When it comes to scaling your ad production, one of the biggest questions you have to contend with is how much of your budget to allocate to what goals. Setting your budget is an important, critical first step when it comes to social media spending.
The following is a guide on what to consider if you’re at the phase where you’re setting a budget for the first time, or maybe you’re thinking about shifting some resources and making some changes in your approach.
The Basics of Budgeting
Your social media budget is something that specifically defines what you’ll spend on social media for a given period of time. This might be a month, a quarter, or perhaps a year.
Your social media budget will be one of the important tools that you’ll use to calculate your return on investment.
There’s not any hard and fast rule for what a business should be spending on social media, but in order to scale up and make the best, most effective decisions, you will need to have a set budget that you follow and that you can then change as needed.
Some recommendations say that you should generally plan to spend anywhere from 2-5% of your revenue on marketing if you’re a B2B company. Following the same guidelines, you might spend around 5-10% of your revenue on marketing as a B2C company. This is for all of your marketing and not just your social, but it does give you a starting point or a general framework.
According to one survey from 2021, businesses planned to spend around 14.7% of their overall marketing budget on social media in the next year if they were B2B product-driven.
For B2B services, that went up to 18.3%, and it was planned that B2C companies selling products would allocate around 21.8% of their digital marketing budget to social media. For B2C services, the survey found social spending would make up around 18.7% of their budget over the next year.
Some of the costs you need to include in a budget plan for social media include:
- Content creation—this can include everything from images and photos to copywriting, editing, and video production.
- Tools and software—this can include the costs of things like your social video tools, tools for design and editing, and project management and collaboration tools.
- Paid campaigns—most of this guide is focused on your paid social spending. Paid media strategy can include the costs of ads on whatever platforms you’re using, including Facebook, Instagram, LinkedIn, and Pinterest. You’re going to have to test here and do plenty of experimentation to figure out how to maximize your ROI for paid ads.
- Influencer marketing—if you partner with influencers or content creators, you can expand your reach on social media. You do have to pay to boost the Influencer posts in many cases, plus when you partner with content creators, you pay them as well. Smaller influencers may be willing to use affiliate commissions.
Ad spend only going to be part of your costs overall when it comes to social advertising. We included it above in its own category, but really all these spending categories are going to work together, and it will be difficult to look at one without the others.
If you’re a small business or you want to do things yourself, your budget might include investments in your own education or educating your team.
You need a budget because it’s going to help you stay on task with the creation of your ad creatives. You can prioritize, and you can also figure out largely how important social media is for your marketing strategy.
Know Your Goals
Once you understand the basics, the first thing you can do to create a social ad spend budget is to know what your goals are.
Your goals will drive your decisions going forward.
You can use SMART Goals. These are:
- Specific
- Measurable
- Attainable
- Relevant
- Timely
Define Your Audience
You can’t advertise to everyone on social media or otherwise. That’s one of the biggest lessons businesses have to learn when it comes to budgeting and strategy on social media.
After you set your general goals, you want to know who you’re targeting and where they’re spending time.
You need to know the key characteristics of your targeted audience because this is going to help you drive everything from the copywriting to the videos and visuals you use.
It’s also going to help you prioritize where you should be spending money.
For example, if your audience isn’t typically on Facebook, but they are on Instagram, this is already going to help you drive your strategy.
Create Different Types of Content
You’re not going to know right off the bat what the best types of content will be for your business.
You are going to create different types, and then you’re going to test them out.
The overarching takeaway when it comes to the types of content you’re going to use is that most people on social media prefer videos as opposed to reading text.