No matter if you’re an enterprise-level company, a solo entrepreneur, or a startup that’s about to launch the next big thing, you need to ensure that you’re seeing a return on your social marketing investment. This is where a social media budget can help.
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What is a social media budget?
A social media budget is a document that specifies how much you plan to spend on social media over a specific time, e.g., a month, a quarter, or a year, and creates a clear understanding of the costs associated with running your social media campaigns.
Budget information is typically presented in a spreadsheet, but it’s not uncommon to see social media budgets in other tools such as Notion or Airtable. Whatever tool you use, make sure that the data is clearly presented, easy to understand, and helps you analyze where you’re spending money and if you see a return on investment.
How big should your social media budget be?
There’s no hard and fast rule for how much to spend on marketing or social media specifically because every business is different. How much company budget you allocate to marketing and social media will depend on your company size, team size, industry, revenue, and business goals.
General marketing budget
The folks over at CMO Survey asked over 270 chief marketing officers (CMOs) about their marketing budgets in 2022.
Their findings report that marketing budgets have grown 10.4% over the last year due to the “growing importance of marketing in organizations, which has increased in more than half of all companies during the pandemic.” So how much does this equate to in dollars?
CMO Survey’s research shows that marketing budgets are 8.7% of a company’s revenue. So let’s say your business has an annual revenue of $1 million dollars. This figure leaves you with a marketing budget of $87,000.
Social media budget
According to CMO Survey, the percentage of marketing budget businesses spent on social media in 2022, in the 12 months following 2022, and the next five years break down as follows.
Industry
Budget spend 2022
Budget spend +12 months
Budget spend +five years
B2B Product
12.83%
15.53%
20.08%
B2B Services
13.27%
14.78%
19.68%
B2C Product
18.54%
21.29%
26.16%
B2C Services
15.25%
16.90%
20.10%
What’s great to see here is that every industry is planning to increase their spend on social media long-term, signaling that CMOs believe in the power of social media to drive revenue for their business.
If we take our example of the company with a revenue of $1 million dollars, which leaves $87,000 to spend on marketing, using the data above, we can breakdown of how much money each industry should allocate to a social media budget.
Industry
Social media budget
B2B Product
$11,162
B2B Services
$11,544
B2C Product
$16,129
B2C Services
$13,267
What should your social media budget plan include?
Content creation
To win big on social media, content needs to be at the forefront of your social media marketing budget. Engaging content is your bread and butter, so it’s important you don’t skimp on devoting a large portion of your social media budget to creating thumb-stopping content to distribute on your social channels. Here are a few line items you should include in this budget section:
* Photography and images
* Video production
* Talent, i.e., actors and models
* Production costs, i.e., props and location rentals
* Graphic design
* Copywriting, editing, and (possibly) translation
Depending on your business size and needs, costs will vary significantly. For example, a freelancer who needs a few LinkedIn posts and Twitter copy written up will budget fewer dollars than an agency that needs to create a bank of short-form videos for TikTok and long-form videos for YouTube.
Another impact on cost is how custom you want your social media content to be. For example, you can get started with photos and graphics from a free stock photography site, where you can budget $0 for photos. However, if you want a more custom approach or you want to show off your specific products, you’ll need to hire a photographer.
Total budget allocation: 40%
Software and tools
To run campaigns on social media, you need a tech stack. Depending on the size of your business, this could mean a few dollars per month on a social media publishing platform or hundreds of dollars on video editing software, project management tools, and customer service technology.
Here are a few recommendations of tools that you might need to include in your social media budget.
* Design and editing tools
* Social video tools
* Project management and collaboration tools
* Social media management tools (of course, we recommend Hootsuite)
* Social media monitoring tools
* Competitive analysis tools
* Social advertising tools
* Social customer service tools
* Social media analytics tools
Again, costs will vary significantly depending on the size of your business and your team. Some software tools (including Hootsuite) offer free plans with basic features.
