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How Much Should Companies Invest in Social Media Marketing?

by Byrne Anderson
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Digital marketers have a lengthy list of tools at their disposal, tools that previous generations did not have access to. One of them is social media. Marketers can utilize platforms like Facebook and LinkedIn to reach exponentially more people than ever before. The question is how much a company should invest in social media marketing as compared to other avenues.

If you ask a digital marketer, you are likely to hear nothing but praise for social media. On the other hand, traditional marketers who have been forced to grudgingly embrace digital technologies may not be so enthusiastic. Marketer opinions notwithstanding, companies have to determine their investments in social media on a case-by-case basis.

For purposes of illustration, consider a health insurance broker and a local restaurant owner. Both certainly have opportunities to utilize social media marketing. But because their businesses are so drastically different, their investments in social media should be different as well.

B2B and B2C Needs

It seems that the place to start is looking at the two types of businesses represented by the insurance broker and restaurant owner. A health insurance broker doesn’t sell products to individual workers. They sell them to employers. That makes their operation a business-to business (B2B) enterprise. On the other hand, the restaurant owner serves consumers directly. Their restaurant is a business-to-consumer (B2C) enterprise.

Why does this matter? Because each social media platform targets a different set of users. There is little point to investing in social media platforms that do not reach a company’s target audience. Indeed, employing the scatter gun approach to social media marketing is to ignore one of the primary benefits of marketing in the digital universe: being able to target very specific demographics.

Understanding All the Options

Both the insurance broker and restaurant owner are best served when they fully understand all of the options. What are those options? BenefitMall, a Dallas general agency that supports health insurance brokers nationwide, mentioned the two most commonly utilized platforms in a recent blog post on the same topic:

  • Facebook – A fantastic tool for reaching a large audience. It is more appropriate for B2C enterprises.
  • LinkedIn – Similar to Facebook except that is designed for business professionals.

It wouldn’t make much sense for an insurance broker to invest heavily in Facebook at the expense of other social media opportunities. To the extent that they do use Facebook, it would be primarily to help foster relationships with HR managers and business owners who might eventually be looking for health insurance products. For the most part, the insurance broker’s efforts would be better put into LinkedIn.

Likewise, the restaurant owner might engage with LinkedIn as a means of establishing relationships with other business owners. But by and large, their target audience traffics on Facebook. Their social media marketing efforts would be more appropriate there.

Not All Are Useful

Moving beyond Facebook and LinkedIn, there are other social media platforms that companies could engage with. Not all are useful. For example, is Twitter still worth investing in? Growing numbers of digital marketers say no. How about platforms like Pinterest and Snapchat? Even YouTube and Vimeo are on the table, though they are not technically social media platforms.

Alternative social media platforms like Gab, Parlor, and Mewe appeal to some companies trying to divest themselves of mainstream technology companies. But they offer limited audiences.

In the end, there is no social media marketing rule that applies equally to all companies. As demonstrated by this post’s comparison, companies have to consider social media marketing based on their individual circumstances.

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