Budgets for Social Media Marketing

by richard

It is time to start getting vocal. Most CMOs are wasting marketing dollars in 2010. There is massive mis-alignment between the marketing spend on different media channels, versus where people are actually spending their time. If marketing investment was aligned with where the eyeballs are going in today’s world, next years budgets would be turned on their heads. Let me explain. MarketingSherpa have shown that social media accounts for just 11% of the digital marketing budget, and I stress the words digital budget. When you take in other channels like TV, print, events, the budget allocated to social media marketing is currently a slither.

Nielsen Co. reports that Google has 82% of the global population visiting it, while Facebook, the leading social network brand has 54%. Yet the difference in time spent on each is vast – an average of 1 hour 21 minutes is spent on Google, but 6 hours is the average time spent on Facebook a month http://bit.ly/cchplA. Whilst what people do on Google and what people do on Facebook are different, Google spend is a large and staple part of most marketing budgets, whilst the statistics show that investment in social media initiatives is still in its infancy.

Nielsen Co. also recently reported that US websurfers are devoting almost a quarter of their entire Internet time on social networking sites, which is a 43% increase when compared to figures of just 12 months ago. This shows the way society is spending time online is rapidly changing, and the often yearly budget allocation cycle for most marketing spend decisions is far to slow to react to the changes in the way people are behaving online.

Society has shifted behaviour fast, and nearly all organisations are proving they are slow to adapt. I challenge you to think of the last five brands that you used today, perhaps the food you bought for lunch, the car you drove to work, the laptop/smartphone/tablet you are reading this blog on etc. Go and look at the Facebook brand pages of these companies. Many of them will most likely be totally uninspiring, without any engaging content, or applications.

To impact things further, far too many companies hand over ‘digital’ to agencies, who often because of the way they interact and secure their portion of the marketing budget, take a campaign led approach to social media. This works for driving a product launch, but is by nature a tactical approach to social media, rather than the strategic approach which is needed given the massive shift in people’s online behaviour demonstrated in this post.

Organisations need to be asking themselves, how do we build up an ongoing fan base on social networks? How do we move from a broadcast approach to marketing, to one that is focused on interaction and engagement? Indeed are we in a world where marketing should be content led, or engagement led leveraging gaming theory? After all 70% of the time people spend on Facebook is interacting with some sort of game type application. What does that mean for brand marketing? How can game theory be adopted in the way we present our campaigns to stimulate interaction. How can we use sweepstakes, user generated content competitions, games, quizzes, polls, coupons, group offers and other promotions that people will elect to engage in? Getting people to interact on social networks like Facebook is the key. You then access the viral nature of those platforms, with a users interaction appearing in their friends feeds, and on Facebook the average user has 130 friends.

Marketing has accepted the need to move from broadcast tactics to an engagement strategy in many companies over the last few years, with people like David Armano http://bit.ly/sgMOe describing the differences between traditional marketing and social engagement. However social media offers many more possibilities for engagement than most marketers currently utilise. Your success or failure in this medium depends entirely on whether you can drive engagement, and looking at the entertainment industry for tips on how to do this well will be the next big thing in social marketing. It isn’t all about responding to people’s posts and tweets. It is about providing an experience that is interesting enough for people to want to engage with your brand. Game theory is all about bringing people into an interactive experience that they want to repeat and share. It will change marketing in a social context, and separate the winners and losers of brand marketing.

So simply put, it is time to realign marketing spend with the what people are actually doing in their daily lives, which means the smart companies should immediately increase their investments in social media marketing. The shift has been fast in society, no brand can expect to have it all worked out. Social media marketing needs to be experimental, it needs to trial templates that work driving engagement, such as sweepstakes, user generated content competitions, games, quizzes, polls, coupons, group offers and other promotions, and brands need to think beyond a single campaign to managing a presence, with a high level of ongoing interactive experiences that people will engage in and share. This shift is for the long-term. Plan for it.


15 Responses to Budgets for Social Media Marketing

Stephen Heath says: August 13, 2010 at 5:31 pm

Really great information. Thanks for sharing. It is funny to me how word-of-mouth advertising is so coveted by big and small brands alike, but somehow the connection of word-of-mouth and social media has been made by so few. The reality is, I can share how much I love my new cell phone of Facebook. This praise is shared with 300+ people, most of which aren’t “real” friends, and most of which would never hear my raving reviews if not for Facebook. I believe those brands that allow people to share about them and allow friends to stay within Facebook doing their research will get the most per each voluntary product evangelist.

doug hay says: August 14, 2010 at 10:21 pm

Excellent analysis. I’m afaid small business is ever more behind the curve with limited financial and personnel resources. The firms that embrace social media will rule the mountain over those who ignore it.

Brant Emery says: August 17, 2010 at 3:07 pm

Interesting article – and let me play devil’s advocate here. I think you underestimate the personnel resources required to maintain community engagement at the level you suggest. It takes alot of time to properly and carefully engage with your market via social media. Also, although research indicates peopel are willing to engage in discussions with brands on social media, they still use this to reinforce purchase decisions via established channels. Therefore, the scalability of social media is limited. You hint that a incentives are still required on social media platforms in order to drive sales. Over and constant incentivisation decreases brand equity.
Also, time spend on social media reinforcing connections is not euqal to task based activity on Google – where clever and targeted PPC can more effectively tie-in to outcomes and also add-value.
I completely agree that we should never stand still and constantly test and evaluate the adoption and curve of acceptance for social media as a revenue driver, but too early to demand a tipping point in digital strategies.

Richard Jones says: November 5, 2010 at 3:14 pm

Brant – thanks for your comment. Some research we write about in our blog post ‘Why do people follow companies on social media’ is a good starting point for understanding motivational drivers. Joining the conversation – sharing ideas and feedback – was the lowest of all drivers. The highest were all concerned with ‘what is in it for me’ so access to discounts, promotions, sweepstakes etc, and the rest was to be engaged and entertained with exclusive content and to show support for the brand. These activities are scalable and don’t require as much time and effort in manually joining the conversation. I am not saying that you should not get involved in the conversation, just there is more than one tactic for engaging consumers over social media. Worth thinking about.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>