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The REAL Costs of Social Media
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The REAL Costs of Social Media



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  • For effective social media marketing, you need to be sure that your networks are easy for your consumer and target market to find. Website integration is a must. No matter who maintains your website, keeping this up-to-date with the most recent open graph implementations, will cost you or your organization a minimum of time.
  • YES! Because it works. How do I know if works? According to eMarketer, the longer a brand spends doing SMM, the more money they invest. Breaking down the different aspects of SMM, the major players are increasing budgeting from anywhere between 18% and 95%. This tells me two things:They see the value, and the ROI, and believe it warrants more of their overall budget They are becoming more and more aware that social media DOES come at a cost, and that they just HAVE to adapt.Using social media gives you, as a brand or organization, the unique opportunity to communicate with your fans and potential consumers at a communal level. By virtue of the medium, social media users who are exposed to your brand, will be more receptive and accepting of your messages and impressions on them. What do I mean by communal level?There are a few different take on the relational theories model, first developed by Alan Fiske, but the basic gist is that there are 4 Elementary Forms of Human Relations. To avoid getting into the nitty gritty of the whole model, there are two relationships which apply directly to marketing.1.) Communal Sharing: Where people treat each other as equals. Where they can share comfortably. Examples of these relationships are your friends, family, many of your coworkers, co-members of an organization or the like. I would expect to hear about someone’s personal life, friendships, hopes, dreams, and day-to-day nonesense. In this type of relationship, all of these exchanges are expected and exceptable. Social media lives in this realm. It is a Communal environment because the relationships I have made within it are of the communal sharing nature.2.) Market Pricing (some people refer to this as the Exchange relationship): Here, exchange is expected. In an Exchange relationship, I would expect to be advertised to; I would expect negotiations. I will give you something and you will give me something based on the amount I have given you. This is the type of relationship that brands have with their consumers or potential buyers offline. I expect to be advertised to when I watch TV or drive down the road, listen to the radio or reading the newspaper. I’m OK with that because in those environments, I expect that type of exchange. It’s appropriate, and normal.In social media, these two worlds collide. Brands must tread carefully, but the results can be astounding. Let’s take a closer look.
  • Here are some examples of brands actually communicating with their audience. They are behaving in real time with the people who will potentially buy their products, support their organizations, advocate their services. And here’s where the magic happens. On Facebook, everytime a fan communicates with you in any way. Liking your page, commenting or liking a post, tagging themselves in a photo, whatever, it shows up on their wall. This means it can show up in all of their friends’ newsfeed or ticker. Let’s break this down:The average Facebook user has 130 friends.The above Facebook post has 621 likes, 18 shares, and 56 comments. Of the 56 comments, 9 had likes. This is a total of 705 actions taken on one Facebook post. It’s a silly drawing that probably took someone 15 minutes to draw. Each time someone took one of these actions, it showed up on their 130 friends’ pages. This amounts to a total of 91,650 brand impressions. But not just any brand impression. This brand impression has value. Your friend, positively communicating with a brand, knowing you will be exposed to the information, is the closest thing to a word of mouth endorsement that you can get to without someone actually pulling you aside and endorsing a brand. This carries communal weight. While it might not result in a direct sale, it create favorable brand impressions. No one is saying quit traditional advertising, but it would be foolish not to fold this into your marketing mix. Yes, it costs money, but marketing costs money, and social media is the most effective way to reach out to your audience, on their terms, when they are receptive to the message, about what and who you really are. It’s not about crafting the perfect 30 second spot, or the most eye-catching billboard, it’s about listening to your consumers, hearing what they want and being able to give it to them. Behaving communally.Beyond that, this a forum for you to communicate in real time with your fans regarding things that are happening in your organization or brand. If a crisis comes up, something unexpected happens, you are getting unexpected media coverage. You can address it. It costs money but it’s so much cheaper than the alternatives. Talk about he alternatives. Get some stats about TV, radio or print advertising.


  • 1. The Real Cost of Social Media
    And why it’s totally worth it
    Katrina (Scooter) Kokoska
  • 2. What?! SMM isn’t free?
    @kkokoska// #schipulcon
  • 3. What We’ll Cover:
    1.) Rethinking social media costs
    2.) Budget planning breakdown
    3.) Measuring ROI
    @kkokoska // #schipulcon
  • 4. 1.) Rethinking the cost
    43% of US companies are successfully finding new business with SMM.(Marketing Profs)
    A move from tinkering to full deployment
    In 2011 SMM will account for 10.1% of marketing budgets
    Up from 7.1%
    @kkokoska // #schipulcon
  • 5. Custom Tabs
    The Fanpage
    @kkokoska// #schipulcon
  • 6. Hub of your social media presence
    Home of your promos
    Gateway to your website
    @kkokoska // #schipulcon
  • 7. The Ticker
    The Newsfeed
    @kkokoska// #schipulcon
  • 8. Facebook accounts for 90% of time spent social networking
    The Newsfeed accounts for 4% of ALL time spent online
    Users are 40-150 times more likely to consume your content in their newsfeed than on your page
    The average Facebook user has 130 friends (comScore)
    @kkokoska // #schipulcon
  • 9. Sponsored Content
    @kkokoska// #schipulcon
  • 10. Newsfeed is more and more competitive
    Built-in endorsements
    Flexible and easy-to-use
    @kkokoska // #schipulcon
  • 11. The Cost of Facebook:
    Content creation
    Third-party apps
    Legal counsel
    @kkokoska // #schipulcon
  • 12. Twitter
    @kkokoska// #schipulcon
  • 13. Getting Started
    @kkokoska// #schipulcon
  • 14. A Week of Twitter
    Content Research – 2 hrs.
