Nowadays, it’s prevalent to see businesses planning a huge social media marketing budget. It’s even more common to see them struggle as they're not sure of how much should they spend on social media or which channels can drive the best ROI for their businesses. Social Media Budget is treated in isolation and many a times executed without a clear strategy. Not the wisest thing to do!
What you need to do is zoom out a bit and have an overview of how creating a budget for social media can influence your business.
Importance of creating a realistic social media budget
Creating a realistic social media budget for your business can truly pay off. Let's dive in to look at how it can benefit your business.
- A reasonable social media budget can spare you from the risk of making impulse marketing decisions that won’t generate the desired outcomes.
- It provides a reason for surveying real results. The amount you spent versus the amount you earned from a specific advertising source.
- It helps to allocate scarce financial resources more effectively.
- A fair-minded social media budget will make your plan successful! If you know how much you have in the budget to spend, you’ll have a better idea of which marketing avenues to pursue to amplify your marketing ROI.
So now you've known how creating a realistic social media budget can benefit you, let's dive in to see how you can bring the most value out of every penny!
Update: This week at Statusbrew, our team stopped by to share the insights on - Social Media Budgeting. If in case you missed our webinar, don’t worry! You can now access the full webinar recording here. Also, you can find the slides of the webinar here
Few essential things you need to know to maximize your social media advertising budget!
In this article, we'll be sharing all of the remarkable insights that were discussed during our webinar on social media budgeting. We’re going to focus on answering questions involved in creating and maximizing your social media budget.
- How much should I spend on social media?
- Is it necessary to define the target audience?
- What social networks should I focus on?
- Which social media platforms are best for advertising?
- Can creativity impact cost & return on investment?
- Should the budget be spent on video or static image advertising?
- How much to budget for each activity involved in social media advertising?
We'll also talk about the important things one need to keep in mind for a more informed budgeting process. Let's dive in!
1. How much should I spend on social media budget?
Before we get into answering the questions in regards to maximizing your social media advertising budget, I thought it’d be thought-provoking to see exactly how much social media takes up in an average digital marketing budget across the industry.
- Most organizations spend about 5% to 15% of yearly revenue on marketing
- Of the total marketing budget, the average firm was expected to allocate 42% to online marketing in 2018, and this rate is expected to grow to 45% by 2020
- Of the digital marketing budget, about 15% to 25% generally gets spent on both organic and paid social media marketing endeavors
How does this compare to yours? Is your social media budget much lower as compared to the figures given above?
Well, you don't need to worry!
Keep in mind, spending more money doesn’t always pair with greater success. I've heard of companies that have fallen flat on face after spending millions on marketing and others that have had success advertising on social platforms without spending much.
Thus, rather than asking how to set up social media marketing budget or how much should I spend on social media advertising, figure out how to continue with the budget you’ve already set, and plan to spend it well without wasting money on ineffective practices.
2. Is it necessary to define your target audience?
One of the biggest mistakes that budding personal brands make is trying to appeal to everyone. Keep in mind, not everyone is your potential customer! If you do not determine your target audience, you'll end up wasting a considerable amount of money to get out to people who are not even your desired audience.
Thus, keeping all this in mind, it has become essential to define your target audience. Once you discover your target audience, it becomes easier for you to make effective decisions on budget allocations. We'll discuss more about other benefits of defining target audience in the next point.
3. What social networks should I focus on?
Knowing your potential customer/audience is crucial when choosing a social network. Rather than wasting your time or resources to be active on all social networks, you need to know which ones your target audience use.
For instance, If your target market is people belonging to the age group 50-64, there is no need to market on all the social media networks. You can advertise only on social media marketing platforms that are popular with that audience.
You’ll get a better return on investment and save a great deal of money by knowing who your target audience is. It will help you spend your social media budget wisely and efficiently as the number of the wasted audience (those unlikely to buy your item) is significantly reduced.
Along with knowing your audience, customer and your business, you should also understand the benefits of each social platform.
- Twitter: It is an open platform that is best for fast-paced and consistently evolving businesses. It enables people to share breaking news, relevant messages, announcements, and updates about their company. Find the complete Twitter marketing guide here. (Content-Type: GIFs and textual content, like articles news)
- Facebook: It is the largest social platform in the world, with more than 2 billion active monthly users. About 61% of users are Americans between the ages of 25 and 54. Facebook works well to create awareness, generate leads, and keep the conversation going with your prospects. (Content-Type: images, videos, and textual content)
- Pinterest: Like Instagram, Pinterest is a visual-based social network boasting more than 100 million active monthly users. Regardless of what type of product you sell, Pinterest is perfect for you. According to Shopify, 90% of users plan their purchases using Pinterest.
- Instagram: It is a visually driven social media network that has a younger audience. If you belong to industries like fashion, cosmetics, food or art, this platform will work very well for your business. Get your Instagram marketing guide here. (Content-Type: High-res images, stories, and quotes)
4. Which social media platforms are best for advertising?
A captivating aspect concerning social media advertising is that there is virtually no limit to your ability to scale. It can help you reach thousands of people without having to wait for them to search for your keywords or read your blogs.
