One of the questions we’re asked most often from prospects and clients is: How do I determine what to budget for social media marketing? I’ll address this in two ways. The first will lay out how to literally go about calculating a social media budget for 2016. The second will address some general principles for allocating and using whatever budget you determine for your business.
Creating a Budget
The first step in calculating a social media budget is to determine your overall marketing budget. This should be based on your total revenue, industry, and maturity of the current brand. For example, let’s imagine you have a two-year-old technology company that has a fairly competitive landscape. It’s safe to say you’ll want to allocate 15-20% of your revenue for marketing.
If you do not know these numbers and/or you don’t have a set overall marketing budget, STOP HERE and reevaluate your plan. This is the single biggest mistake we see with prospects who contact us for help. They are still thinking month-to-month, which makes it illogical to outsource any type of marketing.
If you have a marketing budget allocated, the next step is to determine if you’re adding budget or stealing it from another marketing source. While this is important to determine for your internal business, the process for allocating a social media budget works the same way. Evaluate your worst performing marketing efforts (based on your ROI metrics) and determine if the objectives and goals for those marketing initiatives can be reasonably accomplished through social media.
Were you sending out direct mail in order to get someone to go to your website and potentially sign up for an email newsletter? That is a good candidate for moving budget to social media. It’s an objective that can be reasonably attained. Determine the revenue generated from those initiatives you’ll be replacing in order to get your target ROI number for social media budget you’ll be using. Again, if you don’t have these metrics (i.e. each email address gained is worth approximately $25 in yearly revenue to my business), you need to start tracking them to determine the effectiveness of any marketing on your business.
Allocating Your Budget
Now we’ll talk about some general rules for allocating whatever social media budget you’ve calculated.
1. Diversify to the extent it makes sense.
You will need to pay for SOMETHING. Whether you’re spending money for ads on social networks, fees to an agency, or maybe just a freelancer writing blogs, you need to choose your battles wisely. The key is to pick the right things and do them well vs. doing everything poorly.
2. Market with a (multi-)purpose.
Maybe you’re writing blogs but not spending budget specifically for search engine optimization. Do a little extra legwork on the most popular keywords and make sure you’re trying to use them in the blogs. If you take on a larger content project like an eBook or whitepaper, make sure there are plenty of “bite size” points that can be pulled out to use multiple times in social posts or micro-blogs. Additionally, make sure you’re using that same content to drive lead generation through ads, posts, and email marketing.
3. Give yourself a buffer.
You’ll invariably want to test a new ad type, a new platform, or even a new content source at some point throughout the year. Additionally, we’ve seen some fairly drastic price increases for media within a given year. Make sure you have some extra dollars ready to cover experimentation. The worst feeling in the world as a marketer is to see something taking off and being unable to jump in on it because of budget. Or to have optimized a marketing initiative, only to be priced out in the middle of the year. CYA with your budget to avoid some of these pitfalls.
If you have a plan, any plan, then you’re ahead of the game. The next steps are refining it to make sure you’re allocating enough resources to make your goals.
This article was syndicated from Business 2 Community: How to Set the Right Social Media Budget in 2016
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