Social Media Budgets vs. Traditional Budgets

02/15/2011 05:13 pm ET | Updated May 25, 2011

Advertising has come a long way. Something that was once a true luxury is now affordable, thanks to Google, Yahoo!, Bing and many others.

Small businesses can make an account at either of the fore mentioned sites and start creating highly targeted ads. And, it works.

A new addition to that category is social media advertising, the largest being Facebook. As a site with hundreds of millions of visitors that relies on personal information, it's a good tool to measure brand loyalty and awareness.

However, when annual reports about advertising spending are made public, social media advocates are usually the first ones to say that big brands aren't spending enough on these new platforms.

They're wrong.

One of the reasons traditional advertising is expensive is because it's exclusive. There's a process to get an ad on TV or in print.

That process and barrier of entry doesn't exist online. Facebook advertising can be as low as $0.05 CPM. TV advertising is at the very least 100 times more expensive.

Given the significant cost difference, there's no reason for advertisers to spend the same amount of money. Allocating 50% of spend towards digital and 50% of spend towards analog is foolish and doesn't accomplish any business goal.

Advertising is bigger than platforms. It's about reaching the end user. And you reach a user with a combination of different mediums. Not by listening to a social media advocate.


Aanarav Sareen is a content creator and digital media consultant. He blogs at Digital Media Business and publishes the monthly Digital Media Newsletter. He's also the host of the weekly Digital Media Podcast.