Contrary to the nomenclature, a social media budget should focus on more than just dollar signs. A good budget requires research and development, as well as resources.
Every organization—from billion-dollar global companies with multiple marketing departments to smaller nonprofits with social media armies of one—should take a look at where social media fits into their overall strategy. And then you can begin to build a budget. Here are some suggested steps.
First, conduct an audit
Before rolling into a new budget, it’s good to take a look at what is and isn’t currently working. Companies like Hootsuite and Buffer offer free templates to carry out an audit. Look at data from every platform from the past month or year, and find the successful content and posts that resonate with your audience. Dive into your insights to discover who your audience is. Are you delivering where you want to be? Looking at the numbers will also help to create baselines for average engagement, reach, and more for developing future goals.
Before going all in on a social program, it’s good to sit down and assess your KPIs. It’s even better if you can clarify your KPIs for social with other departments, as well as to find the ROIs executives are looking for, and make it a part of the overall plan for the organization.
Caroline Jones, executive director of Social Media Club, acknowledged that many goals do not incorporate the difference between KPIs and ROI, and that puts a stress on their definitions for success.
“In order to be successful, marketers should understand the difference between a key performance indicator and a return on investment,” Jones said. “A KPI lets you know how well your business performs on social media, while ROI lets you know how well your business generates sales and revenue."
Jones said naming engagement as a number one measurement of ROI can lead organizations down the wrong path for the long run, and that "social goals should be directly connected to revenue growth objectives."
Jess Spar, paid social director at Deutsch, agreed that a social budget should be part of a more comprehensive strategy. “Social should not live in a silo, and should be leveraged to fit a brand's business needs,” said Spar. “Social should be looked at holistically within a media plan to fit goals accordingly—whether it's to amplify efforts on TV by creating an optimal cross-platform reach per frequency, to offer the opportunity for brands to advertise in a more targeted way, or create advertising opportunities when budgets are limited.”
Ask these questions: What do you hope to accomplish with this tactic or spend? Are you looking for reach or impressions? More engagement? Do you want to refer traffic to your website or sell products through the platform? Are you looking to build an audience? Are you trying to target the existing audience? Take a look at your baselines calculated from your audit and set realistic goals for growth from there.
“A large bank with a brand lift goal may want a 50/50 split between TV and social because leveraging the two together provides more lift than either alone,” Spar said. “But a small business trying to acquire clients may not have the budget for TV, so the recommendation may be to focus on search and social, with a 60/40 split. It's important to understand the business needs and limitations when recommending budgets for social.”
Tactics and Diversifying Budget
There’s more to a social budget than just paid posts. Someone has to create those posts. And someone has to design those posts or film that video. It’s essential to determine how much money you will need for not only the actual platform ads, but the resources incorporated into a social strategy as well. Does your content include design or digital work? Do campaigns include an influencer portion? Is any live community outreach planned? Is the work outsourced or done in-house?
Smaller companies and nonprofits may not have the ability to go all out with content creation, so it’s important to make the right hire for your team.
“If you don’t have access to a production team or photo studio, make sure to hire a social media person who can shoot with a DSLR and is savvy with their cell phone, said Monica Fineis, director of social and digital media for Brooks Brothers. “It’s so important for a company to be able to create content quickly and through the lens of your brand.”
According to Buffer, the average social media budget runs between $200 and $350 per day. Social media spending takes up 12 percent of a marketing budget and continues to increase annually. In Buffer’s 2019 State of Social, 65.6 percent of brands planned on increasing their social media advertising budget for the year. Prepare your strategy, and don’t be afraid to ask for what you need. With transparency comes an understanding and a willingness to work towards shared goals.