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The cost of social media

the cost of social media by Matt Owen http://econsultancy.com/blog/6296-calculating-the-cost-of-social-media

Imagine an advertising and marketing platform that reaches billions around the world, and doesn’t cost you a penny.

Free to get involved, free to share and promote content, with a massive locked-in audience who will actively promote your content for you.

Unfortunately it doesn’t exist. Social media is many things but despite several statements to the contrary, free is not one of them.

Many companies planning a social media campaign are attracted by the seemingly low set up costs and ongoing overheads involved, but scrape away that optimistic surface and you’ll find there’s a need for real investment if you want your campaign to function properly.

All businesses need a return, but when it comes to marketing, and particularly social media engagement, direct ROI can be difficult to clearly identify.

Ironically, it’s one area where figures feature prominently. With all that raw data sloshing around, you’d think that tracking would be an easy task, but unfortunately traditional ROI is in many cases too simplistic to fully measure either the cost or value of social media campaigns.

In order to really identify which return you’re getting from your campaign, you need to identify your investment and goals, and examine each aspect of these individually in order to determine effect.

At its core, social media ROI is a fairly straightforward measurement technique:

If your total expenditure is less than the value you receive, then you have positive return. If however your created value is not equal to your investment, then you have negative ROI and the wheels fall off your business fairly quickly.

Simple.

Or at least it seems to be.

The complications arise when you realize that every business has its own definitions of value, and of total expenditure. In order to really measure your return you’ll need to really nail down your costs and create an ongoing measurement model that can be applied to all your social media campaigns.

First, you’ll need to define exactly what ‘total expenditure’ implies.

There’s certainly a common myth that social media campaigns are free to run. Well, it’s true that setting up a Facebook page and sending tweets won’t cost a penny, but hiring someone to do that for you?

As with any campaign, you’ll need to run some fairly complicated breakdowns to ensure you aren’t caught out by hidden costs.

You have to ask yourself how much is everybody participating in the social aspect of your campaigns, another words are you in the conversation everyday and trying to be social. I believe this will help you as time goes on to determine an ROI, but you have to be social.