The sudden and precipitous collapse of the world's financial markets is already taking its toll on corporate marketing budgets. We're hearing stories of big campaigns scaled back, put on hold or killed altogether. Not a lot yet,  but it's clear that many companies are going to be taking a fresh look at how, and how much, they spend on getting the word out over the next few quarters. 

Will this new reality be good or bad for social media?   I'm interested in hearing your thoughts, but here are a couple of mine.  

Social media is still a relatively small percentage of most big company marketing budgets.  It is a fraction of what they normally spend on advertising, trade shows and public relations.  For the price of three ad pages in BusinessWeek you can "own" a community site like this one for a year.  We believe (and our experience has proven) that the ROI on a highly-targeted investment in a social media project is much more cost-effective. "Reach" is vastly over-rated in both the TV and print worlds.  

I was reminded of a second important point while chatting on Skype with Alex Ang, of InvestorMatrix, who said "There has never been a more important time for corporations to blog, especially to their investors."  I think that's true.  Social marketing is a lot more credible than mass e-mails or form letters and phone calls from panicked brokers.  If a company has taken taken the time to develop and nurture an online audience through conversational marketing, it will have a reservoir of goodwill and credibility that can help turn things around. Â