With 3.96 billion social media users worldwide, it’s no surprise that companies are ditching traditional marketing tactics and going full-force into the digital age of shareability! Companies like yours have a massive opportunity to get their message out via platforms such as Facebook, Instagram, and Twitter – but how do you decide your business’s social media marketing cost? How much should you be negotiating when hiring an agency?
We’re here to tell you everything there is to know about costs associated with social media marketing so your company can reap the rewards without breaking the bank. Let’s explore what lies ahead in the world of SMM spending – buckle up folks!
Why does social media marketing matter?
Still not sure why your business needs to invest in social media marketing? Here’s a brief rundown of just some of the benefits that come with having an awesome strategy and budget for Facebook, Instagram & more:
- Expand Your Reach – Get seen by way more people than ever before while building brand awareness!
- Connect With Customers – Interact directly with potential customers on their terms. Increase engagement like never before!
- Drive Traffic To Your Site – Draw massive amounts of traffic right back to where it matters most—your website 👀
- Generate Leads/Sales Conversion Rate Optimization (CRO) – Put yourself “in front” of audiences you want as soon as possible so they become leads or make purchases quicker💰
- Gain Insights On Audience Engagement- Use data from followers across all platforms to continuously refine ad campaigns 📈
Social media marketing allows businesses to reach a large audience in a targeted and cost-effective way. By creating profiles on popular social media platforms, such as Facebook, Twitter, and Instagram, businesses can engage with potential customers and promote their products or services.
Social media also allows businesses to receive immediate feedback from customers, which can help improve their products or services. Additionally, social media platforms have a wealth of data that can be used to target specific demographics, interests, and behaviors. This makes it a powerful tool for businesses to reach and engage with their target audience.
How much do organizations spend on marketing?
The amount that organizations spend on marketing varies widely depending on the size and type of business, as well as the industry. According to the Bureau of Labor Statistics, the average marketing budget for small businesses is around 12% of their overall budget, while larger businesses may spend significantly more.
Some industries, such as consumer packaged goods and technology, tend to have higher marketing budgets than others. According to a survey by the Association of National Advertisers, the average marketing budget for companies in the consumer packaged goods industry was 13.6% of total revenue in 2020, while technology companies spent an average of 12.5%.
However, it is also important to note that with the rise of digital marketing, companies are increasingly shifting their marketing budget towards digital channels such as social media, search engine optimization, and email marketing, rather than traditional channels such as television, radio, and print.
How much do organizations spend on social media?
The amount that organizations spend on social media marketing varies widely depending on the size and type of business, as well as the industry. According to a recent survey by Hootsuite and We Are Social, the average business allocates around 24% of its marketing budget to social media, with a majority of the companies surveyed spending between 11% and 50% of their total marketing budget on social media marketing.
It is also important to note that the cost of social media marketing can vary depending on the type of activity, such as creating and managing social media profiles, creating and curating content, running social media ads, and monitoring and analyzing social media metrics. The costs can also vary depending on the specific social media platform, as some platforms such as Facebook and Instagram have more advanced targeting options and therefore may be more expensive to advertise on.
FACTORS THAT INFLUENCE SOCIAL MEDIA MARKETING BUDGET
Does the idea of spending tens of thousands of dollars per year on social media cause you to start sweating? That’s okay. You’re not alone.
There are plenty of variables that influence your social media marketing budget and cause you to spend more or less than what’s outlined above, including the following:
- Size of your company (companies with more employees often spend less than those with fewer employees, likely because large companies also have more name recognition)
- Industry sector (retail companies tend to spend more on social media marketing, on average, than IT companies, for example).
- Specific business goals (Are you trying to build brand awareness? Increase engagement? Increase sales?).
- Software and tools (Hosting, SEO keyword research, editing tools, project management systems, etc.).
- Types of social media advertising (Facebook Ads, Twitter Ads, Instagram Ads, paid partnerships with social media influencers, etc.).
- Whether you hire an in-house social media marketing specialist or outsource to a social media agency.
How Much Does Social Media Marketing Cost?
If you’re serious about producing real measurable results for your business with your social media, you need to be prepared to spend at least $5,000/month all in (retainer + ad budget).
Generally speaking, this is for well-funded startups or medium-sized (and up) businesses that typically have established marketing budgets to work with. If you’re a small local business or side hustle, chances are this won’t apply.
Access our paid social media calculator to help give you a sense of what a realistic budget should be for your specific goals and objectives.
TIPS FOR CALCULATING YOUR SOCIAL MEDIA AND CONTENT MARKETING BUDGET
Taking into account all of the above, let’s try and settle this for good. How much money should you be spending on social media marketing and content marketing combined?
Here are some tips that will help you calculate a budget that works for your company and helps you see the kind of results you’re looking for:
Calculate Your General Marketing Budget
Start by taking a look at your total marketing budget. According to a survey by the Association of National Advertisers, the average marketing budget for companies in the consumer packaged goods industry was 13.6% of total revenue in 2020, while technology companies spent an average of 12.5%.
Calculate Your Social Media Marketing Budget
Now, let’s calculate 24 percent of that amount. As we mentioned above, according to a recent survey by Hootsuite and We Are Social, the average business allocates around 24% of its marketing budget to social media, with a majority of the companies surveyed spending between 11% and 50% of their total marketing budget on social media marketing.
Establish Goals and Priorities
Once you have a general number to work with, take a step back and think about what you want to accomplish with that money.
What kinds of social media and content marketing methods do you want to use to accomplish them? For example, do you need to hire a copywriter who can write blog posts for you?
Do you need to hire a videographer who can create social media videos? How much do you plan to spend on Facebook ads or Instagram ads?
If you have lofty goals for your business when it comes to social media marketing, you may need to spend a bit more to turn them into realities. The number you calculated using the formulas above is just a jumping-off point. It doesn’t have to be (nor should it be) set in stone.
HOW TO MAXIMIZE YOUR SOCIAL MEDIA MARKETING BUDGET
Are you still feeling a little anxious about your budget? Are you unsure of how you’re going to be able to afford to spend enough to reap the benefits of social media marketing?
If so, here are important tips to keep in mind:
- Do market research: Learn about where your audience spends the most time; that way, you won’t spend a ton of money advertising on a platform none of your target customers are using.
- Monitor analytics: Pay attention to the types of content and social media posts that get the most attention, then create more content and ads like that moving forward.
- Social media agencies save you money: They charge flat fees for their services, which is more cost-effective than hiring an in-house employee and paying for all the extra costs that come with them.
THE BOTTOM LINE
As you can see, there’s a lot to consider when calculating your company’s social media marketing budget. Keep these tips in mind, though, and you’ll have a much easier time figuring out how much to spend on social media and content marketing.
Once you have a general number, keep it in mind for when you reach out to a social media agency. Then, you can negotiate a good social media marketing cost that will provide you with a return on your investment.