Certain social media activities (blogs, Twitter, Facebook, etc.) can provide tremendous value to companies for very little cost, especially when compared to traditional advertising. If done right, social media can give your company a voice that people will pay attention to because they want hear what you have to say, and the costs can be significantly lower than some of the other options.
I’ve been a little concerned about my timing for starting a new consulting practice. I launched the consulting arm of Fast Wonder on June 23rd, and as everyone knows, the economy has recently taken a turn for the worse. As soon as the economy tanked, I had a couple of smaller clients pull out of deals; however, I’ve noticed an upswing over the past 2 weeks in people calling or emailing me to ask about my consulting services.
Yesterday, I came up with this hypothesis: Companies are pulling back and reassessing their strategies and spending in light of the economic situation. During this reassessment, some companies are deciding to increase their social media presence as a way to stretch already thin budgets. Even with consulting fees to help them get started, they are still spending a lot less than they would for even a single, small, traditional marketing campaign.
I put this question out to my Twitter followers on Friday:
Here are the responses:
- PDXsays: @geekygirldawn Affirmative
- wickedjava: @geekygirldawn completely think they are moving that direction because it’s more cost effective.
- donmball: @geekygirldawn Maybe you’re just good at what you do. There’s always that!
- MelWebster: @geekygirldawn Not sure, but as a small PR boutique, we have also seen an uptick lately in consulting opps.
- unclenate: @geekygirldawn I certainly see the shift happening, PR 2.0 is making an impact. Most seem stuck on the ROI and value measurement question.
- becnavich: @geekygirldawn I know i’ve seen a few blog posts on why companies SHOULD be turning to social media, but whether they will or not…?
- msamye: @geekygirldawn Great topic for this afternoon’s @beerandblog.
- jmelesky: @geekygirldawn i saw a move towards pay-per-performance in the ad space during the bust, so it wouldn’t surprise me if social is a new focus
- Justin Kistner (on Facebook): I’m in talks with a company now is reallocating a large amount of their marketing budget to social media because they’re looking for more cost-effectiveness.
I also know that inquiries are not the same as deals, so the jury is still out on this question. I’d be curious to hear if other consultants have noticed the same trends? For those of you working inside of companies, is your company making any changes to their social media strategy in light of the economy?
I think the economy may have an effect on companies reaching out for newer social media strategies. There can be large ROI from these plans even if it can’t always be measured. I also think that there is an increase in education and understanding of different social media tools out there which is why more companies will be asking for consulting. It is a great way for a company to have an overall crash course in social media to learn about and eventually execute on their own. I think increased awareness may be more of the reasoning than the economy.
Craig
http://www.budgetpulse.com
You are right on the money with your assumptions. I have been integrating more social media into marketing campaigns than ever. In my view, social media takes advertising from telling the target to asking them to join. Because of the relative infancy of the sector, business and marketers can get exponential results from low to no cost tools provided by start-up websites (although some results are still difficult to measure). I see the playing field flattened for small businesses by websites such as Yelp, Facebook and Twitter. Users are deciding the relevance of the business, not the size of the marketing budget and the message is being sent out over activity aggregates. I can see social marketing playing a very large roll in PR and advertising as businesses must become more creative with awareness campaigns.
Not to belabor the point, but take for example the Obama/Biden Campaign. There was constant messaging about campaign activites and calls to action for contributions. I think businesses should look very closely at the Obama/Biden playbook when deciding where to allocate their marketing efforts.
I do agree that more and more companies are at least interested in pursuing a social media strategy. For small or home based businesses, I also see the playing field being leveled, but for many its still a source of frustration on how to actually use it for thier benefit.
Reading a post by @davidmihm this weekend regarding a “Learn About Web” conferance in the Tri-Cities, its enlighting to see that even now, alot f small businesses dont know the tools available to them. (Post was from a web marketing / SEO point of view, but I believe these stats would carry across to social media?)
http://www.davidmihm.com/blog/smbiz/what-i-learned-about-web-on-friday/
From the post:
Several attendees hadn’t heard of LinkedIn. One specifically asked Jennifer how to spell it.
No more than two out of ~80 attendees were currently doing any kind of linkbuilding for their websites.
Only ~15% of attendees had heard of Yelp.
Less than 50% had heard of Twitter.
and the kicker: barely 50% of the audience even knew what SEO meant
continued “…this was a motivated audience interested in web marketing, giving up an entire day to learn more about it! Most of them would probably make great clients.”
So we see that there is a growing interest in this type of marketing, but I sometime think that by being plugged into this field every day we forget that we might still be in the minority.
Sean
Hi Dawn-
I too agree with you and the other commenter’s: more companies are investigating social media and looking at opportunities to leverage these outlets. However I’m not entirely convinced that ‘cost savings’ is the primary catalyst driving our investigation and usage of social activities. While it’s true that costs of social media can be lower than other options, I’m not seeing this as an either/or decision. I’d argue the main benefit of social media is that it (potentially) brings us closer to our customers.
Recently, the company I work for, SAS, teamed up with Peppers & Rogers Group, and Harris Interactive (formerly, Jubelirer Research) to conduct a study of the current state of customer experience management within Fortune 500 companies. Their findings confirmed that companies with better customer experience management capabilities, along with a strong customer orientation, enjoy a real competitive advantage over other companies in their market.
Social media takes us to our customers and prospects. It connects us. It allows us to engage in conversations, in dialog. We build connections and trust. And we learn and grow together. Idealistic? You bet. But it’s difficult to argue against a customer-centric approach to marketing, enabled largely by social media outlets.
The real ah-ha that came from the research I mentioned above, was that the companies who reported outperforming competitors also reported plans to spend *more* on future investments in customer experience capabilities.
At the end of the day, Gross Profit is Gross Profit. But, philosophically there is a difference between viewing social media as a cost cutting initiative, and viewing social media as a profit growing initiative. It’s my belief that companies who subscribe to the latter philosophy will come out ahead in the long run. What do you think?
Justin – it’s great to hear from you! You’ll have to drop me an email and let me know how things are going!
I absolutely agree with your comment. There are many reasons for jumping into social media (and most of them are better reasons) rather than simply to save money. I should have been clearer about this in the post. I’ve been working with companies trying to build better relationships with customers and engage in productive conversations with people way before the economy started having issues. The difference I am seeing now is that more companies seem to be using cost savings as a primary reason to engage in social media right now. For companies who were already getting close to jumping into social media, some are making the leap now.
Companies I have connections with in the area (being Portland of course and a few in Seattle) are spending a LOT less on traditional advertisements such as newspaper and TV media and are slowly ramping up spending on Internet media. One of those pieces is social media efforts.
For instance, I think the shift is pretty pronounced so far, but am not sure as much will be put into social media until there is a clearer identifier for business to find ROI. Which I’m sure many realize isn’t easy to convince some of the more “old skool” types in business. Just to toss a first hand experience out there, I’ve seen traditional media at one company decline approximately 95% and social media budget increase over 250%. Mind you, that meant the traditional media expenditures went to almost zero and the social media budget went from almost nothing to a dedicated funding level. This definetely bodes well.
Over the next few months, depending on other economic queues, I expect to see this trend continue, albeit at a slight less extreme pace.
Hi Dawn
Great post, it inspired me to do a post of my own on our blog.
From my point of view i think we maybe experiencing a positive side effect from the current market conditions, brought on because marketing spend must be carefully allocated and measureable, and encouraged by a growing understanding of social media.
However, it’s far too early to say if this trend will continue, and if the worst of the economic issues are yet to be revealed it’s certainly not something we can celebrate yet. However, it’s good to know that the positive signs are there.