In 2014, I think it’s safe to say that you can’t ignore social media. You can try, but in almost every industry, your buyers are on social media.
They don’t necessarily transact on every platform, but they are broadcasting and receiving messages on each one.
When you put aside all the hype, what social media represents is a massive reduction in the cost of sending and receiving messages. And when you reduce the cost of something, you increase the quantity.
The economics of social media mean that you can send out a ton of messages at a low cost–and so can your customers. Social media for business isn’t always about conversations (though they can be helpful); it’s about an increase in the total volume of messages that you and your customers can send.
A few things have come out of this increase in volume:
Your buyers are listening to someone. A massive increase in volume means that there’s a lot more to listen to. And if they’re not paying attention to your messages, your buyers may be paying attention to your competitors’ messages. Or worse, someone who is disrupting the industry. Do you want your buyers’ attention when it’s available, or would you rather let someone else get their ear?
Your buyers are talking in public. If you want to make someone happy, compliment them in person about something they wrote at Twitter. Twitter can seem like its own world, but it’s flattering to have someone in real life acknowledge your tweets. Paying attention to what your buyers are saying is a no-brainer. It’s free market research.
Social media improves your ranking on search engines. We’ve been overthis before, but publishing regularly on blogs and other social media is the best thing you can do to rank high on search engines. And since sales start with search, this is a big deal.
The value of publishing is non-zero. This opportunity to publish is worth something—but how much? Obviously, it’s not worth dropping all of your existing business activity and spending all day on Twitter. But when, according to Pew, 71 percent of adults use Facebook, 22 percent use LinkedIn, and 18 percent use Twitter, you can’t ignore it. (That’s more than read newspapers or read magazines.)
The cost of social media is non–zero. Forbes cites a figure of 32 man-hours a month for a mid-sized company to manage a single platform. Assume a $15/hour employee is on that, and assume they cost $6 in benefits for a fully loaded cost of $21. 32 hours x $21/hour = $672 a month. And if you want to add a second platform (Blog? Twitter? LinkedIn?) it’ll be more. For that $672 per platform, you would hope that you’d get an expert in your desired social media platform. But that’s not always the case. And since you can’t guarantee the return on social media, the math isn’t that simple.
So what’s the ROI? How much should you invest in social media?
The answer is different for every organization. The costs of social media are very different among different organizations, but one answer is clear: when the cost and the benefit are not perfectly defined, the safest thing you can do is make sure you’re not being inefficient. You wouldn’t put someone who doesn’t know how to use a tool in charge of a tool in any other scenario, so don’t do it here.
That leaves you with three scenarios for taking care of social media:
- Ignore social media. This is getting harder and harder to justify.
- Put an amateur on it. This may make some kind of sense in the short term, but in general, you don’t want an amateur managing your brand. Remember, it takes 20 years to build a reputation and 5 minutes to ruin one. Don’t risk it.
- Outsource it and see what happens. You don’t need to go whole hog, but you can’t get away with a mediocre social media presence. By working with professionals, you can get the biggest bang for your buck and see if it works. It also allows you to put a cap on how much you’re spending.
Social media represents a real break from the past. The cost of each message has been deeply reduced, but the importance of each message has not. Every time your brand speaks, someone is listening. (And if they’re not listening now, they will be able to find it via search later.)
If you’re struggling with how to think about social media ROI, you’re not alone—just about everyone else is too. But in this foggy atmosphere, the smartest thing you can do is optimize for cost control and for efficiency. Set a budget, and get the best help you can afford.
Social media has changed the rules of marketing, but not the rules of economics.
Image Credit: Jason Howie