New Year, new business goals and new calculations to know how much money you need to set aside for your social media marketing budget. This can be a stressful time for any business owner, even more so for those who have just started their business. In this article, we will try to address both new and seasoned entrepreneurs and show them how to create a well adjusted social media marketing budget.
Advertising Costs Keep Increasing Year after Year
This is the only certainty for any marketer and business owner. As competition for audiences and advertising space increases, so do the bidding prices for Facebook ads, Instagram ads, boosted posts and promoted tweets.
And this constant growth means that year by year you need to adjust your social media marketing budget upwards. But how much should you really spend on social media ads, tools and content to maintain a steady flow of leads and new clients?
In this article we will present several approaches, so that you find the best method for creating your social media marketing budget, according to the particular situation of your business.
And we will start with a general overview of the social media marketing spend in various industries and niches.
1. Do What Your Competitors Do
When unsure, look at what other companies do when setting aside their social media marketing budget for 2020. A survey conducted by Hook Agency indicates what businesses include in their digital marketing budgets. Thus, the main aspects they plan to focus on this year are:
- 61% SEO
- 55% Blog content creation
- 50% Marketing automation
- 47% Content distribution
- 36% Interactive content creation.
When it comes to the precise amount of money set aside from the company revenues, the survey conducted by VTLDesign has the answers:
- 24% consumer packaged goods companies;
- 15% consumer services companies;
- 15% tech software companies;
- 13% communications and media companies.
As a general rule, large companies allocate between 12% and 20% of their budget to digital marketing expenses, while small companies allocate between 6% and 12% of the budget to online advertising and social media promotion.
2. Adapt Your Social Media Marketing Budget to Your Goals
Another method of creating a realistic social media marketing budget is by tying it to your goals for this year. However, please note that this is a less precise and more dynamic budget creation method. As costs per acquisition for each client and costs for various suppliers (photography, post scheduling tools, and copywriting) increase, you will need to keep adjusting your budget.
Thus, the first thing you need to do is determine the goals you want to achieve. For new businesses, for example, the first goals are related to brand awareness and growing their followership on Facebook, Instagram and other social media channels.
For established companies, the goals include:
- Growing sales by X percent;
- Gaining Y more customers;
- Growing the market share by Z percent.
Next, look at the cost per acquisition for leads per social media channel (Facebook, Instagram, LinkedIn, etc.). For this, you need to look at the analytics for your advertising campaigns and calculate the average CPA. Estimate a slight increase in cost per acquisition for this year, say 10%. Now do the math according to the numbers you have before you.
3. Know What You Will Social Media Marketing Budget Entails
As we specified above, your social media spending is not strictly related to ad spend. You need to consider all the tools and third parties involved in creating your social media posts and ads, such as:
- Software: various apps and tools you use to edit images and videos, automate social media posts and create in-depth analytics reports;
- Copywriting: you may hire freelance copywriters or work with an agency to have polished and professional written content for your blog and social media pages;
- Photography: your phone camera is not enough if you want high quality, crisp images to illustrate your blog posts and create effective ads;
- Video: the king of social media content requires special attention to details. Shooting videos on your phone is still effective, but you also need professionally produced video content for social media ads.
Now it’s up to you to select the social media marketing budget calculation best adapted to your specific needs. Good luck!