Throughout the world, businesses spend more than $31 billion on social media advertising. Do you currently have a paid social media budget? If not, it might be time to create one.
Read on to learn more about the benefits that come with having a budget for paid social media marketing. You’ll also find some tips that will help you put together a realistic budget for your business’s social media efforts.
Reasons to Have a Paid Social Media Budget
Why do you need a budget for paid social media advertising? Here are some specific benefits that come with having dedicated funds for this part of your business:
First of all, a paid social media advertising budget, as with any other type of budget, helps you to avoid overspending.
This is especially important for businesses that are working with limited funds. If you only have a small amount of money at your disposal, creating a paid social media budget can help.
Budgeting allows you to promote your brand and boost posts without going overboard or spending more than you can afford. It also saves you from having to borrow from other budgets or take on more debt just to cover the cost of social media marketing.
Avoid Risky Impulse Decisions
When you know exactly how much money you can afford to spend, you’ll be less likely to make risky, impulsive decisions that might seem good at the moment but come back to haunt you later.
A budget makes it easy for you to be thoughtful and intentional with your social media advertising strategy, too. It encourages responsibility and proper planning, which in turn can help you to see better results in the long-term.
Track Results More Easily
Budgeting also allows you to track your expenses more easily.
When you have a budget and take note of everything that you’re spending on paid social media advertising, you can stay on top of your costs. This, in turn, helps you to correctly calculate your ROI (return on investment) later.
The easier it is to calculate your ROI, the easier it is to determine whether or not your current strategy is working. If you’re not seeing the kind of returns you want, you can figure out where the majority of your money is going and make adjustments accordingly.
Set Realistic Goals
When you have a paid social media budget, you can set more realistic goals for your business, and specifically your social media efforts.
Your budget will help you to remember how much money you have to work with each month or each quarter. You can then take that information with you into strategy meetings with your team and use it to keep everyone on track.
When everyone knows what the budget looks like, they can set advertising goals that align with that budget. That way, you won’t have to spend more than you can afford on tactics that might lose you money or might not yield a significant return.
Creating a Social Media Budget
Okay, you’re convinced that it’s a good idea to have a social media budget. How do you create one, though? What kind of factors should you think about when deciding how to spend your money?
The following tips will help you to put together a realistic budget:
Set Clear Goals
Before you can put together a budget and figure out where you need to allocate funds, it’s important to take a step back and think about what your goals are.
Why are you investing in social media marketing? What kind of results do you want to see from your social media advertising efforts? Do you want more brand exposure? Do you want to increase website visits from your social media platforms?
If you’re not sure what kinds of goals you want to meet this year or this quarter, take a look at your previous social media marketing attempts. What kinds of goals have you had in the past? What worked and what didn’t?
You can use the answers to these questions to inspire your future goals. They’ll also help you figure out what you need to focus on moving forward.
Decide How Much You Want to Spend
Your next job is to decide how much you want to (and are able to) spend on social media marketing.
Start by thinking about your total marketing budget. On average, most B2B companies spend between 2 and 5 percent of their revenue on marketing, and most B2C companies spend between 5 and 10 percent.
Once you know what your total marketing budget is, think about how much of that you want to spend on social media, specifically. According to a recent survey, the average business spent the following percentage of their marketing budget on social media marketing:
- B2B Products: 16.6 percent
- B2B Services: 20.5 percent
- B2C Products: 20.9 percent
- B2C Services: 24.7 percent
Include Core Social Media Marketing Components
Once you know how much you can allocate to paid social media, you can start breaking down the allotted funds and figuring out how much you’ll spend on each aspect of social media marketing.
The following are some of the most important areas to think about when constructing your budget:
- Content creation: Cost of photography, stock photos, graphic creation, copywriting, video marketing, etc.
- Software and tools: SEO and keyword research software, hosting costs, social media management service subscriptions, etc.
- Paid advertising: Facebook ads, Instagram ads, Pinterest ads, Twitter ads, LinkedIn ads, etc.
- Paid partnerships: Influencer campaigns, affiliate programs, co-branded campaigns, etc.
- Training: Social media management training programs, LinkedIn Learning, etc.
Start Budgeting Today
As you can see, taking the time to put together a paid social media budget can make life much easier for you and your business’s marketing department.
Be sure to keep the tips outlined above on creating a realistic budget that you can stick to. They’ll help you to maximize your funds so you can see results without having to break the bank.
Jason is a 20+ year marketing veteran including time spent at Microsoft overseeing social media for Microsoft Advertising & Office for Mac. Once named to Forbes Power Social Media Influencers List, Jason is the owner and founder of Socialistics.