    3-5 tweets per day – 2 hrs.
    Monitoring – 2 hrs.
    Third-party apps – Btwn. $0 and $500/month
    Evaluation – 1 hr
    @kkokoska // #schipulcon
  • 15. Social Media Toolbox
    @kkokoska// #schipulcon
  • 16. Types of Tools
    Twitter – Tweetchat, Tweetdeck, Hootsuite
    Facebook – North Social, Short Stack
    Listening – Radian 6, Traackr
    Tracking – Google Analytics, bit.ly
    Content Creation
    @kkokoska // #schipulcon
  • 17. Folding it in
    @kkokoska// #schipulcon
  • 18. Is this really worth all the trouble?
    SMM is projected to be $3.08 billion of online marketing spends – 10% (eMarketer)
    Organizations are increasing aspects of their SMM budget between 18% and 95% (eMarketer)
    @kkokoska // #schipulcon
  • 19. Communicating at Your Audience
    @kkokoska// #schipulcon
  • 20.
  • 21. Communicating with Your Audience
    @kkokoska// #schipulcon
  • 22. @kkokoska// #schipulcon
  • 23. Potential Impressions
    9 liked comments
    91,650 potential impressions
    @kkokoska // #schipulcon
  • 24. Facebook | Radio
    • Production: $50
    • 25. Monitoring time: $100
    • 26. Time spent: 1.5 hours
    • 27. Total: $150
    • 28. Potential Impressions: 91,650
    • 29. CPM = $.002
    • 30. Production: $30,000-$50,000
    • 31. Production Time: 2-4 weeks
    • 32. 30-second radio spot: $335
    • 33. Total: A LOT
    • 34. Potential Impressions: 138,600
    • 35. CPM = $21.89-$36.31
    @kkokoska // #schipulcon
  • 36. So Far…
    Where all that money goes
    Why it’s totally worth it
    How it stacks up against traditional media
    @kkokoska // #schipulcon
  • 40. 2.) Budget Planning Breakdown
    @kkokoska// #schipulcon
  • 41. We’ll Cover
    Ways to look at it
    In plain numbers
    Things to consider
    @kkokoska // #schipulcon
  • 42. Breakdown: By Category
    @kkokoska // #schipulcon
  • 43. Breakdown: By Platform
    Google +
    @kkokoska // #schipulcon
  • 44. In Plain Numbers
    Calculate 10% and 12% of estimated gross sales
    Multiply each by the markup (not margin) of your average transaction
    Subtract rent
    Take 10%
    @kkokoska // #schipulcon
  • 45. In Plain Numbers (cont.)
    Gross Sales: $5,000,000
    Markup: 100%
    Rent: $250,000
    Marketing Budget: $250,000 (10%) - $350,000(12%)
    SMM Budget: $25,000 - $35,000
    @kkokoska // #schipulcon
  • 46. Things to consider:
    What are your objectives?
    What is your overall marketing budget?
    How are your current efforts working?
    What are your resources?
    Social media changes – A LOT!
    @kkokoska // #schipulcon
  • 47. 3.) Ways to Measure ROI
    @kkokoska// #schipulcon
  • 48. A few truths
    It’s not a thing
    This will continue to change
    Fans outspend non-fans by up 5 times
    @kkokoska // #schipulcon
  • 49. Media Equivalent Value
    Equivalent Targeted CPM
    Social Media Impressions
    @kkokoska // #schipulcon
  • 50. Data Value (Acquisition cost)
    Data Value
    Acquired Customer Numbers
    @kkokoska // #schipulcon
  • 51. Avg. Fan Value
    Unlikes – per – Month / Total Likes = Churn %
    1 / Churn = Fan Lifetime Length (FLL)
    FLL x Posts-per-day = Opps-per-Fan (OPF)
    OPF x CTR = Clicks-per-fan (CPF)
    CPF x Conversion % = Sales-per-fan (SPF)
    SPF x Avg. $ per Sale = Avg. Fan Value
    @kkokoska // #schipulcon
    Dan Zarrella
  • 52. Be Flexible
    @kkokoska// #schipulcon
  • 53. Takeaways
    Social Media can be a major investment with a major payoff.
    Carefully evaluate your brand, resources and budget before getting started.
    Always Evaluate and Adapt.
    @kkokoska // #schipulcon
    Dan Zarrella
  • 54. Thanks! Any questions?
    Katrina (Scooter) Kokoska
    Schipul – The Web Marketing Company
    @twitter // #schipulcon // http://bit.ly/schipslides