Where Will Social Media Budget Flow to in 2010

4 February 2010 540 views One Comment

Time really flies. It’s already the second month of the new year and many of you know that this year is going to be the year of social media marketing. From my previous post, we know that SMEs will devote more marketing budget to social media instead of traditional media. But where will the money go? Well, in this post, we will explore some of the avenue where social media budget will flow to this year.

Retail and Ecommerce

The chart below gives you an overview of a dramatic increase in social media budgets across all the industries and how each industry compare against each other. This chart also shows you that retail/ecommerce is stepping up to the plate this year with 79% of marketers in that category increasing social media marketing spend in 2009. For marketers who market in this industry must also realize that there could be more competition within the space and that would determine the social effort they wish to be involve in and how they can break through the noise.

Facebook Will Be The Main Avenue

This year, social media networks budget will begin to flow to the social network of choice, Facebook. The chart below give you an a reason why. In 2009, MySpace recieve $490 million in advertising. E-Marketer however, predict that it will decrease to 21% by this year. On the other hand,, Facebook will increase it’s advertising revenue by $39% in 2010. With this growth, Facebook will also be force to develop services for the brands to justify the advertising budget as well as new opportunities to engage their fans.

In House Budget Will Go Up

According to e-Marketer, about 60% of social media budget will go into staff salaries for blogging, content development and monitoring of social media channels. About two fifth will be spent on outside help such as agencies, consultancies and service providers. This being said, if you are allocating a budget for social media, don’t just allocate all internally or all to a social media agency. Consider hiring at least 1 social media manager and then an agency to help spark some ideas and implement the concepts.

Expectations of Social Media Will Rise

Along with the rise of social media budgets, also come a rise in expectations. CMO’s concern this year will be the measureable ROI. An article produce by MarketingProf’s called “CMO’s Want Measureable Results from Social Media” noted, “Nearly three out of four CMOs (72%) who did not attach revenue assumptions to social media in 2009 say they will in 2010, according to the survey; in addition, 64% of CMOs say they plan to invest more in social media in the next year.”

As these expectations rise, how marketers begin to associate revenue with social media marketing will be important. In my opinion, before budgets are allocated toward social media, companies should conduct research around their sales funnel, and identify the key performance indicators associated with overall objectives. This is especially important for marketers who don’t have e-commerce functionality, and therefore need this data to make the connection between online activities and offline purchases.

This research should help figure out important questions like:

Does your product require education before purchase?
Does the general public know that your product (or the category of your product) even exists?
Do they use search engines to find answers? If so, how?
How have your current consumers been persuaded to try your products?
Does an increase in site traffic typically lead to an increase in sales?

This just barely scratches the surface of the very important question, “How will I know I’m successful?” We hope to explore more into this in the next few posts.

Do you have any predictions to add to this list? If you are a marketer, how are you changing your social media budget allocations in 2010?

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