Total budget allocation: 10%
Bonus: Use our free Facebook Ads budget calculator to figure out exactly how much you need to spend to get the results you want. Let us do the math for you!
Paid social media campaigns
If you’re not up to speed, the key to a successful social media strategy is combining organic and paid content together. This holistic approach blends awareness with conversion, meaning more eyeballs on your biz and more sales for your biz. A win-win!
If you decide to introduce social advertising to the mix, here are some options you might consider including in your social media budget:
* Facebook ads. Facebook offers a variety of formats, campaigns, and targeting capabilities.
* Facebook Messenger ads. Placed in the Messenger app home screen, these ads can be good for starting conversations.
* Instagram ads. These can reach target audiences in feeds, Stories, Explore, IGTV, or Reels.
* LinkedIn ads. Reach a professional audience with sponsored InMail, text ads, and more.
* Pinterest ads. Pinterest’s promoted Pins will help you reach its DIY network of planning Pinners.
* Twitter ads. Drive website clicks, Tweet engagements, and more.
* Snapchat ads. Branded filters, story, and collection ads might be right for your next social campaign.
* TikTok ads. The popular-with-Gen-Z video app offers full-screen ad placements, hashtag challenges, and more.
The amount of money you spend on the paid side of your strategy will depend on your business and its goals. However, we recommend starting small and scaling vs. throwing down thousands of dollars on a paid campaign when you’re not fully sure of what works and what doesn’t.
To get you started, here are the minimum spend amounts required to run a campaign on each of the major social networks. The minimum spend won’t get you access to all advertising options or a lot of exposure but it gives you a sense of how little it can take to get started.
Facebook: $1 per day
Instagram: $1 per day
LinkedIn: $10 per day
Pinterest: $0.10 per click
Twitter: No minimum spend
YouTube: $0.10-0.30 per view or action
Snapchat: $5 per day
TikTok: $10 per day
To calculate how much you should spend on your next Facebook ad campaign based on your revenue goals, try our Facebook Ads Budget calculator.
Bonus: Use our free Facebook Ads budget calculator to figure out exactly how much you need to spend to get the results you want. Let us do the math for you!
Pro tip: For more tips and insights on combining paid and organic, read Paid vs. Organic Social Media: How to Integrate Both into Your Strategy.
Total budget allocation: 10%
Influencer marketing
Working with influencers (who also brand themselves as content creators) is an easy way to expand the reach of your social media campaigns. How much budget you allocate to influencer marketing will depend on the type of partnership with the influencer, the size of their following, and the campaign you’re running (format, channels, goals, etc.).
Influencer campaign costs vary, but the basic formula for calculating influencer rates is $100 x 10,000 followers + extras. Some nano- or micro-influencers might be willing to use an affiliate commission structure.
Total budget allocation: 5%
Training and development
There are lots of free social media training resources out there, but it’s always worthwhile to spend a few bucks and invest in training for your team. Why? Because social media changes fast, so it’s important to keep your team up to speed with the latest developments.
Depending on your team’s skill levels and campaign needs, these are a few training options you should consider including in your social media budget:
* Hootsuite Academy. From single courses to certificate programs, Hootsuite Academy offers a catalog of courses taught by industry pros and tailored for businesses.
* Hootsuite Services. Hootsuite Business and Enterprise customers get access to guidance and coaching, with custom training available as a Premier Service.
* LinkedIn Learning. LinkedIn’s business courses extend well beyond the use of the LinkedIn platform. They feature instruction from and interviews with subject matter experts, including Sheryl Sandberg, Adam Grant, and Oprah Winfrey.
Total budget allocation: 5%
Social strategy and management
Newsflash! Managing the company’s social media account is not the job of an intern. The day-to-day task of strategizing, creating, scheduling, publishing, and analyzing social media content should be undertaken by an experienced social media manager, preferably someone in-house vs. outsourcing to a freelancer.
