Social Media Costs

7 Expense Factors to Monitor

Extending beyond the “cool” factor, social media’s increasing marketing usage is partly attributable to its perception of being “free”. Fueling this view are the success stories of small businesses for whom social media levels the competitive field by extending their reach using sweat equity in lieu of hard dollars. While it’s easy to believe that social media marketing is easy and relatively low cost, but before you launch your social media campaign, assess how these rarely publicized components can effect your profitability.

  1. Personnel. Social media marketing requires staff support that extends beyond someone occasionally checking Facebook. Specifically consider the following:
    • Management including content creation, activity monitoring and decision making.
    • Non-marketing headcount extending to areas such as product development, merchandising, sales and market research to support these efforts.
    • Human resources to help with job requirements and performance as well as additional staff hiring.
  2. Supporting marketing. Social media doesn’t exist in a vacuum. It requires supporting marketing to promote and extend the reach of your efforts. Supporting marketing is critical for connecting with prospects and customers who aren’t active on social media platforms. Among the aspects of your marketing mix to include are:
    • Website for related information and activities.
    • Email marketing which according to Exact Target’s recent research doesn’t overlap with social media marketing.
    • Search marketing to direct users to your social media activities and general website.
    • PR to enhance the profile of your efforts.
    • Product packaging and related collateral to get users’ attention.
    • Offline communications and advertising to cross promote efforts.
  3. Related campaign costs encompassing a diverse set of factors such as:
    • Agency and/or consultants’ fees depending on how the initiative is implemented and how much is outsourced.
    • Technology including a wide range of options such as branded areas of social media platforms, upgrades for targeted technology products and additional specialized programming services that may not exist within your organization.
    • Analytical tracking to assess your campaign’s impact through the use of specialized additions to your current metrics or targeted offerings such as sentiment analysis.
  4. Reputation monitoring. Regardless of whether your company actively participates on any social media platform, it’s critical to constantly track what’s being said about your firm.
    • Sentiment tracking to determine what’s being said across various platforms including your competitors and partners since this information may have an impact on your organization.
    • Crisis action plan to react appropriately and swiftly regardless of timing (this means 24/7) with access to senior executives and/or a PR firm.
    • Social media policies and related tracking to ensure that the company and employees are protected.
  5. Expanded customer service. Since social media platforms act like communications channels, consumers assume they can handle inquiries. While every company can’t be a Comcast or Zappos, once you have a presence on one of these vehicles, consumers will assume they can use it for customer service. Not responding to them could hinder your social media efforts.
  6. Incremental complexity. Adding another communication platform can increase cross-channel complexity. This translates to the need for expanded detail and personnel management across functions to ensure a consistent message and service.
  7. Opportunity costs. When determining whether or not to launch a social media campaign, assess the impact across your entire organization. Consider whether the total effort will prevent you from achieving more critical goals. Further, will you be able to continue the effort going forward since social media isn’t a one time advertising campaign. Abandoning your presence after a few days or weeks can look worse than doing nothing.

Before you jump into social media marketing, determine the full impact in terms of personnel and cost on your business. While some of these costs will occur whether or not you participate, it’s a good idea to understand what you’re getting into and what’s required.

Have you experienced any other hidden costs in implementing your social media campaign? If so, please add them via the comments section.

Happy marketing,
Heidi Cohen


Photo credit: Tropical.Pete via Flickr

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  • Barry Holbrok

    One critical issue is the Reputation Management because not only the consumer or client may post something negative about your product or service. Frequently, competitors do this. Outsourcing an SEO company involves not only Internet Marketing but also consider their track record in Online Reputation management. I have seen this review for a particular company that might help any internet business, here it is SEOP Reviews

  • http://www.adamlewis.info Adam Lewis

    Heidi – great article, very detailed breakdown of the issues and costs. I have written somehting similar about the ‘hidden costs of social business’ that you might find interesting: http://www.adamlewis.info/wp/2011/06/hidden-costs-of-social-business/

    Adam