Pay to Play: Seven Ways Social Media is Getting More Expensive

This article originally appeared on PRDaily and also on

For a long time, there was a perception that social media marketing was free, or at least very inexpensive. Starting a Facebook or Twitter account was free, and hiring a part-time intern to manage them didn’t cost much.

In reality, social media marketing has never been free. Sure, there aren’t usually any hard costs required to set up social media accounts, but someone is still had to create the content, engage in the conversation, monitor and manage those conversations, etc. As we’ve seen time and time again, turning over your brand’s reputation to an intern isn’t always the wisest choice. Most brands now know the real costs of social media marketing are not as great as the opportunity costs of bad social media strategy.

Fast-forward a few years, and we’re seeing more and more organizations hire entire teams to create content for Twitter, Facebook, Tumblr, Pinterest, and whatever hot new social media startup launched last week. Content marketing, the creation and distribution of content to attract leads and generate sales, has become a $118.4 billion industry. According to data from DOMO and Column Five Media, every minute of every day sees over 2 million Google searches, 571 new websites, and 48 hours of new YouTube video. It’s become overwhelming.

The social media arms race benefits no one

Unfortunately, it’s only going to get more difficult as brands compete in a social media arms race. Rather than creating a slow and steady stream of high-quality content, most brands believe they’re better off creating a ton of low-quality content in the hope that one or two pieces will have real results. Yet a recent study by InboundWriter shows only 10 to 20 percent of a company’s website content drives 90 percent of its online traffic.

Meanwhile, social networks realize that brands will pay big money for access to the millions of users in their online communities, and they’re going to charge more and more for that privilege. According to a recent Advertising Age article, Facebook reports: “Content that is eligible to be shown in news feed is increasing at a faster rate than people’s ability to consume it.”

This means the organic reach of any one particular piece of content is going to decline even more from the 16 percent rate it’s at now. Some may see it drop all the way to 2 percent.

Increasingly, to compete effectively in social media, brands realize that to play, they must pay.

To keep up with social networks’ efforts to monetize their massive online audiences, companies are allocating more resources to keep up. Simply creating valuable content and then authentically engaging with your audiences often is no longer enough, especially when you have to spend more to reach those audiences. Brands know they now must create distribution strategies for that content, sometimes at a substantial cost.

Here are seven ways brands will spend more money on social media and content marketing in 2014:

  1. Creating content. If brands wish to rise above the glut of content that’s being created, they’re going to have to improve the quality of content they create. That viral video that looks like it was shot on a family member’s smartphone was actually just a bit created by the “traditional” media.
  2. Promoting content. Expect social platforms to reward brands that spend a lot of money in ads on those platforms. It’s a vicious cycle. Paid ads and sponsored content will help drive the “organic” reach of your other content. In addition, brands with more Facebook likes are going to see a lower cost for paid distribution because paid social ads will show greater social context. If more “likes” and followers = cheaper ads, guess who’s going to start to investing in more contests, giveaways, and other tactics to reach more eyeballs and then subsequently buy more ads and sponsored content.
  3. Increasing reach. As brands acquire more and more fans, followers, and “likes,” and as these social networks get larger and larger, the cost to reach them will continue to increase. When a brand makes an investment in creating high-quality content, you can bet they’ll ensure it reaches the largest number of people.
  4. Syndicating content. Likewise, expect more dollars to go companies such as Taboola andOutbrain that specialize in placing content where it’s most likely to be discovered. In a sea of content, these companies help more people find yours.
  5. Monitoring, filtering, and analyzing conversations. Social media monitoring platforms have been around for years, but their hefty price tags often relegated them to a wish list for many organizations. However, as more people and brands create even more content, it’s going to become more difficult to identify and act on what’s relevant to you. As a result, pricey monitoring and analytics tools will be migrating from the wish list to the approved budget.
  6. Paid sponsorships. Those “influencers” you’re always trying to reach? They’re realizing their influence is in demand and that it’s not cheap. According to a recent IZEA survey, 61 percent of marketers have paid someone to mention their product, and that number is only going to rise in 2014. It’s not just celebrities and athletes, either. Everyday people are also asking for more money and more product, because they can and because brands will meet those demands.
  7. More full-time employees. As more content is created and more money is spent promoting and distributing that content, more people will be needed to create, moderate, measure, and analyze it. Demand for data scientists, SEO specialists, media buyers, and creatives will increase as brands try to optimize the money they’re investing.

