Why social media marketing is not free

The invention of social media has been a boon for many micro, small and medium businesses (MSMEs), especially those who don’t have the requisite budget for large-scale, all-around marketing. While social media technology continues to evolve and proliferate, most MSMEs are yet to fully grasp the tenets of marketing in the digital space. The knowledge gap has resulted in little friction between small business owners and digital marketing agencies.

Most entrepreneurs, at least from my experience, believe that social media marketing is free. In any case, no one pays a subscription fee to join any social media platform. Though Twitter is thinking about introducing payment but nothing concrete as yet. .

An algorithmic change
However, as time went by, the platforms tweaked their algorithms. Currently, it's difficult for your posts to be seen far and wide if you haven’t promoted them, either through advertising or using influencers. Put simply, the game has changed, radically. .

Indeed, for you to get meaningful results from your social media marketing efforts, there needs to be a reasonable budget. Contrary to the beliefs out there, social media marketing is not a walk in the park. It takes so much more to achieve results. It requires dedicated effort, focus, and most importantly, investment in terms of personnel as well as finances just like any other worthwhile project. .

The costing rationale
In my practice, I have met entrepreneurs who would like to have a full package for just Ksh. 3,000 per month. As shocking as the figure sounds, they are dead serious and won’t budge even a shilling more. However, there’s a lot involved in successful social media marketing. It is not only about posting content. Let me paint a picture for you. .

In many digital marketing agencies, social teams comprise five core professionals. One, a manager who typically lays out the strategy for the brand and oversees all activities. Two, we have content creators, arguably the most important team members because, without them, nothing goes on. Agencies prefer outsourcing this to different, specialized freelance content creators. Three, a community manager who will schedule, post content, and respond to comments, enquiries, or complaints etc. Four, comes the media buyer who will carry out advertising to reach a wider, relevant audience, and execute campaigns. Lastly, five, we have the data analyst in charge of monitoring and measuring performance and providing recommendations for improvement. Depending on the accounts being handled, there can be several teams or assistants for each role. .

Clearly, a working group such as this will require a considerable budget for their remuneration. To cut costs, most agencies combine several roles, resulting in about two to three member-team. This is helpful in that agencies can reduce their monthly rate to benefit small businesses while maintaining a decent profit margin. Still, it’s quite something. .

Now, apart from the service fees that goes into fulfilling the business needs of the agency, there is media buying fees or advertising costs. Without making a budget provision for this, most digital agencies would rather turn down the entire engagement altogether. Because it will be impossible to achieve any tangible results (i.e., qualified sales leads) which all entrepreneurs would like to have in any marketing engagement. .

The cost for social media marketing is contingent on a lot of factors like the number of posts, nature of business, and the number of networks among others. A review of the Kenyan industry shows that fee ranges between from Ksh.50,000 and Ksh. 500,000 per month, inclusive of advertising. Whilst in developed markets, businesses invest upwards of USD 2000 which includes marketing and advertising on one or more networks — if outsourcing, social media services cost $900 to $20,000 per month and social media consultants cost $75 to $500 per hour. .

Final Thoughts
There you have it! I hope this puts things into context if you are an entrepreneur who has always struggled to understand the costing methodology for digital marketing agencies. Social media marketing is not free, instead, it requires significant financial resources for best results. Put differently, you need money to make money. Digital marketing and advertising are just like any other professional occupation that require time and resources, regardless of its virtual nature. As we embrace the digital marketing space that comes with technological advancements, it is best to understand the parameters of the industry. .

So, next time you approach an agency, you should be in a better position to understand how costing is done.

Stephen Osomba currently serves as the Lead Partner, Communication & Marketing at SMD Consulting Associates where he helps SME clients deliver value by adjusting the solutions to each company's mission, product, strategy, and industry.