03 Oct Figuring Out Your Social Media Spend
Social media marketing is a huge asset for any business with over a million new active social media users joining up every day. That’s an enormous amount of untapped potential just waiting for your business’ reach. Paid ads help you reach that growing audience. The question is, what’s the right social media budget for your business?
How Do Most Businesses Spend?
First thing’s first – social media isn’t cheap.
[Tweet “The average business spends $200 – $300 on social media per day.”]. This works out to a staggering $4,000 to $7,000 per month. But that doesn’t tell you much on its own. These companies could have very high revenues – $7,000 a month could be a drop in the bucket.
Take a look at social media spending as a percentage of the marketing budget. [Tweet “CMO says businesses spend about 11.7% of their marketing budgets on social media.”]. Other studies point to businesses spending anywhere from 10.1 percent to 16.3 percent of their marketing budget on social media. So, between 10 to 15 percent seems like a safe range for most businesses.
Most businesses spend around 11% of their total annual revenue on marketing. So let’s say that your annual revenue is $1 million even. If you follow averages, your marketing budget is $110,000. That makes your social media budget $13,200 for the year if you go with a clean 12%.
Now, how do you allocate that $13,200?
Break Down the Social Media Budget
Perhaps your marketing department is busy enough, and you need to outsource social media. If you’re looking for that $13,200 to cover your entire social media budget, including content, then we’re going to get a bit creative. Buffer recommends splitting 80 percent of the budget between content and paid ads, and then splitting the rest between software and tools.
With that $13,200 budget, here’s what we’re looking at:
- $5,280 on graphics, photos, and video content – 40%
- $5,280 on paid advertising – 40%
- $1,320 on social media management software (Buffer, etc.) – 10%
- $1,320 on analytics software (Iconosquare, Chartbeat, etc.) – 10%
Social Media budget for Ads Only
Maybe you have a separate budget already in place for the actual content and you just want to spend that $13,200 on ads. Here’s what you can do. Buffer recommends spending evenly between Facebook and Twitter, and spending half that on LinkedIn. The majority of your audience is going to be on the first two networks, so that’s where your focus lies.
With a $13,200 budget, your breakdown might look like:
- $5,280 on Facebook ads (40 percent)
- $5,280 on Twitter ads (40 percent)
- $2,640 on LinkedIn ads (20 percent)
What’s great about choosing a percentage-based breakdown for your social media advertising budget is that it’s easy to grow or shrink the budget with your business’ changing revenue. Re-evaluate your social media budget every quarter to make sure it’s still working for your business and in line with any revenue changes. And be sure to target social media based on your own target audience. B2B may be very different from B2C, for example.