How to Set and Allocate Social Media Marketing Budget in 2022?
A study published back in 2011 shocked us with the data that every person is exposed to the equivalent of 174 newspapers of data a day.
Today, with IoT and even broader use of mobile phones, this number could be even bigger. Why should this be important to you? Well, it means that the user attention is at its all-time low, which can affect their reaction and engagement when it comes to your advertisements.
Breaking through the marketing clutter is not at all easy. It requires thorough research, skillful planning, understanding the expense, and calculating the Return on Investment (ROI). Nothing of that is possible without investment and proper budgeting.
Assess the past performance
To plan for the future, you need to assess the past successes and failures. That’s why you should go through the past media reports and analytics. This will help you understand how your investments affected the performance.
If the results matched or even exceeded the expectations, you can repeat a similar strategy this year (with some adjustments to new digital trends).
If your previous strategy didn’t meet your anticipations, do more research to find out why.
Was the targeting not precise enough? Was the content not adequate for the audience? Did you invest too little? When you find out the reasons, adjust your strategy and set your budget accordingly.
How much is everyone else spending?
The latest CMO survey indicates that businesses are currently spending 12% of their total marketing budgets on social media.
This is a 3,5% growth compared to 2009 when this survey is done for the first time. The increase is predicted to continue and reach 20.5% of companies’ marketing budgets within the course of five years.
The way these funds are allocated vary depending on your target audience and your online strategy.
A part of it can go for content marketing, part for visual equipment (photographs, videos, GIFs, and so on), part for paid advertisements, etc.
Of course, your position on the market makes an important factor in the budget. If you are only just starting, you need to think even more about the budgeting. Startups find it hard to set aside a significant amount for marketing, but it is necessary.
Some of the sources of finance you can think about are investors, bank loans, commercial mortgages, short term loans, and business credit cards.
Where to allocate your budget?
The key results from the mentioned survey show that companies are allocating their social media funds for the following goals:
● Brand building and brand awareness
● Acquiring new customers
● Introducing new products and new services
● Retaining current customers
Out of these four, the ones that impact the company performance the most are brand building, acquiring new customers, and retaining the current customers.
Introducing new products and services can always be useful for achieving the three mentioned goals.
Other, secondary objects businesses can achieve through social media marketing are brand promotions (e.g., coupons and contests), marketing research, identifying new audience to target, identifying new product opportunities, and improving the current offer.
How to Budget for a Social Media Program:
Which platforms to use?
The top two platforms that marketers from social media marketing agencies listed in order of their positive impact on the performance and ROI are Facebook and LinkedIn.
Facebook with its 2.2 billion users allows access to a diverse and enormous audience and enables sharing and promoting different types of content, ranging from images to videos.
LinkedIn, on the other hand, doesn’t even reach one billion when it comes to the number of users, but being a network for professionals, it is ideal for B2B marketing.
Instagram and Snapchat speak to a younger audience and rely mostly on the visual aspect of digital marketing.
The amount of money invested in each of them (or some of them) will depend on the product you are selling and the targeted audience.
Social media spending categories
There are five essential categories where a business can allocate social media marketing funds:
1. Content creation: This part covers the outsourced or in-house employees’ time needed to write, create, and design content, plus fixed costs, such as video production or stock photos.
In-house employees are usually paid by the hour, while the freelancers are paid by the project.
2. Paid social advertising: Paid native or boosted ads can be estimated with a content calendar. Setting ‘per day’ limits will help you get a clearer picture of the spending.
3. Social engagement: This covers the cost of employees answering and reacting to customer feedback.
4. Tools/Software: Social media monitoring, automation, and software services do not come for free. Break down this category into monitoring, planning, scheduling, research, and automation to get a clearer picture.
5. Promotion/Contests: These are the expenses for rewards, discounts, and special offers that are often offered through social media platforms and advertisements.
Setting and allocating social media budget in these circumstances is a challenge for both startups and already established businesses.
The trouble is that there is no clear pattern to go by because everyone has different goals and prerequisites. However, this article can serve as an outline you can change and adapt to your needs and objectives.