After my last post on the Media Budget Ratio I got a question out on the Marketing 2.0 community by Scott Zosel about how much should you allocate for Social Media in your budget?
Great question Scott and you inspired me to write this post. So here it goes.
The cost of the technology used for social media is rather low. Take for example – a blog – costs next to nothing, a podcast can cost btw $0 and $2000 on the high end, a video can cost btw $0 and $10,000 – $15,000, a wiki can cost about $6500 a year, a community can cost btw $0 (Ning) up to $100,000 a year for a private branded community.
So unlike traditional media …. Print, TV and Radio – which can cost big money. Social media’s upfront costs very little and we actually use money within my team to experiment with so we A) get a better understanding of the technology and B) start to understand how we can use it and measure the results along with all the other media we have.
Ok but the real cost (again unlike the traditional media stuff) is in Content Creation to fill up those social media / new media channels – here is where the cost can get large. I happen to think I am very fortunate since I work at a consulting firm where many people are thought leaders – so we have no shortage of opinions 
So to recap – I would say (as I did in my post on the Media Budget Ratio) that traditional media should run you now 2/10s of 1% of revenues and your Social Media Budget Ratio should be at least 25% of your Traditional Media Budget (including content!)
Tags: Social Media
Very good post.
I would add that it makes sense not only to budget for the tools you’re going to use, but for people to run them.
This investment is missing from a lot of unsuccessful social media effort. You need people who’s job, specifically, is to make sure your efforts are reaching and engaging the people you need to reach.
@ Richard
good point Richard and thank you for commenting
You cant have someone dabbling in this part time – it wont work
dedicate a member of your staff and go for it!