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January 28, 2008

How the recession will affect social applications

by Josh Bernoff

I'm just curious -- corporate social strategists: Are you getting pushback in the face of the potential recession? Are your budgets being cut? Or maybe increased?

Add your comments here or email me at jbernoff (at) forrester.com -- I'd love to hear from you.


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Kin Lane

I am seeing a lot more requests on what business owners can do regarding social networking activity to promote business.

They are hearing the buzz and want to learn more because it is low budget if done internally.

Plus I think people will keep hanging out at social networks with or without a job.

David Berkowitz

We're only seeing more requests for developing social media strategies (speaking from the agency side). Most of our clients understand that there's a lot more they can be doing with social media, and they're still committing budgets to it.

Arjo Ghosh

There's no let-up. Companies are still very interested in how they can gain attention in online networks and they crave for better understanding and strategy that is contextual to their needs.

Tighter budgets are not yet being felt in digital for us *but* effectiveness is still the issue and social is no exception. I believe that, as long as we focus on developing methods of measurement and fast innovation, the huge interest will continue.

The issue for me is whether 'social strategists' can develop frameworks and methods of understand so that corporate clients can innovate quickly, effectively and safely. Without a vision to direct this everything is reduced to 'execution-only' - a breeding ground for fads and fashions.

In other words, 'more haste, less speed.'

Jennifer Zeszut

I don't think the need diminishes -- it is becoming more critical, if anything. What may change is how much money companies have to outsource social media tracking and such. Internal teams will need to learn "how to fish".

Jennifer Leggio

I agree with some of the comments above. I believe the need is even more critical. In my company, social media strategy is a new program and I've been tasked with taking it on with little to no budget investment. So I think that my creative efforts for increasing brand and awareness through a less focused, less overhead-requiring process versus traditional PR, will be crucial.

Max Kalehoff

No budget changes as far as I can tell. Industry wide, though, you have to admit, regardless of disruption, they're fairly miniscule in relation to some other budgets, like the ad budget, the direct mail budget, etc.

nicola de carne

In Italy there is a significant increasing of social media strategies request from private and public company.
They are understanding the importance to plan new social media initiative inside their strategies to create a relationship with their customers and their employees.
It's nevertheless true that, unfortunately, they don't understand yet that the use of these media necessarily need a 2 or 3 years plan and obviously important budget.

Tim Peter

We're pretty particular about ensuring our spend has a solid return. Social still seems cheap enough that we can test during a down market without breaking the bank.

John Bell

Speaking from the agency side and many, many client interactions and requests lately - brand marketers are rushing to get more experience with social media. There is a lot of exploration around discovering if social media can be more effective or efficient (cheaper) than somewaht wavering effectivenes of the usual marketing mix.

problem is that leads to three things:

1. unfair comparisons between social media/WOM and advertising/marketing

2. the ABSOLUTE NEED for a sober, adult measurement model that is generally acceptable to traditional marketers

3. Superfast education about social media's use at various places on the Funnel

In a month or two when the you-know-what hits the fan, we need a rock-solid BUSINESS CASE for social media/WOM that stands up in comparison to other marketing and communications choices.


Aaron Strout

Josh - great question.

Two thoughts:
1) According to some folks, we're already in a light recession (back to back quarters of negative growth) so if people are still going gang busters on the social media front, why should we expect change?
2) I will agree with the other comment-ers and reinforce the message that companies will actually save money by using social media. Imagine if you could take $150K in Google search dollars (a rounding error to most big companies) and apply that toward 1-2 skilled social media folks? The ROI would be easily 10 fold.


Rob Howard

From a vendors perspective...

We (Telligent) focus on providing enterprise social networking solutions and anticipate a push from our customers for better quantifying the value of the tools (ROI) this year.

In fact, the indications we're seeing are for more spend this year as customers:
1. Consolidate multiple vendors solutions.
2. Integrate multiple membership systems and user profile stores.
3. Bring these tools both into the intranet and consolidate onto their own on-premise IT systems.
4. Measure and quantify the ROI

Personally, I'm expecting this to be a very good year :)

Baard Hansen

No recession here. I am situated in Germany, and here everything related to Social Media is new and exciting. I think using these tools are more important in times of recession.

Nathan T. Wright

There's still a perception that social media strategy is more affordable than traditional mediums. Whether that's true or not, I don't know. Since I'm a social media consultant, I'm OK with this perception, and I bring it up as often as possible.


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