customer service

All of this should equal a higher rate of return of income for your efforts. This seems a little backward in a tough market. When markets get tough you typically have to work harder for less. But the reality is that the organizations who make it through the tough markets are the ones who make changes to work smarter.

We do not have to go back too far to see this. During the economic slump of the early 2000s when companies were going belly up daily there were forces at play that were taking advantage of the rich resources of talent that were available. Those forces were the need for people to connect, collaborate, and share information to innovate. As more and more bright minds found themselves without an office to report to, more and more people were connecting across the globe and finding ways to shake up business as usual. We are all facing those innovations today as we read blogs that we subscribe to via RSS, contribute or consume information from Craigslist or Wikipedia, or are operating within an open source platform.

Even if you fall into the camp who fears we are facing a depression, it is obvious we do not live in the same world of the early twentieth century. Our ability to respond quickly, to create strategic alliances, and to get in the right place and the right time gives every person and every organization the ability to take control of their own destiny.

But decisions have to be made and resources will have to be allocated.

Training budgets need to lean heavily on training employees on how to participate in this new world. Marketing departments need to put emphasis on campaigns and communication channels that will get the broadest reach and will have the longest life.  Stories of success and failures need to be captured, shared and learned from, which will require a new internal communications strategy.

Organizations do not need to focus on hiring a new team member focused on social media, that would be equivalent to hiring a person to use the Internet 10 years ago. It is something every employee needs to learn how to use appropriately. Organizations do not need to increase their marketing and pr budgets to include social media, but to learn how to optimize their marketing and pr efforts for social media. Social media is not an add-on, it is an evolutionary change.

Obviously, the exact dollar amount that needs to be budgeted for social media is dependent on each organization’s size, goals, current budget allocations and expected return on their investment. However, the budget allocation for social media can and should come from the various departments within the organization and be applied for a unified goal.