But that doesn't mean that you start throwing money away by advertising on all the social media networks!
Every week new social media networks come out, but not every one of them will help you draw in a considerable number of customers for your business. Most of them will never even gain any traction.
Subsequently, if you want to maximize your social media advertising budget and abstain from wasting money, it becomes essential for you to make a savvy choice of social media marketing platform!
I'd suggest you start with choosing from among the most popular platforms, at that point once you have beneficial frameworks running, you can look at allocating a percentage of your budget toward more experimental campaigns.
In 2018, Facebook, Instagram, Twitter, Pinterest, LinkedIn, and Snapchat are six distinctive social media channels where you can start advertising and produce steady ROI.
5. Can creativity impact marketing cost & return on investment?
Restrain yourself from constant selling with newspaper-style “Purchase, Purchase, Purchase” promotions. Start being creative on social media!
Many businesses find that efforts and investment on creativity pay off over the long haul. Social media channels are likely to watch out for advertisers who are conveying quality substance and advertisers who miss doing that.
Majority of the social networks want you to make money, but not at the expense of user enjoyment. Innovative, top-notch advertising efforts connect with audiences better, gain organic momentum, and are more likely to get comments, likes, and shares.
For instance, social media channels like Facebook will even empower an advertisement to perform better if people appear to be enjoying (like and share) the content. In other words, good quality content has a capability maximizing your budget by achieving more clients at a lower cost per interaction.
6. Should I spend the budget on video or static image advertising?
Lots of marketers use social media, but many of them aren’t allocating the advertising budget wisely.
My sincere belief is that you should invest a part of your social media marketing budget on video advertisements.
Even though creating videos is more challenging and more costly than delivering a static picture, they’re insanely useful. A business is likely to make a more significant impact and drive more engagement with a video advertisement.
As indicated by a test done by 'social media today' on Facebook Ad Format Comparison, for half the ad spend of the static ads, the video campaign generated almost 3x as many conversions – an increase of 196%
The video campaign knocked down the static image campaign out of the field in every single measure - clicks were up by 59 percent, reach was up by 34 percent, and CTR by 61 percent.
Thus considering all these numbers, all you need to do to get the most of your social media budget is - make a memorable video that highlights the benefit the viewer will get from your product and set up the ad. Go ahead, and you'll see the wonders happening!
7. How much to budget for each activity involved in social media advertising?
If in case you believe that 'ad spend' is the only cost involved in social media marketing, you are presumably wrong!
It is just the piece of the expense. While designing a budget you have to think artistically and broad-mindedly so that you don't miss out on any aspect! Whether you hire a social media agency or you handle the work in-house, you need to save your budget for forming the strategy, creation and production of the ads, writing the copy, measuring the performance and managing the complete process.
For instance, suppose you already have social media marketing budget planned! Thus, to start with, here is the rough estimation of how you can allocate the budget to each of the various activities involved in social media advertising.
- Strategy 10%
- Project Management 5%
- Design, Graphics, Videography, Visuals 30%
- Ad Spend 40%
- Copywriting 10%
- Tracking Results 5%
There is no hard and fast rule that you always need to allocate the budget according to the estimations given above; the budget allocations can vary according to the needs and goals of the companies! Every company is unique in itself. They have their own needs and have their specific niche and audience to serve. What we want to share here is that social media budget allocation is more about how much money you need to give to each of the tasks for the coveted results and for their smooth completion!
Other important things that you need to keep in mind for a more informed budgeting process are as follows:
Set your goals: So when you start with planning your budget, the primary thing that you have to do is get your priorities altogether. Clearly define what's the reason for you to be on social media! What do you wish to achieve - increased brand awareness, more traffic to your website, generate new leads? Or maybe all of these. Without goals and objectives, you will end up wasting your resources.
Set deadlines: We typically set our goal yet neglect to set a specific time by which we wish to accomplish them. Therefore, for the timely accomplishment of your goals, you need to set the deadlines. You have to characterize that early, so you know what you’re aiming at and what you need to prioritize.
Prepare for the risk: Planning the objectives and setting the due dates is unquestionably insufficient for coming up with an informed budgeting process. You also need to make sure that you've enough resources in case of occurrence of the risks! The risk is inherent with any marketing plan, and the companies should assess the risks persistently and create strategies and budget to address them.
Track, analyze & optimize: A perfect social media advertising budget is never finalized, it is regularly analyzed and optimized to produce the most significant returns. You can use Statusbrew's analytics to track the engagement your campaigns receive, audience growth, impressions, and other crucial metrics.
Statusbrew is an all-in-one solution for social media management (an essential component of any social media budget). Try it free today!
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Creating a budget for social media and further maximizing it can be a daunting task, however, a fundamental one for the success of your business.
If you want to get the most out of your budget, you have to frame a powerful strategy by continually analyzing what you’re doing. Only this way you will be able to guarantee that you're not losing too much money and instead benefit as much as possible from your budget.
What strategies do you use to amplify your social media budget? Let’s discuss in the comments👇
Also, feel free to schedule a conversation with us in case of any further queries.