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Justifying social media investment

This step describes methods for justifying social media costs.
Whilst the media element of your budget can be precisely tied to commercial metrics such as purchases, the production elements can appear to be ‘sunk costs’, meaning that they cannot be recovered or returned as income.
This is nothing new in marketing, as all marketing requires content in some form. However, in today’s digital world where more of the budget goes towards production, this can seem difficult to justify.
“Why should we spend £10,000 on producing an entertaining video?” is a question you need to be able to answer. There are some key components you should consider before answering.

Case studies

Today, social media is a solid, established marketing channel. You will almost certainly be able to find a case study of successful use of social media within your industry. Showing what a competitor or similar business achieved through social media can be a compelling part of your answer.
Vodafone created a new product line to attract a 16-24 years old audience. Their social media strategy was to invest in influencers. The results were visible, with their content being viewed over 31 million times on social media, and achieving an increase of zero to 31% awareness in the target audience.

This is an additional video, hosted on YouTube.

Good content > media spend

AutoTrader invested in giving the product away, rather than expensive advertising slots during the World Cup, trending in the top ten for the UK on Twitter after every goal.
Over 250,000 sessions were driven to the campaign landing page, and 41% of those visitors remained on the Auto Trader site, 22% of whom went on to search for a new car.
Whilst paid media reports a cost per acquisition (CPA) – which makes it easy to track ROI on, high-quality content tailored to your audience will achieve things that paid media never could. Getting seen – and shared – because people love what you are posting will always trump getting seen because it was forced in front of people.
Influencer value
You should demonstrate that content designed to be of value to the end user rather than a promotional ad is a highly effective tool for engaging influencers and developing long-term relationships with the tastemakers in your niche. Doing this without the content is almost impossible.
Success measures – you will need to tie your activity to KPIs
ROI is the key success measure to justify investment in social media. Now that you have your budgets (investment) all worked out, you are on the path to calculating your ROI. There are many considerations for ROI, which we will go into much more detail in the Determining ROI Lesson.
It is useful to try and see the bigger picture, outside of clicks, conversions and attributions. Does your company track NPS? (Net Promoter Score – a metric that measures the willingness of customers to recommend a company’s products or services to others) What about Customer LTV? (lifetime value – i.e. the value of all purchases they’ll likely make over their total lifecycle). Show how your social media activities each contribute to these business goals in as specific and pragmatic a way as you can, avoiding unqualified statements and jargon.

Join the discussion

Nowadays, organisations and brands have to invest time and money into social media to truly engage with customers. In what ways do you think spending on social media has changed in recent years? Which channels have become more popular and, thus, more expensive? Write your comments below.
Use the discussion section below and let us know your thoughts. Once you’re happy with your contribution, click the “Mark as Complete” button to check the Step off, then you can move to the next step.
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How to Develop Your Social Media Content Strategy

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