How To Save Your Butt When The Social Media Bubble Bursts

By: Mark Schaefer - April 19, 2011

I am going to go on a rant. But first, while I still have my composure, allow me to tell you a short, yet relevant, story.

I started my corporate career in the midst of an economic downturn for my industry. I was working for a Fortune 100 company and to get through this difficult time, the company brought in an outside consulting group to conduct a little exercise called “Overhead Value Analysis.” Simply put, every person from the adminstrative assistant to a vice president had to stand up in front of a group of strangers and justify their existence by explaining how they were contributing to shareholder value.

This was a very stressful exercise, especially for a young man who was still finding his way to the water cooler. But thankfully I was always a numbers geek and could pull out a chart (probably drawn by hand in those days) to show what I was doing, why I was doing it, and how what I was accomplishing was tied to the company objectives. This was an important lesson in my young career and one that has always served me well through many downturns along the way.

So when I hear another round of gurus pontificating last week about the unnecessary annoyance of measuring social media activities I want to shake somebody. I am so very sick of people who have never had to work in a corporate bureaucracy or manage through a budget crisis explain that measuring social media is like measuring your mother, or your pants. Here’s another one that drives me nuts: “The ROI of social media is that your company exists in five years” … again implying that you need to do social media, just because you need to do social media. Bullshit.

Don’t you believe it. You MUST keep measuring, assessing, adjusting, improving. Never get caught with your stats down.

At some point in the life of every company, there will be a financial imperative to slash overhead costs. The bubble always bursts, at least in a free economy. When that happens, everything will be evaluated under the icy glare of number-crunchers — do we cut or not cut? This is the day of reckoning that defines the ”implied economic value” of any effort. Even something as seemingly mundane as social media. You better be able to articulate a business case, and it better be something better than page views and Klout scores, Bub.

Why? Social media is NOT FREE. Every economic activity in a corporation directly or indirectly has to contribute to shareholder value.

Let’s look at how “un-free” social media really is. Let’s assume you have one person working full-time on social media marketing. We’ll assign that person a salary of $60,000. In a typical company, standard health, 401(k) and other benefit costs equal another 50% of the base salary, or in this case, $30,000.

We’ll assign another 20% of base salary for overhead such as office space, shared services support and technology. That’s $12,000. We won’t even address travel, training, or bonuses.

So, our minimal full-up cost for one social media professional is $102,000. As a business owner, are you willing to spend more than $100,000 per year without requiring any accountability for a return? What kind of a company are you running?

I’m a practical guy. I know it may be cost-prohibitive or even impossible to determine the specific ROI of your efforts. Sometimes you need to look at qualitative tools for social media measurement. But there is no excuse for not tracking key measures that contribute to your company’s goals. To support your credibility, your long-term viability, and your personal career in social media marketing, YOU MUST MEASURE.

This is an emotional topic for some, but it shouldn’t be. This is basic business common sense. Are you with me on this one?

Originally published at

Mark Schaefer

About the Author

Mark SchaeferExecutive Director Mark Schaefer has 28 years of global sales and marketing experience and advanced degrees in business and applied behavioral sciences. He is an award-winning business writer, university lecturer and innovator, receiving seven international patents for new product ideas with Fortune 100 companies. He teaches at Pellissippi State College in Knoxville and serves as an adjunct professor of marketing at Rutgers University.

View all posts by Mark Schaefer
  • Claudia

    Please find me a $60K social media job stat! What the hell?

  • Pamela Hazelton

    Very compelling argument… but I think you titled it wrong. I almost didn’t give it a read…

  • WebCriticUK

    Mark, I agree. Having been a MD for many years I always had to justify everything to everyone. I have asked many local PR people, who have recently hopped on the social media bandwagon, about ROI and not one of them could tell me about any financial return or other success stories.
    In many ways I am obliged to join in (as an online web critic) but hopefully my posts are more relevant than most of the spammy promotional nonsense that I see. Social media seems to be a sport for the middle management and junior marketing execs.
    Web Critic UK

    • Mark W Schaefer

      A comon complaint. Check out my book The Tao of Twitter. There are plenty of case studies in there and I spend a whole chapter on business benefits and measurement. Thanks!

  • Kristine Allcroft

    Fantastic nuts and bolts breakdown of the raw numbers! Thank you for this black and white, honest presentation of the facts – from a business owner’s point of view. Very few folks even realize that their job costs the employer so much!

    • Mark W Schaefer

      Thanks Kristine!

  • Nick Stamoulis

    While we may not be able to measure the effects of social media the same way we measure other marketing efforts, I agree that we have to show some soft of value. I think that is why companies cling to getting more and more fans and followers. It’s a hard number you can use as proof. But there is more to social networking that getting Likes.

    • Mark W Schaefer

      Depends on your strategy. It all starts there, right? Thanks!

  • John Wiggill


    Great article. The idea of justifying everything you do in business often gets lost in office politics, and the less you know about a topic, the better chance there is of losing your assets.

    The same question should be asked about all your marketing and advertising efforts. I sat in wonder at every commercial break during the Superbowl, knowing that MILLIONS were being spent every 30 seconds on advertising that showed a guy getting kicked in the nuts?

    Many times after an ad i would ask myself… ‘what was the point of that?’ and ‘did that ad leave with a desire to go buy a product?’ frightfully the answer was usually no. Sometimes I didn’t even know what or who was advertising.

    If an advertisement isn’t trackable in real dollars you shouldn’t be running it!

    • Mark W Schaefer

      The good news is that Internet marketing is usually so much easier to meaaure. You can add a lot more science to it! Thanks for the comment.

  • Kain

    Great article.

    I’m so sick of people claiming that it’s “Free” marketing.

    Some of the rubbish being mouthed by social media “gurus” at the moment sounds almost exactly like the kind of stuff the “gurus” behind the .com bubble used to say.

    The sooner this particular bubble bursts the better.

  • Jon

    I strongly believe social media is a niche market. Some industries generate huge leads from facebook, twitter and the like, others couldn’t make a sale through social media to save their business. The saying “all things in moderation” applies here. Social media is not the be all, end all to your business marketing needs; and it might not even be worth it. Thank you Mark for not being another fanatic preaching how we should use social media because it’s there. Use it if it builds your business effectively.

  • Juan Vender en internet

    It’s true. I agree with you: “YOU MUST MEASURE”. Thank you Mark for this article.