Social media marketing spending is up and social media strategy is maturing. In a previous post, I explained how a Social Media Metrics Template can help track increased spending to company performance. The CMO Survey reports average spending on social media marketing is 16% of marketing budgets. Yet, there’s no guarantee you will get that amount of money for social media, and if you do how do you know what to spend it on?
Photo by Kelly Sikkema on Unsplash
Few managers or clients will approve a social media strategy without knowing the cost and how that money will be spent. To estimate the cost of a social media plan I created a Social Media Marketing Budget Template in the first edition of my Social Media Strategy book that is still relevant today. It breaks down costs into five expense categories: content creation, social advertising, social engagement, software/tools, and promotions/contests.
Each category is also divided by in-house costs (to be performed by employees) and outsourced costs (to be hired out). The template also calculates the percentage of each item under categories and the percentage of each category out of the total budget to understand where the most money is being spent.
After running the plan and getting some KPI metric results, you’ll have an idea of how each category is contributing to overall success. Based on evaluation results consider adjusting budget category percentages to match contribution level.
(Click on the template image to download a PDF)
Content Creation Is Time And Assets Used To Write And Design Posts.
Estimate the time to create content in a month. You can get an idea of how much content is needed from a content calendar. For in-house employees, divide salary into an hourly rate. For outsourced help, use their hourly rate or their cost per piece or project. Include any fixed costs such as stock photos or video production.
Social Advertising Is Paid Outsourced Costs For Reach Per Platform.
From the content calendar estimate paid posts. Calculate costs based on current rates per social platform. Most brands buy social ads with set per-day limits. Estimate spending per day, per platform, multiplied by the number of days you expect to run social ads in a month. Then include influencer marketing spending which is often negotiated with a per-post cost. Add the number of posts multiplied by each creator’s per-post rate to estimate monthly expenses.
Social Engagement Is Cost To Listen And Respond To Brand Talk Per Platform.
Live engagement can’t be planned, but you can estimate the cost based on current activity. Get an idea of the level of brand engagement needed from a Social Media Audit. Does the brand typically get hundreds or just a few dozen brand posts a day? From that estimate the hours per day needed to engage all or a percentage of those consumer brand posts. Multiply the number of hours by employee or outsourced rates.
Software/Tools Cover Costs For Social Monitoring, Scheduling, and Analytics.
This category is broken into monitoring, scheduling, and analytics. More specialized software may require additional categories such as consumer research, automation, or AI. You may need to subtract categories if your software solution covers multiple functions. Or a software solution may provide services outside social media such as Salesforce CRM. In that case, divide a percentage of the cost for the integrated system by social media–only services.
Promotions/Contests Are Costs For Prizes, Discounts, Coupons, Or Offer Codes.
Besides buying reach through social ads, many businesses build audience and engagement through special offers and contests. Estimate the costs for offering these sales promotions per campaign. You may have seasonal and holiday campaigns, new customer and event promotions and contests. Included with a monthly expense estimate.
How Do You Know If You’re Spending too Much or too Little?
Add totals per month, per line item, and per category. Then calculate a percentage for each category and category percentages for the total budget. Over time seek to balance spending in each category based on results. Investing in software tools may free up time to be spent on engagement to increase performance. Investing in automation or AI tools may free up employee/outsource costs to invest in social ads.
You can also seek insights from other social media marketers. Join social media professional groups and ask what they tend to spend on various categories. For example, one survey found that top social media costs were internal employee compensation (37%), followed by social media advertising (18%), external staff compensation (10%), and content costs (7%).
Another way to put total social media budgets into context is to compare to competitors. In a social media audit, you may notice a more successful competitor engages fans more and uses more social ads or influencers. You could recommend a similar social media strategy and your budget becomes an estimate of costs to match the competitor’s level and type of activity.
Social budgets can also be compared to industry standards by looking at typical percentages of social media spending. As we saw at the beginning of this post the latest CMO Survey reports average spending on social media marketing is 16% of marketing budgets. But this average varies based on the economic sector from B2B products (8%) to B2C products (22%). To check the latest averages, visit cmosurvey.org/results.
Sometimes a boss or client will set a specific budget based on what they can afford or what they have left over. Then your social media plan and objectives may need to be adjusted to fit available resources.
Budgeting in social media can be complicated. However, taking a step back and calculating costs based on categories and in relation to marketing spending averages can simplify the process. If you’re budgeting against a solid social media plan tied to business, marketing, and/or communications objectives a budget with the right metrics in place can help justify ROI.
This Was Human Created Content!
