Social media marketing strategies cost less than large-scale channel strategies such as outdoor banners and TV commercials. However, it is unlikely that your business will get anywhere with an inadequate budget. As competition for the same digital real estate has increased on the main social media platforms, so have the average costs to get your ads and posts in front of your target audience.
Mistakes in building your social media marketing budget may leave you unable to move forward just as you are gaining traction. But many companies are unable to perceive the importance of thinking out and planning a budget strategy for social media as they do, for instance, for Google AdWords.
Below, you will find a few helpful considerations to get you started on creating a realistic social media marketing budget.
- Determine Your Goals
Before you decide how much you want to spend, you need to know what you want to achieve. For example, a company which is just starting out needs to start generating sales as soon as possible. An established business which prepares a new product launch needs to make people aware of this event and get them interested in attending.
Key factors in determining your goals are included in the SMART formula:
- Specific: be clear about what you want to achieve: x new customers, y monthly sales.
- Measurable: the goals must be quantifiable, not abstract (for instance, “we need more customers” is not a measurable goal).
- Appropriate: your goals must be related to the ultimate scope of your business–getting sales; if you want a lot of Facebook™ likes just for the sake of the number, that is not an appropriate goal.
- Realistic: if your first goal is to reach 10,000 customers in the first month after opening your business, you are set on a failing course. Do some research on similar businesses in your industry and set an attainable amount.
- Timely: you need to set deadlines for all your goals, otherwise you will never know whether you have truly achieved them.
- Know The Costs
This part may seem difficult for a new entrepreneur, but it is not. All social media platforms allow you to make various budget simulations and give you an estimate result. For instance, you can estimate how many new mothers who want to stay fit you can reach in your local community with your home fitness ads depending on how much money you want to pay per click.
Thus, by inputting your goals you will be able to get an average monthly cost for your social media marketing plan for each platform you want to use. Once you have done that, you are ready to move to the next step.
- Determine Your Spending Model
This is not high level economics, in case you were wondering. It is simply a strategy of bidding–per click, per impression, or per action. The costs can vary wildly from one bidding strategy to another, so you really want to know what you want to achieve.
For example, if you want to boost brand awareness, CPM is a great bidding model. If you want to gain more leads by taking social media fans to your site to sign up for your newsletter, CPA will achieve the highest ROI.
- Budget Time as Well
The time you spend working on your social media strategies is also time added to your overall budget. This is where social media automation tools come to the rescue. The subscription fee you pay for these tools is added to the overall social media marketing cost. But it is nothing compared to the cost of doing everything manually, calculated at the hourly rate you pay yourself as business administrator (unless you pay yourself a pittance, which is a huge mistake).
- Consider Outsourcing vs. Doing Everything By Yourself
All the above steps become irrelevant if you decide to outsource your social media marketing efforts. Once you pick a services provider, they will calculate everything and come up with a monthly fee that covers all the above plus their commission. If time and lack of confidence in your skills to plan such a budget hinder you, you should probably opt for outsourcing.