COMMUNICATION>How to Value the Cost of Social Media Marketing Campaign?

I have learned very recently that one of the largest Russian company had signed up for almost 1 million dollars to create and animate an online brand community with an almost unknown local digital agency. The offer included 170.000 dollars for brand blog creation, 5.000 dollars a month for IT maintenance and others un-definite expenses like yearly agency commission of 160.000 dollars.

If you are in digital or social media business, you know that such project can cost a maximum 300.000 dollars for one year the most. Such a case pushed me to ask myself one very relevant question: Do client understand what they pay for, when starting a Social Media campaign? (I will not discuss about the second big question: How much money does the guy(s) in the advertising department of this company has received as a bribe…).

Social media is not about media buying. Its about helping consumers to engage with a brand, to make them love and recommend this brand, to make them share their experiences with their friends and relatives, its about understanding and meeting expectations, its about commitment… Nice words full of meaningful concepts but nothing concrete for someone who doesn’t understand marketing so well. At the opposite, paying two thousands dollars to have your ad running for one month on a billboard in front of your shop is way more concrete. Any advertiser invests budgets in advertising only to reach a strategic goal. Above the line advertising is today challenged so badly that few marketers can indeed justify a significant ROI. But above the line is highly visible, and your friends will tell you ”I did saw your ad yesterday running on TV”. Social media and online strategy are less visible and are more about a process than a big and flashy numbers. No friend of yours will call you as you increased significantly your conversion rate, or if you have doubled your traffic on your web-site…

Social media marketing is complicate and still not a clearly understood channel. 6 years ago, nobody was talking about Web 2.0, Social Media, Facebook, Twitter and so on. Buzz marketing was about creating the most astonishing video or street marketing campaign to hopefully have people talking about you. Today, we have understood that this is not enough, to get consumers’ attention and create a call for action. We have find new ways to enter consumer’s life’s, start listening to their voices and engage them in multi-level programs. Faux blogs and undercover marketing are slowly disappearing as they bring nothing but bad buzz for the one who launched such campaign. But lets face it. In 2004 we already thought we understood the all thing and we were wrong. Today we think again that we have understood the all Social Media world. And time will probably show that we were wrong, again. So as far as our field of expertise is changing and evolving day after day, making yesterday’s statement out of dates, how surprising it really is that clients don’t understand what they pay for investing in Social Media?

Social Media is not about GRP. But if we think about it for a second, what information buying 1000 GRPs really gives you? You don’t know exactly how many people will see and pay attention to your 30 seconds commercial. You don’t know how many of these people really need your product or can afford to buy it. Roughly you will be able to calculate how much percent of sales increase you will reach during your campaign. Then you will calculate the quantity of additional sales minus the cost of your ad campaign and cross you fingers that this figure is a plus. Social media can provide you with so many metrics that nobody has agreed yet on which one is most relevant. But why should one be more relevant than others? Instead trying to adapt GRPs to Internet, why it shouldn’t be the offline industry to propose the same metrics as Internet so? What if you could have a Billboard in front of your shop and pay only for people entering your shop or buying your products after seeing that ad? With Social Media , the challenge is that is you marketers how shall now make up your own metrics. GRPs, CPP and CPM are out dated metrics in the world 2.0.

Social media is about creating a “Marketing Vortex”. We all know about the good old marketing funnel, when a placid consumer is dragged into the funnel after hearing an advertising message that creates for him a need. Then we had to wait all the way down till he buys our product and hopefully enters our loyalty program to buy again. As far as Social Media take place in between the funnel, when consumers are looking for information and recommendations, a strongly integrated strategy should allow to create what I called a “Marketing Vortex”: an automated funnel, where we control every step of the buying decision, and where a consumer is dragged automatically step by step from the creation of the need till entering the CRM program. The approach is 100% dedicated and personalized to each single consumer. The point would be then to know precisely for any company what is the cost for each new customer. No surprise and no overpaying anymore!

In conclusion I would say that one big part of Web 2.0 and Social Media experts’ job is to educate the markets. Getting hundred and fifty thousand people on your web site every month is worth 0$ if you cannot convert this flow into selling your products. So lets start talk concrete about social media, and what goals it can achieve: it can push sales by generating qualified leads. It can drive loyal users to buy more often by getting them within an online loyalty program. It can influence consumers’ buying decision by having e-influencer recommending a brand… If you are a marketer and don’t understand what is the price range for a social media campaign, know that there are quite a few agencies able to realise any project to achieve your targeted goal, so don’t hesitate to pitch. There are a lot of smart people in this industry, so please don’t be afraid to ask any questions to professionals (and I am sure you do).

Thierry Cellerin- Consumer’s Engagement Marketing Specialist.