When building a social media manager role into your budget, consider the average salary for social media managers is US$50,000.
Total budget allocation: 30%
How to create a social media budget plan
Understand your goals
We’ve said it before, and we’ll say it again. Every good marketing strategy starts with clear and well-thought-out goals. After all, it’s impossible to determine how much budget to assign to social media if you don’t know what you want to achieve.
We’ve got a whole blog post on effective goal-setting to help with this part of creating your budget, but here’s the gist. Especially when using them to create a budget, your goals should be SMART:
* Specific
* Measurable
* Attainable
* Relevant
* Timely
Specific goals tied to measurable results allow you to measure the value of social media, so you can determine an appropriate amount to spend for each desired result.
Measurable goals also allow you to track and report on your success, so you can adjust your budget over time to better support the strategies that work for your business.
Analyze your spend from previous months (or years, quarters)
Before you create a budget, it’s important to understand the current state of affairs. How much are you spending on social media now? If you’ve never made a budget, you may not be completely sure.
If you’re already producing social media reports, you’ll have a good source of information to draw from. If not, a social media audit is a good first step to help you understand where you’re currently spending your time on social media.
Next, compile a list of all your specific social marketing expenses from previous periods using the categories outlined above, so you know where you’re starting from.
Create or update your social media strategy
You’ve now got some good starting information to help build your social media strategy. This will help you work out how you’re going to go about achieving the goals you set in step 1.
Then, by analyzing the amounts you’ve spent in the past and the efforts you want to make to achieve those goals, you can determine a reasonable amount to spend on each part of your strategy moving forward.
A summary of your social strategy is a good document to attach as a cover letter in your social media budget proposal since it shows that the amounts you’re asking for are based on real data and solid planning.
Create a budget proposal for your boss
Now it’s time to get technical. The good news is, we’ve taken care of setting up a social media budget proposal template for you, so all you have to do is enter the information specific to your business and your plans.
If you’d prefer to create your own social media budget calculator, include the following information in an Excel Spreadsheet or Google Sheet:
* Category: Content creation, software, etc. Create a section for each of the relevant items listed above, then break it down into specific line items for each individual expense.
* In-house vs. outsourced expense: In-house expenses are based on the amount of staff time dedicated to social media. Outsourced expenses are anything you pay for outside your company, from consulting to ad fees. Some categories may include both in-house and outsourced expenses, so break these out into separate columns.
* Spend per item: For each line item and category, add up the internal and outsourced costs to indicate a total spend. List this as both a total dollar figure and a percentage of your total budget so you (and your boss) can clearly understand how you’re allocating resources.
* Ongoing or one-time expense: If you include any one-time expenses in your budget that will have value over the long term, it’s a good idea to flag these so your boss understands it’s a one-time ask. For example, maybe you need to buy some equipment to set up a video studio. Use separate columns to tally your one-off and ongoing costs.
* Total ask: Add it all up to show the total amount requested.
Frequently asked questions about social media budgets
What is a good social media budget?
A good social media budget is one that produces a positive return on investment and helps your business meet its goals. But as a general rule, your overall marketing budget should be 8.7% of your company’s annual revenue and social market a portion of that.
How much should a small business spend on social media?
A small business should spend 8.7% of its annual company revenue on marketing, with a portion of this put aside for social media. Depending on your business and the industry, this could vary from 12-18%.
How much does it cost to run social media?
If you’re just starting out, there are plenty of free tools available, which means you can run social media for free. However, if you’re looking for long-term success, you’ll need to devote a portion of your marketing budget to running social media, and the amount will depend on your company size and revenues.
Make the most of your social media budget and easily manage all your social media profiles using Hootsuite. From a single dashboard, you can schedule and publish posts, engage your followers, monitor relevant conversations, measure results, manage your ads, and much more.
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The post How to Create a Social Media Budget: Breakdown and Tips appeared first on Social Media Marketing & Management Dashboard.
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