Which Bucket Will Fund Your 2011 Social Media Program?

It has been said that the dynamics of Social Media as a channel are very similar to the industry shift that occurred in the early 1990’s, when companies realized they needed a website. If you can remember back to those days, most companies had no strategic plan for how to integrate this channel into their overall marketing strategy, but because there was so much buzz about the Internet, companies jumped on the bandwagon, not knowing or comprehending that eCommerce was the wave of the future.  As you might recall, companies scrounged up the financial resources needed to fund this unproven channel. Social Media has many similar attributes.

The huge burst in popularity of social media channels caught most businesses by surprise when their popularity amongst demographically ideal consumer age groups became apparent in early 2009, when Facebook’s audience was a mere 150 million. Now they boast over 500 million users, and were even likened to a utility in the New York Times.

As the fourth quarter and the impending budget cycle loom, there are several key considerations companies must consider. In a recent report entitled The ROI of Social Media Marketing, Forrester suggested that as social media matures, metrics must mature along with it, and suggests three considerations when valuing social media metrics:

• Metrics will gauge not just activity but outcome. Forrester’s Augie Ray suggests that as the technology matures, many new measures are abandoned in favor of traditional ones that align with business objectives, not simply technology, and that true social media measurement will come from gauging  all outcomes in business terms.
• Social Media focus will shift from short term to long term.  The greatest and most valuable brands weren’t created one quarter to the next, but rather with an eye toward building lasting relationships with customers.
• Not every social media program needs ROI to deliver business benefit.  Just like companies continue to invest in redesigns, micro sites and technology on their website to keep up with customer expectations and competition, many social media programs such as Facebook presence are becoming the new table stakes, regardless of immediately available ROI metrics.

This leads to the vexing question of how companies should budget and fund their social media programs.  Since social media actually crosses multiple departments (Public Relations, Branding, Research, Customer Service and Sales) one technique might be to project the annual cost of administering the planned social media program, and then pulling 20% from each “bucket” in these respective departments.  Whatever technique companies choose to utilize, the level of investment should be significant enough to fund both the frequency and quality of desired interactions with fans and followers to insure their true brand voice is heard.