There is a misconception that Social Media Marketing is free, easy and cheap to do. This misconception can lead to poor results and missed opportunities for brand owners as well as digital media practitioners. While creating accounts on Social Networking services may be free to do in many cases for individuals, there are a number of real costs involved when it comes to creating social media constellations that deliver value and return on investment for larger organizations.
I was recently quoted in Malaysiakini (paywall) saying that Tourism Malaysia's RM1.8million for a Facebook page was "a bit too much". Since this is such a hot issue in Malaysia right now, and one that can have ramifications on social media budgets around the country, I feel that it is important to clarify and contextualise my comments.
My first response to the journalists' line of enquiry was to state that each Facebook campaign is different, and the cost should be dictated by a) what you aim to achieve, b) in what period of time, and c) with what budget. The costs may include consulting, design, development, application hosting, management and advertising among many more.
I did state very clearly that if Malaysia tourism is investing a lot of money in developing and hosting applications for their Facebook pages, that they would likely be spending their money on Facebook and Google ads. Ads are necessary expenditure if you want to drive a lot of visitors to your Facebook page over a short period of time. By the way, some companies pay as much as $8 per fan on their Facebook page.
The statement that the average social media campaign costs $30 000 per annum is ridiculous and I was quoted out of context here. I was referring to one of the fixed costs of doing social media marketing: the annual salary of a Social Media Administrator. If you want a more thorough breakdown of social media spend, see this infographic based on Focus research. It shows that average total spend per annum among companies who use Social Media is currently $210 000. Now, I wonder how many of those companies are national tourism ministries responsible for generating RM56billion per annum? Let the budget match the reward.
Here's the basic sums to work-out the rough break-even numbers on this particular Facebook page:
RM1 800 000 (total budget)/RM2500 (average spend per tourist) = 720 (number of people who need to be convinced to come to Malaysia per Facebook page)
720 (visitor target - see above) / ±3% (guesstimate average Facebook Page conversion rate) = ±24 000 (fans needed for the page to break-even)
With only one application out of six launched, there are already 34 000 fans of the Facebook page. Now the question is one of efficacy in converting those fans. This should be easier than with traditional media due to fact that once someone has "liked" your page they will continue to recieve updates from you. In fact, recent research has shown that advertising to Facebook fans instead of non-fans can reduce the acquisition cost of registrations by 44%, event signups by 33%, and purchases by 15%. As a bonus Facebook Pages also provide demographic insight into who the fans are, which can inform campaigns across other media too.
Lastly, one quote in the article said “(The Facebook page) should be connected to other things, like TV perhaps" - while this is a good point that media spend should be co-ordinated and cross-polinate, what I actually said was closer to the spend on the Faceook page "should be compared to other things, like TV perhaps". The point being that RM1,8million is a small fraction of tradtional media spending (e.g. producing and placing TV ads). In fact the budget per region for Malaysia Tourism is RM30million, the region is among the world's top Facebook using countries, and so perhaps the question should be "why isn't more being spent on this?".
Malaysia's Tourism Minister YB Dato’ Sri Dr. NG Yen Yen has expressed a similar sentiment (with facts and figures too) on her blog. These views are my own, although I did consult with the Minister subsequent to the article being published to find out how the budget was being spent. I will be attending a press conference in Kuala Lumpur today with the minister, but I'm also very happy to discuss further in the comments below or on Twitter.