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What Social Media Actually Costs

A Procter & Gamble chief defends marketing cutbacks by referring to the less expensive benefits of digital marketing. Um, really?
The Old Spice campaign was a viral success--but it wasn't cheap.
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When was the last time you chose to work for free? Last time I looked, that wasn't called "work"; it was called "volunteering" (or, for college students, "interning").

So why is it that over and over again we hear social media described as "free"? That reference really gets my goat. That's like hiring a publicist to get you "free PR" -- did your publicist work for nothing?

Why I'm riled up: News emerged recently that one of the world's largest advertisers, Procter & Gamble, with an annual ad budget of about $10 billion, would be eliminating "1,600 'overhead' or nonmanufacturing jobs, including some in marketing," deferring to "digital marketing to help contain media spending long-term." P&G's Chairman-CEO Bob McDonald went on to credit the "1.8 billion in free impressions generated by the Old Spice campaign in recent years." He also claimed that with "things like Facebook and Google and others, we find that return on investment of the advertising when properly designed, when the big idea is there, can be much more efficient."

Now, I'm a digital proponent, so you'd think I'd be all over this as great news. But here are the problems with it.

1. It Sets the Wrong Precedent

To suggest that social media is free or leads to free exposure is misleading—and, often, wrong. No one disputes the brilliance of the viral Old Spice campaign, but all those "free" impressions still came with a price. First, P&G had the ability to hire one of the most innovative ad agencies (Wieden + Kennedy)—and you can be sure that didn't come cheap. A team of very smart and creative people had to take time (and time is money) to conceive of, script, produce, and ultimately distribute these "non-ads."

In order to ensure these clever, must-see videos starring a hard-to-resist hunky guy (Isaiah Mustafa) were actually watched online, the agency purchased strategically placed media spots, the bulk of which were on broadcast and cable TV. These spots and the ensuing viral firestorm were supported by Isaiah's appearances on late-night and radio shows as well as his own overnight talk show. So how much did all this "free" social media cost? One industry insider pegged it at $10 million to $15 million.

2. Too Many 'What Ifs'

P&G CEO McDonald hinted at the "what if" problem when describing digital advertising. (See his reference to "when properly designed" and "when the big idea is there.") And he's still disregarding half of the equation. I would add, "... and if the idea is well-executed, if we have clear ways to measure it, and if we can compare its results accurately against those we've achieved elsewhere."

Oh, and it doesn't hurt to already have an established, well-known brand.
When you take all of these variables into account, suddenly this doesn't sound like such an easily replicated thing, does it?

3. Good Marketing Should Be Integrated ... Always

I'm a digital marketer, but I know better than to believe digital can stand alone. Even as it becomes more important, it's still just another tool in the toolbox. Different products call for different strategies and different mixes of these media and marketing tools at any given time.

P&G's CEO likely recognizes that digital marketing and social media aren't free. My issue is that business leaders also bear responsibility for the words they use and the way they'll be interpreted by other businesses around them. That includes businesses with less exposure to and less experience with social media than a company like Procter & Gamble—with less brand awareness and far shallower pockets. It would help all of us in the business of digital marketing if corporate CEOs chose their statements more wisely.

Last updated: Feb 16, 2012

HOLLIS THOMASES | Columnist | President & CEO, Web Ad.vantage

Client advocate, digital strategist, and thought leader Hollis Thomases, founder of Web Ad.vantage, helps companies navigate the complexity of the ever-changing digital marketing landscape and develop digital strategies.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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