Everyone seems to on the lookout for the metric that will magically make all of your business understand the true costs of marketing with the changes going on in the wider media and advertising industries. The myth that social marketing is free really bites when you present to a CFO and find yourself looking at a nodding, smiling but essentially, blank face.
If we want to make the necessary changes to budget allocation and organizational structures, I think we need to talk in terms of 'cost of content acquisition" (CAC) as a top-line financial measure.
Marketing teams are freed up with some CAPEX to invest in sustainable tools like marketing software, CRM management and content production tools and aren't just working campaign to campaign. The true costs of resourcing campaigns can be evaluated more efficiently as we are looking at labour and production costs in the same budget line.
A couple of assumptions:
1. Every company has a content production and distribution requirement
2. It's going to cost you something to produce and distribute that content
So the next questions become:
Are we going to pay money to access other people's audiences e.g. TV and magazine users, website visitors?
Are we going to build our own audiences and transact our good and services through them such as events, online communities and user groups?
Are we going to use a combination of both? (most likely)
The traditional media buying method of putting together a mix (TV, print, radio, digital) and allocating budget across media types limits us on the owned and earned media sides. It gives us a very activity-based view and doesn't allow for investment in audience building activity, mainly through increased resourcing of the client-side team to produce and distribute content.
For example: We are an enterprise software company.
We need to produce training videos, user documentation, blog posts and events.
We need to decide if we hire a video producer as a full time employee, contractor, outsource to an agency or buy paid space on a training provider's videos.
Do we buy camera equipment, purchase editing software and fly our video person to big international trade shows. Do we give our sales team smartphones and teach them how to shoot vlogs with their clients on site visits?
By taking a broader view and looking at 'cost of content acquisition' (CAC) we can investigate new media tools and distribution methods with more rigor. Suddenly the $500 smartphone for the junior account manager doesn't seem extravagant if it is used for audience building activities such as tweeting, taking photos and capturing video for direct upload to the company video channel such as Vimeo or YouTube. The administration time on campaigns goes down as content is being published directly to audiences so we get a more accurate measure of the labour costs on our activities. By sticking to a content acquisition budget, the fact that someone spends 10 hours per week on Pinterest is no longer subjective but a real input into a business process.
I thought of this in the shower this morning so initial thoughts etc but if we treat cost to acquire content (CAC) separate from cost to acquire customers then will be able to calculate a more reliable ROI?