How to save your butt when the social media bubble bursts

I am going to go on a rant. But first, while I still have my composure, allow me to tell you a short, yet relevant, story.

I started my corporate career in the midst of an economic downturn for my industry.  I was working for a Fortune 100 company and to get through this difficult time, the company brought in an outside consulting group to conduct a little exercise called “Overhead Value Analysis.” Simply put, every person from the adminstrative assistant to a vice president had to stand up in front of a group of strangers and justify their existence by explaining how they were contributing to shareholder value.

This was a very stressful exercise, especially for a young man who was still finding his way to the water cooler.  But thankfully I was always a numbers geek and could pull out a chart (probably drawn by hand in those days) to show what I was doing, why I was doing it, and how what I was accomplishing was tied to the company objectives. This was an important lesson in my young career and one that has always served me well through many downturns along the way.

So when I hear another round of gurus pontificating last week about the unnecessary annoyance of measuring social media activities I want to shake somebody. I am so very sick of people who have never had to work in a corporate bureaucracy or manage through a budget crisis explain that measuring social media is like measuring your mother, or your pants. Here’s another one that drives me nuts: “The ROI of social media is that your company exists in five years” … again implying that you need to do social media, just because you need to do social media. Bullshit.

Don’t you believe it. You MUST keep measuring, assessing, adjusting, improving.  Never get caught with your stats down.

At some point in the life of every company, there will be a financial imperative to slash overhead costs. The bubble always bursts, at least in a free economy.  When that happens, everything will be evaluated under the icy glare of number-crunchers — do we cut or not cut? This is the day of reckoning that defines the ”implied economic value” of any effort. Even something as seemingly mundane as social media. You better be able to articulate a business case, and it better be something better than page views and Klout scores, Bub.

Why? Social media is NOT FREE. Every economic activity in a corporation directly or indirectly has to contribute to shareholder value.

Let’s look at how “un-free” social media really is. Let’s assume you have one person working full-time on social media marketing. We’ll assign that person a salary of $60,000. In a typical company, standard health, 401(k) and other benefit costs equal another 50% of the base salary, or in this case, $30,000.

We’ll assign another 20% of base salary for overhead such as office space, shared services support and technology. That’s $12,000. We won’t even address travel, training, or bonuses.

So, our minimal full-up cost for one social media professional is $102,000. As a business owner, are you willing to spend more than $100,000 per year without requiring any accountability for a return? What kind of a company are you running?

I’m a practical guy. I know it may be cost-prohibitive or even impossible to determine the specific ROI of your efforts. Sometimes you need to look at qualitative tools for social media measurement. But there is no excuse for not tracking key measures that contribute to your company’s goals. To support your credibility, your long-term viability, and your personal career in social media marketing, YOU MUST MEASURE. 

This is an emotional topic for some, but it shouldn’t be. This is basic business common sense.  Are you with me on this one?

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