The rise of social media has been evident in recent years. Brands have been increasingly calling for social media pitches. In this year alone, we see brands such as Jewel Changi Airport, Science Centre Board, as well as multiple government agencies such as Land Transport Authority, National Environment Agency and more searching for social media agencies.
However, social media accounts seem to be generally priced lower than other accounts in the advertising industry. Speaking to Marketing, Mina Sunico-Chin, managing partner of Hashtag Interactive, said a ballpark range for a monthly retainer would be could be anywhere from SG$5,000 to SG$15,000. Of course, there are also times that it goes beyond this range depending on the amount of expected deliverables from the client. These deliverables include number of platforms to manage, amount of content needed to be produced, and amount of community management involvement. Hashtag Interactive usually quotes by estimated man-hour costs, and may charge more if there are social media campaigns involved, and for accounts that require more deliverables, such as weekend monitoring or crisis management. Sunico-Chin revealed that an average annual contract value for the agency is around SG$80,000 per year.
Meanwhile, Jeffrey Lim, founder and managing director of 8traordinary said social media retainer accounts are generally paid SG$8,000 and above per month. Citing the same average amount, Cheo Ming Shen, partner at Rutosocial, pegged the benchmark of social media accounts to have a minimum payout of SG$4,000 a month. He added that that is the minimum required for ad spend and creative thinking. Naturally, the pay scale for each social media work differs, depending on the amount of work or the nature of content created. In a conversation with Marketing, R3’s founder Shu Fen Goh said it is important to distinguish between an agency hired to create social content, and an agency running paid social media campaigns.
For agencies hired to create social content, they are typically either on a fixed scope based on a content calendar or on a rate card basis. On the other hand, most paid social campaigns are run by media agencies which typically also manage other digital or integrated campaigns. The pay scale in this case is likely to be on a commission or retainer model. There also may or may not have a performance component to it, but R3 tries to encourage the inclusion of it, Goh said.
An under-appreciation of account?
When asked if social media work is valued by clients, Lim said that while clients understand the need and importance of social media management, this understanding does not seem to be backed with the knowledge of the amount of work required or with financial compensations.
Furthermore, there is often the misconception that social media work is an easy task, since anyone can start a social media account and create posts on their own. Delving into the nitty gritties of social media work, Lim told Marketing that social media work is more than posting content on social media channels. It can also involve strategy planning, design, copywriting, photography, content production, media planning and buying, analytics and reporting, social media monitoring and more.
“So if you look at these scope of works, they either require different expertises or different subject experts to do a great job,” Lim said, adding:
The current pay scale may not necessarily be justified.
If clients were to hire different individuals for that same job, the cost would be significantly higher. This is especially so given that there are licenses for creative, measurement and monitoring tools that the social media agency has to bear.
Additionally, a good social media agency goes beyond producing and monitoring social media content. According to Lim, a social media agency has to understand branding so it can help the client be “on brand” and communicate like the brand personality on social media appropriately. The agency also has to constantly be in the know of the latest trend to proactively provide advisory and recommendation to clients. Moreover, it is vital for an agency to understand the strengths and uniqueness of different social media platforms to plan effective content that are native to the individual social media platform.
Having a similar take on the matter, Sunico-Chin is of the view that clients know the value of social media work, but there is an under-appreciation of social media in business. While an increasing number of people are realising how much power social media (and digital marketing) has to get a brand message across, Sunico-Chin said companies have not yet realise the full potential of social media tools and innovations. Social media work goes way beyond “vanity numbers” such as fan counts or “likes” garnered on the platforms, and there are many new ways that brands can reach their consumers through social media. This includes live videos, interactive post formats, and new targeting methods, Sunico-Chin added.
On the other hand, Rutosocial's Cheo said there is a divide when it comes to clients’ perception of social media. While there are some that see the value it brings, some clients see it as just an additional platform to replicate the rest of its marketing, taking a copy and paste approach. For these clients, Cheo said it is “inevitable” that they do not see the value of the social work.
However, he pointed out that by and large, there has been an increase in appreciation in the industry. Clients are increasingly seeing social media work as a means to communicate with and engage with their existing clients, and reach out to new ones. Cheo added:
So although we started at a low base, we are moving in the right direction.
Limitation of measurement tools
According to R3’s Goh, when evaluating performance of social content, factors that brands should look at are engagement metrics, and where possible, consumer actions such as website clicks or use of branded hashtag. Goh however noted that most social content agency remuneration models still remain fixed on quantity of content created and not quality of content's performance.
On the other hand for paid social, Goh said performance metrics are the norm when it comes to gauging good social media work. “Increasingly clients are also asking for third-party verifications within social media platforms, which is a step in the right direction,” she added.
Agency heads that Marketing spoke to agreed that there are performance metrics in place when it comes to assessing the value of social media work. However, they also agree that these measurement tools may be limited when it comes to assessing the true valuation of social media.
According to Sunico-Chin, some business goals are easy to measure, such as driving sales for online shop or getting people to sign up for a newsletter. However, there are other goals that are a little trickier to directly attribute to social media, such as generating foot traffic for physical stores.
“Figuring out ways to measure the full impact of social media campaigns and content is always going to be a worthwhile challenge for brands and agencies alike, but the platforms themselves are also continually innovating new approaches for tracking results, so the gap continues to narrow,” Sunico-Chan said.
Social media work also brings about important intangibles that are not accounted for in the scope of work, according to 8traordinary’s Lim. Some of these intangible results include amplifying and building the brand and its messages through word-of-mouth and create stronger and more authentic perception, humanising the brand, and establishing a direct connection with audience.
“When you put all these factors into context, the retainer fee of an average of say $5,000 per month (if you contextualise that to just 20 Facebook posts and 12 Instagram posts per month, it will amount to SG$156.25 per post, which does not include all the other efforts), I would say that the valuation and measurement of the works involved may not necessarily be justified,” Lim added.
Agreeing with Sunico-Chan and Lim, Cheo said although there are clearly measurable results on paid social content, it is ultimately difficult to put a value on creative work that is done. He also added that the value of building brand is more relevant today than ever before, to stand out in a crowded marketplace.