Social Media Budget Planning and ROI


This article is for anyone who is trying, wanting, or begging to understand why social media isn’t working within their organization. It is for anyone who feels like the application of social media within their business is hand-cuffed by a departmental silos and cultural ignorance.

You could be a line worker trying to do something new, middle management trying to organize your department, or an executive trying to establish where all this ‘stuff’ fits in.

I’m going to talk a bit about the fundamental viewpoint needed to make the correct long-term and sustainable social media budget and ROI choice.

My two opening statements

#1 Social Media should include marketing.
But it isn’t only marketing.

Social media budget should be integrated into a multidisciplinary support initiative covering holistic impact points that spread through-out the organization. Costs should be scaled against the capability to deliver on specific benefit opportunities and the reduction of potential risks.

#2 Social Media is not a one-time cost.
It is an on-going asset that grows.

While marketing often revolves around short-term project goals, many of the primary benefits of social media and E-Database Marketing reside in long-term areas of the organization. These include such categories as customer service, employee knowledge management, talent acquisition, brand growth, and market leadership. Failing to have strategic and actionable a one to five year plan for the adoption of new trends is a sure-fire recipe for disaster.

Setting a Social Media Budget

Identifying Return on Investment

In order to properly define a social media budget, you first need to look at the organization from a top down and bottom up perspective.

From a financial perspective it is easiest to look at the quarterly budgets and structure a model for your social media budget across the departmental silos according to what the ‘business as usual’ numbers say.

While this is only a starting point it is also an important step to apply the logical question of “where does social media seems to have an impact within our org?”

By creating a separate pool of budget that can be applied to specifically targeting the more obvious points of interaction you can harvest low-handing fruit as you build larger strategic efforts.

Getting people to understand the Social Media Budget

A second and very important point is training and adoption.

The ability for an organization to harvest actionable ROI from social media revolves around the culture of innovation and continuing education.

The largest obstacle of discovering business impacts is caused through being closed minded, believing that you know-it-all, and that social media has no value.

Just because you think a cloudy piece of white stone is glass doesn’t make it a diamond.

It simply means you lack the ability to realize what you are looking at.

When applying a social media budget to the training and adoption category of your financials, expect to double your budget if you plan on innovating your business and finding the diamonds within and around it.
Collaboration, your social media budget doesn’t belong to one group.

A primary reason that ROI is often hard to prove with social media is that initiatives within one department have beneficial impacts in other silos.

Common examples:

  • Good customer service = reduced public relations costs, less sales churn.
  • Good sales process = less customer service issues, higher conversion rates for marketing.
  • Good leadership strategy = better hires, increased employee morale, growing stocks.

In many organizations the left hand doesn’t know what the right hand is doing. As social media is often in an infancy stage of understanding within any one department, the ability to communicate multiple benefit points outside of the departmental expertise becomes extremely limited.

As humans most of us have tunnel vision and are trying to apply the solutions we have to the problems in front of us.

When a social media budget becomes established in the marketing channel, marketing managers with social media initiatives rarely advise other teams of important impact points and executive leadership often fails to understand why budget for HR, PR, and IT should be spent on marketing (effectively killing all HR,PR, IT return on investment points.)

My personal perspective…

Social Media Budgets shouldn’t be cost silos, but revenue opportunity

One of my biggest gripes about social media budgeting is that executive teams are often disabled by the mindset of repetitive failure.

In essence that means that if you tried three different diets and failed to lose weight all three times, that all diets must be a joke.

Many executive teams think of social media in the same way. They’ve tried a dozen different social media marketing initiatives and have lost money on all of them.

They don’t realize that the reason they lost money is that they failed to look at the big picture and didn’t have the tactical knowledge to identify what was on the table.

Size doesn’t matter
Quality vs Quantity

I can’t tell you how many Fortune 500 executives I’ve heard talk about a some amazing number of followers on Facebook and make the statement “wow, our competitors have a gazillion fans and are beating us…”

They aren’t beating you: they probably have no idea what those fans are really doing and have even less idea about making money from them.

More importantly – are you really that worried about the number of spam robots, ‘me too’ fans, and unengaged users another company has?

How about applying the same effort and refocus on your businesses processes; innovating around critical areas of business that have big impacts on the bottom line?

Social Media Budget…

Is really about leadership

At the end of the day what we are talking about isn’t a social media budget.

What we are talking about it the continuing evolution of the marketplace and the process of innovation and adoption that occurs within an organization.

The clear winner in any marketplace is the business that has the leadership qualities to inspire innovation and the culture to win as a team.

Aren’t we really talking about an innovation and evolution budget?