Sunday, July 24, 2011

Social Media Budgeting

During a recent conversation with some industry peers, it struck me that while social media excited one and all, most remained clueless when it comes to the industry’s appetite to spend and allot dedicate spend budgets for social media activities. This fact intrigued me and I set out to find the silver bullet.

So what is Social Media? For some social media means twitter, blogs etc., while for others it might mean facebook, orkut or simply an online presence. According to Sean Carton, social media is the “technologies that facilitate conversations.” The conversation begins when someone /anyone start it online and its popularity is often defined by the involvement of outside influencers. After getting a sense of what social media is in a nutshell, it is now important to understand how much budget should be allocated for the same.

It’s a myth that social media is free. There is no fixed percentage which is allocated for social media budget but it largely depends on the following factors which helps in deciding how much budget an organization allocate for social media.

First and foremost, it is important to know the awareness and maturity of the marketing head in an organization. Social media budget is part of the marketing budget and unless the marketing head is not mature enough to understand the importance of social media in today’s world then it is difficult to allocate a budget for the same.

On similar lines the awareness and maturity of agency has a major role to play in deciding the budget. Not all agencies are open to change. With the way communication is evolving, the agencies need to change the way they communicate their message to the audience. There are a lot of agencies which still believes in traditional methods of communicating. Although this way of communicating won’t die but a more effective way of sending across the message to millions of people would be a social media platform and agencies need to realize this before it’s too late.

So what happens if the agency is open to change and the marketing head is mature enough to understand social media but there is no awareness and maturity in organizations? Thus, unless the organizations are not open to new tools of communicating, the agencies can’t do much. Hence, a big factor of whether one needs a budget for social media depends on the need/want of the organization to use effective means of communicating.

Last but not the least every industry is unique. There are two types of industries – B2B (Business to Business) and B2C (Business to consumer). It will be interesting to explain this concept with the help of an example.

Example: While Dominos will apply pull strategy and would need social media to reach out to the masses in a more efficacious way, the person providing wheat and flour to Dominos, would not find any worth spending money on the same. So why would he need to allocate budget for social media?

But if Dominos apply push strategy and introduces social media platform for the supplier community, then eventually all businesses will have to move to social media platforms to communicate their message to the masses.

In today’s world where technology is changing every second and competition is trying to outdo you at every step, you want to be ahead of the rat race. Come to think of it, if Dominos is using social media then its competition would also use such platforms to stay ahead of the race.

Thus social media has already changed the way we communicate to each other and the organizations need to realize the importance of the same. Once the basics are understood then only one can think of allocating budgets for such platforms. What do you think?

My 2c Worth!

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