As a marketer and having worked on Social Media for some time, I have seen a lot: from clients trying to run campaigns for less than $10 a week to people with big budgets that don’t get used.
I get it: is not easy to do budgeting. A lot of factors are involved in deciding where to invest your hard-earned dollars. While I am sure you understand the basics of business and budgeting, understanding the basics of social media budgeting can empower you to make informed decisions.
What is Budgeting?
At its very core, budgeting is nothing but planning your spending. A budget is a plan you write down to decide how you will spend your money each month, and yes, it should have been a crucial part of your 2024 Strategic Planning.
As a business, having a clear budget helps you not run out of money and it is an essential part of keeping your operations going for a long time: your budget impacts your business one way or the other.
Your Marketing Budget
When deciding your marketing strategy for the year, there are several factors you have to consider:
- Your Goals for the Year
- Your Audience and where to find them
- Your Previous performance
- Your Current Financial Status
Once you have a defined strategy, the budget allocation will depend not only on the size of your business but on the strategy itself: depending on where you are aiming and who you are trying to reach, you might need to allocate more or less budget to certain areas.
Budgeting for a Social Media Campaign
Let’s open this section by saying something very important: budgeting for a social media campaign is not a one-size-fits-all approach. A good social media budget is usually not a number set in stone but one that produces a positive return and good results: a successful social media budget is dynamic and responsive to your specific goals and audience.
According to Hootsuite, a small business should spend 8.7% of its annual company revenue on marketing, with a portion of this put aside for social media. Depending on your business and the industry, this could vary from 12-18%, but again, this is a suggestion: deciding your budget implies more than just following what others do.
How Do I Decide How Much to Spend? Budgeting for social media:
Besides basing yourself on your already allocated marketing budget, the budget for your Social Media Campaign should consider the following factors:
1. Campaign Objectives
Are you aiming to increase brand awareness, drive website traffic, or generate leads? Depending on what your final goal is, the budget might vary. Make sure to have a clearly defined objective before you start using your dollars to advertise.
2. Target Audience:
As we have mentioned in a previous article, defining your target audience is KEY. If you are targeting Baby Boomers, investing your ad dollars on TikTok might not be the best approach. Identify the platforms where your audience is most active and allocate budget accordingly. It’s not about being present everywhere but being present where it matters.
3. Past Performance:
If you go to a new restaurant and decide you do not like the food, you most likely wouldn’t go back there and order the same plate, right? The same thing should happen with your advertising dollars: if something did not work well in the past, do not invest your ad budget in it again. Adjust your budget based on the platforms and strategies that have proven effective, or try new ones that might yield results.
4. Competitor Analysis:
As underrated as benchmarking is, keeping an eye on your competitors might bring benefits to you and your ad budget. What are they doing on social media, and where are they investing? This insight can help you refine your budget allocation to stay competitive.
5. Seasonal Trends:
We all know that there are certain times of the year when advertising costs go up and when EVERYONE is running ads – like Christmas – consider the seasonality of your business and industry: selling bikinis in winter might not be as profitable as selling them in the summer. Make sure to adjust your budget to align with both trends and seasonality.
Once your budget is set and your campaigns are running, make sure to monitor the campaign’s performance closely:
- Track key metrics
- Review analytics
- Assess your ROI (Return on Investment).
Be prepared to adjust your budget based on real-time data and insights gained during the campaign.
Remember, social media budgeting is an ongoing process. Regularly revisit and refine your budget to ensure it aligns with your evolving business goals and market dynamics.
Not sure where to start or how much budget is adequate? Reach out! Let’s discuss your goals and plan together for a successful campaign!
