The Costs of “Free” Social Media to SMBs

Summary: About one-third of SMBs are spending an average of $845 per month to manage their social media messages, according to new research from cloud marketing company Vocus.

Heather Clancy

By for Small Business Matters | September 25, 2012 — 22:55 GMT (15:55 PDT)

Social media marketing is referenced often as an especially cost-effective tool for small businesses.

Even so, 36 percent of small and midsize businesses (SMBs) spend an average of $845 per month on tools or cloud services for managing their social media accounts, according to a new survey sponsored by Vocus.

Another 32 percent of those surveyed on behalf of Vocus said they spend $1,000 or more on social media management, while 22 percent are outsourcing these functions to someone else (the amount of that investment wasn’t given in the materials I reviewed for this post).

The average number of tools used by the SMBs to deal with social media accounts is three, while social media activities represent about 25 percent of the respondents’ overall marketing mix, the data show.

The research conducted by Duct Tape Marketing has an error ratio of +/- 4.9 percent.

“What I’ve been noticing more and more is there’s finally this acceptance that social media not only isn’t going away, it’s an essential element of the marketing mix and the real challenge now is to figure out how to integrate it into the total online and offline marketing presence,” said John Jantsch, marketing consultant and creator of Duct Tape Marketing.

Here are some other findings of the research:

– 76 percent of the respondents use referral traffic to their Web site or e-commerce platform as the primary means of measuring social media’s effectiveness

– 87 percent believe social media has been “somewhat helpful” or “helped a great deal”

– 40 percent are focusing on a small but highly engaged audience

– For 91 percent of the respondents, the most common use of social media is information sharing

Personally, $845 per month seems like a lot to spend for an especially small business or sole proprietor. But if you consider where else that money might go — newspaper advertisements, flyers and such — as well as the high potential impact of social media engagement, the investment makes more sense.

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