If you thought the days of trying to persuade your bosses to invest in social media were over, get ready to go back, hat in hand, and ask for even more money. With bigger budgets come bigger expectations and more pressure. Are your social media, content generation, and content distribution strategies ready?

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Peter Sperry

The real danger for social media managers will come as big data analytics allow C level executives to follow the trail from initial investments in social media efforts to actual revenue for the organization. When executives fully realize the front end costs vastly exceed the backend revenues, social media managers will need to adjust their metrics, improve their deliverables or consider new career options.

David B. Grinberg

This is an interesting post, Steve, very well researched and written.

How do you think this social mediation situation may impact gov, if at all?

Also, do you have any thoughts on what gov agencies are doing right and wrong on social media?

Your expertise is appreciated. Thanks!

Thanks so much, Steve, and good luck with all of your work there in the Windy City.


Steve Radick

@Peter – this coming focus on big data is something I talked about in my last post. In short, big data will likely cause more problems than solutions, at least when it comes to marketing. We still have to remember that we’re marketing to people, that behind those Tweets, there’s a person. Relationships and conversations can’t always be distilled down to numbers.

Steve Radick

@David – I think there’s going to be real challenges in the government space. What this means is that those budgets that you’ve had to scratch and claw for are going to be less and less effective. Those fans and followers that you’ve worked so hard to acquire will see less and less of the content that you create. It’s going to be imperative that government communicators move away from output-based metrics (number of fans, likes, followers, etc.) and move toward outcome-based metrics (conversions, awareness, engagement among a target audience, etc.). Accordingly, there will be more time and effort spent on internal communications and education for these social media managers to make sure the budgetholders understand this and that the senior leaders understand the role that social plays. Numbers will not be the friend of the underfunded.

Peter Sperry

Steve — Basic equation of organizations is that value out must exceed value in or their is no point in the continued existence of the organization. Profit making organizations ultimately measure value in terms of costs vs revenues. If social media is not generating revenues in excess of costs, what is the value to the organization of all those relationships and conversations? Similar metrics can, and will, be applied in the government space. Can social media be linked to positive tangible results or not. Does it help reduce crime, improve education, defend the nation, clean-up the environment etc.

As a government budget analyst, I have a motto posted on my desk reading “Budgeting first and foremost allocates resources efficiently to achieve organizational goals effectively. Everything else is bookkeeping.”

Social media must, and can, pass that test. There are many anecdotes describing how social media has been deployed in government agencies to achieve goals more effectively with a more efficient allocation of resources. I believe more is possible. But fluffy metrics like conversions, awareness and engagement are meaningless for budget decisions. We need more solid data linking the actions of the social media program to the outcome goals of the organization. Otherwise, we have a professional obligation to recommend allocating resources where they will be more useful.

Peter Sperry

Steve —

Dannielle Blumenthal posted a textbook example of integrating social media with other IT tools to achieve organizational goals. I am not sure precisely what metrics she will use in budget discussions but I there are several that could prove useful. (increased citations in professional journals etc). Any competent budget analyst can look at Dannielle’s slide, see where social media fits in the process, recognize the potential value and sign off on at least a pilot program (I would go straight to rollout).

Finding and using solid metrics to link social media to organizational goals may take some work but not as much as many fear.

Steve Radick

@Peter – don’t get me wrong, I definitely agree that the ROI of social media use can and should be tracked. But as Felix Salmon details in this Wired article, there’s a danger in trying to quantify everything. When the budget analysts – no offense 🙂 – gain too much power, every conversation, every effort, every person gets reduced to a number. And, that’s no way to build and manage relationships. It’s a delicate balance. If anything, I think this post and my last post make it clear that the budget folks and the social media folks are going to have work really closely and better empathize with each other, if they aren’t already.