Daemon Digital

6 reasons why you need to factor social media into your FY11 budget

Posted on 17. May, 2010 by in Social Media

Further to my earlier blog post last week and the questions I’m being asked in regard to community management, I thought it would be good to look at one of the questions I have been asking as I meet marketers across Sydney. That is, how much have you allocated to your budget for social media next financial year? – or questions to that affect.

The responses have been wide and varied but mostly include some form of silence, shoulder shrug or look up and to their right – meaning what comes next has just been made up.
I’ve got thick skin so you can tell me if you hadn’t even thought about it, are wrapping it all up as part of your online budget, or indeed are hoping someone would come and do it all for free.

I may be one of the first people that’s asked the the question internally or externally so I understand the reaction.

Often the person I’m chatting with then asks me how much they need to allocate and there is no response other than to keep on digging and ask more questions.

What’s your total marketing budget?
How much do you allocate to PR?
How much did you spend online in the past year?
What do you want to achieve through your communications?
How important is it for you be active in this space?
What’s the corporate feeling about social media?
Where is your budget relative to last financial year?
Does something need to give for you to move in a new direction?

In many cases something does need to give, especially fthe back of the GFC. In tougher financial times like those just gone, marketers tend to go back to what they know, what’s worked in the past – the safer, lower risk alternative.

However like it or not brands are being discussed with or without a brands marketing presence. People are now chatting about them when they are using it, when they are not. When they are happy with the product or service and when they are dissatisfied.

Now marketers have the opportunity to jump in, eavesdrop and then choose to engage if they wish. It might seem quite frightening, the unknown always is. It might seem easier to bury ones head in the sand and ignore it. It might seem easier not to submit FY11 plans with the new budget line “Social Media”. It might seem easier just to turn your back on it and walk away.

However, as a marketer, my view is your responsibilities have changed. You no longer control the monologue. You are now a bystander to the conversation, a witness to a dialogue that you no longer control. You can however influence it, and help others do the same on your behalf. This is the new opportunity.

Imagine 12 months down the track and you are reviewing your marketing activities. You thought you’d done a great job – sales are steady if not growing. Brand awareness is as high as it’s ever been, messaging is on brand, and everyone is happy.

Then your boss throws a heap of paper on the desk, excerpts from the social world.

There are 42 new versions of your TVC on Youtube – with some 376 comments – some good, some not so good. Why haven’t you responded?

Someone has set up a Facebook group called “your company name” = death, (genuine story from real client). Why haven’t you responded?

There is an unofficial Twitter account with someone pretending to be your company and speaking on your behalf. Why haven’t you responded?

You may as an organization have made the decision not to engage, but if you didn’t know about the above in the first place, I believe that’s verging on corporate negligence, and if you did and you chose to ignore it, then I take it a well thought through decision has been made.

Now of course I am playing devils advocate, but with the communications channels now open to consumers, it’s a valid approach.

In any business you have risk, and you need to calculate the impact of that risk. You need to consider the worst case scenario, prepare for a crisis, and put in place a plan to best manage that risk. Below are just 6 reasons you MUST focus part of your marketing attention and budget to social media.

Trust – People used to think that social media wasn’t a trustworthy news source, how can we believe something that’s come from somebody else and not a respected news service like The Australian or even The News of the World? Today social media is one of the top and most trusted sources of news and information. We trust our friends, trust is growing, and so is the market.

It get’s easier with time – It’s easier for us to cross the Blue Mountains now than it was when Blaxland, Lawson and Wentworth made the trip. The same applies to social media, or to put it in context, cast your mind back to when you where planning your first website. Now look at what you have achieved. The more you use social media, the more you will understand and the more you will get to understand the costs involved.

Social media is now the #1 online activity, beating email and porn – Observing the habits of consumers is part of what marketers do, so take note of how they are spending much of their time. Does it make sense you put more time, effort and money into something that consumers are doing less and less of?

Its two way – it’s not about broadcast. Still today in Australia the brands that have some of the most significant appeal and audience ratings are the AM Talk back stations. Now they aren’t necessarily open to conversation about their advertisers unless of course we cast our minds back to the 1999 “Cash for Comment affair”, but as a brand that allows conversation 2GB, 5AA et al continue to dominate the marketplace despite the competition from the FM band. Why? Because they facilitate a conversation for their consumers.

Branding – social media allows you to present your brand in a space that belongs to the consumer. Treated the right way, you can help consumers connect with your brand and develop a rich conversation at the same time.

It can differentiate your brand, your business, your work and you – Have a read of Differentiate or Die: Survival in Our Era of Killer Competition by Jack Trout (you can buy a Hardcover used copy for 0.34c on Amazon if you click the title).

So as you prepare your budgets for FY11, you need to be asking yourself what you should be doing in social media. Do you want to listen? Sell your IP? Manage or extend your contacts? Manage your brand reputation? Or perhaps even sell product?

If you aren’t sure, then drop me a line on james.hopkins@daemongroup.com or on 02 9966 2200, and I’d love to come and see you and help you work through your communication and business objectives, and discuss how social media might be a channel worth more of your time.

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