Your social media marketing campaign may become a lot more expensive in 2015.
Thank Tom Wheeler for that.
In the early days of social media, brands rushed to market their products through the social networks because they could reach targeted audiences for free. Or so they thought.
That perceived digital free lunch never really existed. There was always some cost, starting with your time. Today, brands need to invest in strategy, creative, advertising, and community management for their social media initiatives to pay off.
But if Wheeler, the new FCC chairman, is successful in putting his proposed rules for net neutrality into play, digital marketing will likely become more expensive. This will certainly be true for bigger brands, who will pay for faster access, but the cost is likely to become prohibitive for small and medium-sized businesses, as Copyblogger points out.
The impact of the proposed rules is really quite simple:
If you control the channels of distribution, you have competitive advantage.
The End of Net Neutrality
Since its commercialization in the mid-1990s, the Internet has been an egalitarian channel of distribution, giving rise to the phrase: “Everyone is a publisher.” But if the FCC changes its rules to allow ISPs to cut deals with companies like Netflix and Amazon for faster access, that equal access is in jeopardy.
If service providers can now charge different rates for different speeds, those with deep pockets will be able to pay the fees for faster access to their content. This will inevitably put small and medium-sized businesses at a competitive disadvantage, raise the cost of marketing, and stifle innovation at startups.
Marketers may not feel this initially. Most of the discussion has focused on entertainment companies like Netflix and Comcast. The first to feel the effect of the new rules will be streaming users of these services, who will pay premiums to support faster download speeds.
But this is just the beginning. Once we strike down net neutrality, ownership of the channels of distribution will change and with it, marketers’ ability to reach their target audiences.
Sure, it’s just TV now, but how long will it be before Facebook pays for faster access – and passes those fees on to advertisers in the form of higher cost Facebook ads?
The Social Networks Have to Make Money
After all, the social networks have to make money. Both Facebook and Twitter are public companies, bound to shareholders’ quarterly demands. And both companies are moving aggressively into mobile and video, which require faster speeds. In this respect, they’re not that different from streaming companies like Netflix.
As unpalatable as rising advertising costs are, they’re only one line item in the budget. If the rules change, brands may also find themselves paying more so that their websites load faster for visitors.
Those that can’t pay for faster access, or whose budgets won’t support higher advertising costs, are going to be at a competitive disadvantage.
So, marketers have two options: lobby against Wheeler’s proposed rules or plan for higher marketing budgets in 2015. Which do you choose?