Tactics & Tips: December 2007 Archives

Does Social Media require its own budget?


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Its hard enough to do budgeting without having to worry about social media budgeting. How much should you invest in social media? And where should those investments go? Into resources, infrastructure, Second Life islands, Facebook applications, social ads, blog reading or training? How do you know how many resources you'll need without knowing how successful your consumer engagement activities maybe?

Knowing how much to budget is difficult. This is especially the case if you have only made tentative steps into the social media domain. Here are some guidelines to consider as you put together your 2008 budgets -

1. You can't have a budget without a strategy. If you don't have a strategy for engaging in the social media space, then don't really bother with a budget just yet. You need to really first think about where your customers are, what they're doing, how you want to participate in the conversation and what value you can bring to it. If you haven't thought about those things, you're not ready for a budget. Peter Kim has a few good questions that you need to consider too.

2. First impressions matter a lot here too. Don't just experiment for the sake of experimenting or because you're feeling left out. First impressions matter an incredible amount in the social media domain. Why? Simply because those that participate in the conversation are typically the most critical. You don't want to screw up. Everyone will talk about it for a while. Just ask Walmart about their Facebook efforts to understand this.

3. Thinking about social media annually is a mistake
. The fact of the matter is that social media requires a nimbleness that annual budgeting doesn't really support. If you find your customers gravitating towards a specific social network or are seeking a specific application that you can provide, you need to be ready to serve them the next week and not the next year. What does that mean? You need room in your budget for these short term activities

4. Ask your bosses for a little more flexibility. Just take a look at the Facebook Beacon (mis)launch to see how advertising platforms, formats and revenue models are changing. As you budget for 2008, think about whether you're educating your bosses about social media. You need to tell them that its in a state of flux and knowing where exactly to invest (and how much) is hard. They need to give you a little more flexibility with the budget than they're used to giving.

communityvsbudget.jpg


No organization can survive without a rigorous budgeting process. To believe that social media lets you go budget free and keep asking for money during the course of the year is naive to say the least. However, by educating your budget approvers about the social media domain, thinking carefully about where your customers and what percentage of your customers are participating can serve as a starting point for creating a social media budget.

The good news? Some of your employees are probably excited about social media and may offer to help informally when you're next trying to launch a program. Also, the more successful your community and social media efforts, the less you have to do. This Community ROI graph from Creating Passionate Users says it all.

About this Archive

This page is a archive of entries in the Tactics & Tips category from December 2007.

Tactics & Tips: February 2008 is the next archive.

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