Why spend money on Social Media?

06 April 2020

I recently spent some time with a group of business leaders who all had concerns about the increasing demands for money and resources that were being made right across their enterprises.

Whether it was investments in new plant and machinery, wage increases, new government regulations or the price of electricity and waste services, they all felt pressure on the bottom line.

Why spend money on social media?!

One area that came up in discussion was justifying our Social Media spend. For many people that I talk to, it feels like a bottomless pit where they pour cash in, only to be told that their search engine optimisation is inadequate, their branding is fluffy and their budget is not in line with industry trends. 

My Masters Thesis was on exactly this topic. Finally, an audience after all that work!

My approach had been to interview twenty-five senior executives and business owners. This group included local success story Trade Me and huge global advertising firm Saatchi & Saatchi, as well as local retail outlets, businesses and for an expert perspective Justin Flitter, one of New Zealand’s leading Social Media and Emerging Technology commentators.

What are these?!

Last week my eleven-year-old grandson was introduced to a programme on free to air television.

 “What are these?” he asked when the ads came on.

Is it any wonder television and print media are on a seemingly terminal decline? When kids do not even recognise a paid TV advertisement, the future is bleak for that industry and of concern to those of us still using their services.

Where in the past many of us saw newspapers, radio and television as our first port of call for our promotional activity, high cost, lack of reach and focus make today’s digital platforms a far more effective use of limited funds.

But how is this value derived? There are five value creators businesses can focus on when evaluating the effectiveness of their internet strategy. These are Commerce, Community, Communication, Connection and Content.


You don’t need me to tell you about e-commerce. Anyone not living in a cave will know that online customer interaction is essential.

E-Commerce is not simply about trade though. If we are not doing so already, we should be collecting customer data and leveraging the huge value that this drives.

A simple but powerful example is Amazon. Yes, they will sell you anything from a book to an electric car, but next time you visit, pay attention to their “recommendations”. Their data collection has followed your journey to the site, noted what you buy and where you stop and look. You are their ‘customer of one’.

Algorithms are far more effective at knowing your preferences than the old school face to face service we expect from our local retailer.

We are not all retailers of course. My firm, Total Utilities, is interested in procurement contract expiries and value, leveraging energy and waste consumption trends, carbon footprints and greenhouse gas emissions. Sure, we collect this data ourselves, but often this information is provided by our clients who will willingly contribute this in exchange for superior value, speed and actionable insights.

Data has real, measurable shareholder value and when combined with commercial transactions, inquiries and insights makes your business worth more every day. Once it was the customer list that had value, today it is insights into customer preference. 


This year I joined three significant social media communities. One group shares information on growing organic food, another is a professional Financial Operations (FinOps) group specialising in managing the complexity of OPEX-based service contracts, and the third is a group that helps me learn Italian and Norwegian.

None are related and yet all have a key characteristic: they make me feel a part of something as a consumer and as a contributor.

In the past I would have joined an Italian Society or attended meetings of Financial experts or visited organic gardens. Today, if I have a question, I simply type it online and my answer will come from all over the world, or from just down the road. Either way it is instant, usually expert, and relevant to my needs.

What is important is that by participating in, and supporting a ‘Community of Practice’ as these groups are formally known, my knowledge increases, my reputation is enhanced, and the opportunity to communicate, and extract value is created in real time.

I have formed lasting relationships with people I have not met face to face. One data specialist in Tel Aviv has extended an open invitation for me to visit. Just as powerfully, I have received calls from prospective clients, noting my membership of the Fin Ops group and wanting to meet.

Communication and Connection     

Most of us recognise Zoom, Skype and Teams and the vital role they played in keeping staff and customers in constant touch during lockdown. The ability to consume face to face meetings, document share and deliver powerful presentations was revealed to us all almost overnight. We took the opportunity with both hands and doing so business changed forever.

Compare these tools to phone systems, emails, letters and faxes and the performance, cost and benefit equation is clear to us all. Consider that video calling services for many of us were delivered at zero or near zero cost to the user. Also consider the ease with which even the most non-technical user engaged with these tools and the internet’s transformational capability within business is brought to light.


If it is normal for us to search the web for our every need it is also quite reasonable to expect that our clients and potential clients are doing the same thing.     

Creation and dissemination of web content is proving to be the key to differentiating our products, companies and brands. Where once a website with a logo, a photo of our offices, our contact details and a quick summary of our services was enough, we are now seeing emerging players and current competitors reaching higher by delivering quality, timely insights right to the devices of those who need it.

Content no longer just relies on visitors coming to our websites. Digital content marketing is a powerful tool that directs your carefully crafted content to a specific group of people in a specific geography. For example, I produced some information recently on how cloud computing could be used as a tool to help businesses coming out of the lockdown quickly move into recovery and growth mode.

With the help of a specialist digital content marketer we were able to direct that content to over 20,000 senior managers whose specific interest was marketing and finance. This was achieved using a methodology called “boosting”.  

Not only was this content directed to the right people, we were able to measure the level of interest, deal with feedback and react in near real time to requests for more information.

The Simple Things in Life are Often the Most Valuable

When billions of people across the world suddenly started video-calling friends, family and colleagues, the web handled it. When millions of students went online for their school lessons the web handled it. When we all started playing computer games and watching Netflix at once, the web remained working.

The internet is a network of machines designed to transfer information at speed, reliably and efficiently via the shortest available path. It has the capacity to serve five times as much demand as a worst-case scenario produces and is self-healing in almost any event. Secure, scalable and astonishingly cheap to use, we took it for granted until COVID-19.

May I suggest the next time you walk past that IT person crouched under a desk you stop to thank them. These people help keep your computer running and we have all witnessed how essential that is. Without IT departments, the world would have been a much darker place during lockdown.

In the meantime, consider this question. How many people do you know who have found love on the internet? If you are thirty years old or less the answer will likely be “most of my friends at one point or another”. 

If you want clients to love your brand understanding the five C’s is a great place to start.