Social Media Will Get Real Budgets

In our 2010 trends post we mentioned that social media marketing will start to get real budgets. Every marketer who hasn’t been hiding under the rock for the last several years has noticed that something important is happening.

In a recent MarketingSherpa study almost half (49%) of the respondents say that they believe that social media will eventually produce ROI. Seven percent of respondents already see ROI and intend to increase budgets as needed to get better results.

Emarketers Debra Aho Williamson estimates that paid Facebook advertising will grow 39 percent in 2010 and reach 605 million dollars worldwide. The total spend on social network advertising would grow to 2.2 billion dollars worldwide and 1.3 billion in US.

social media budgets 2010

But that is only paid advertising. In social media adaption paid ads are only one step and not very social at that. So we expect to see a lot more budgets to be earmarked for social media marketing. Building communities, setting up Twitter accounts and Facebook fan pages, creating content, capturing leads, measuring results. There are a lot of way to spend on social that will be hard to measure or classify.

We believe that bigger chunks of media and marketing spend will be channeled to payroll to hire community managers, bloggers and other specialists who are a key ingredient to make social media marketing really social. This in-house part of the social media spend may take up to two thirds of the budgets. This means that the total social media spend may be more than 7 billon dollars in 2010.

In the same category the payroll will finance social media when engineers talk directly to consumers and support personnel answers customer questions on Twitter or Facebook. As the organizations start to open up, more and more of social media interaction will be an integral part of employees daily routine and this way “social media budgets” may look smaller than they actually are even if we include in-house.

Higher budgets mean higher level decision-making. This will probably mean that some budgets will increase simply by added frictional costs of meetings and consultants. But higher level decision-making will also put pressure to produce real and measurable social media ROI.

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Priit Kallas

Priit is the founder and CEO of DreamGrow Digital, an internet marketing and social media company. With his 20+ years internet marketing experience he is Helping companies to understand and use the digital marketing to reach their target audiences. He's also writing on a personal growth website He has spoken at hundreds of seminars and conferences on different aspects of internet marketing. Priit is also the organizer of Digital Elite Camp, a leading traffic and conversion event.

5 Responses

  1. Priit Kallas says:

    Thanks for your comment James. The budgets will come from all the sources you mentioned. We will be using social media as a channel for each of those. So some of the PR, marketing, etc budgets will be spent on social media. For example: if we create an application for Facebook or iPhone that serves marketing purpose, is it IT, social media or marketing.

    I believe that a major part of social budget will be in the form of salary expenses. A lot of social interaction will be carried out in-house by existing employees or additional people hired specifically for social media jobs.

  2. James Gurd says:

    Hi Priit,

    I think it’s inevitable that social media starts to get a dedicated budget but which pot do you see this coming from?

    For me there are several logical contenders:
    (i) Marketing – online marketers using social media to drive engagement and seed key campaigns to drive traffic/revenue
    (ii) PR – integrating social media with your overall online/offline PR strategy to increase brand awareness and company profile
    (iii) Customer Services – using social media to monitor brand reputation and customer comments whilst providing customers with another service channel tied back into the central CS framework
    (iv) IT – investment in social media technology and platforms and integration of this into other internal systems including CRM/Analytics

    I’d be interested to hear your thoughts on this.


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