Every business—small, medium, or large—should have a social strategy, and every strategy should be backed by a social media budget.
Budgeting helps you ensure you’ll have the funds to achieve your goals, whether that’s promoting a new business or driving sales on a new product. Plus, without an accurate social media marketing budget, it’s impossible to know the true ROI of your work.
There’s no such thing as a one-size-fits all social media budget. Every company has different resources and different priorities. But whether you’re working with a shoestring or cushy budget, these are the key components your should figure into your calculations.
How much money should you spend on social media?
Social media marketing is crucial: Nearly one in every two people on the planet has a social media account—and that figure is growing. But remember, your social media budget should be one piece of a larger marketing pie.
According to the Business Development Bank of Canada, a common rule of thumb is that B2B companies should allocate 2-5% of revenue on marketing, while B2C companies should spend between 5-10%.
The same research found that small businesses in Canada spend an average of $30,000 a year. Mid-sized businesses (20-49 employees) spend an average of $60,000, and companies with more than 50 employees spend more than $100,000 annually.
So how much should social media marketing cost? Before deciding how much of your marketing budget to allocate to social, research your customers and determine how social media will help you achieve your marketing objectives. For instance, if a significant percentage of your sales come from the Internet, it may make sense for your brand to spend more on social media than print, broadcast, direct mail, or other marketing channels.
According to this year’s CMO Survey over the next five years, the percentage of marketing budget spend on social media breaks down as follows:
- B2B Product: 16.6%
- B2B Services: 20.5%
- B2C Product: 20.9%
- B2C Services: 24.7%
Use these averages as benchmarks for your business, and then tailor them around your goals and resources.
6 components to include in your social media budget
These are the core components you should include in your social media marketing budget.
1. Content creation
Content is and always will be king. And as such, it should account for a significant portion of your budget. Many social marketers spend more than half of their social media budget on content creation alone. Here are some of the line items you may need to include in this section:
- Photography and graphics. The importance of high-quality visuals can’t be understated, which is why setting aside funds to hire professional photographers and illustrators is worthwhile. If your budget is tight, consider these 20 free stock photo sites.
- Video. From cameras and equipment to videographers and editors, production costs range depending on the project. For high-production shoots, directors, producers, location scouts, stylists, and other staff may also be required.
- Talent. From actors, models, and extras, to social media influencers, be prepared to compensate your stars.
- Production costs. Factor in related production costs, from travel and meal expenses to props and location rentals.
- Copywriting. Copywriters are paid by the word or by the hour. A good guide for rates can be found on the Editorial Freelancers Association website. Depending on the material, it may be necessary to budget for a fact checker and proofreader as well.
- Translator. If you’re a global brand or serve customers in multiple languages, be sure to budget for a translator. Like copywriters, translators are typically paid by the word or hour.
2. Software and tools
Equip your social media budget with these tools and platforms.
- SEO and keyword research. Use Google AdWords to research and bid on relevant keywords. This can also be used to inform your social content strategy.
- Content hosting. Your website, microsites, and landing pages will need to be hosted. Some of these hosting providers include domain names, but if not, that will need to be purchased, too.
- Editing tools. Creators deliver brand assets, but it’s useful to have tools such as Adobe Creative Cloud in-house for various editing needs, from image resizing, to applying branding.
- Project management systems. Platforms like Trello or Wrike can help to streamline production and project management behind-the-scenes.
- Social media management platform. We’re obviously partial to Hootsuite, especially thanks to its time-saving scheduling capabilities.
- Marketing automation. Tools like Marketo and MailChimp can help with email marketing and more.
- Analytics tools. Track your social media campaigns with tools like Hootsuite Analytics.
3. Paid advertising
All social media strategies should include organic content and—if your budget allows—paid advertising. Every social media channel offers marketers ways to boost posts or run full-fledged campaigns, here are some that you might consider including in your social media budget:
- Facebook ads. From slideshow to Instant Experience ads, Facebook offers a variety of formats, campaigns, and targeting capabilities.
- Facebook Messenger ads. Placed in the Messenger inbox feed, these ads can be good at starting conversations.
- Instagram ads. Backed by Facebook’s campaign capabilities, use Instagram ads to reach its community of one billion monthly active users.
- LinkedIn ads. Reach a professional audience with sponsored InMail, text ads, and more.
- Pinterest ads. Pinterest’s promoted Pins will help you reach its DIY network of planning Pinners.
- Twitter ads. Drive website clicks, Tweet engagements, and more with Twitter’s suite of ads options.
- YouTube ads. Formats on YouTube range from non-skippable video ads to TrueView ads to boosting your own videos.
- Snapchat ads. Branded filters, story, and collection ads might be right for your next social campaign.
- TikTok ads. The popular-with-teens video app has opened things up to advertisers with full-screen ad placements, hashtag challenges and more.
4. Paid partnerships
From influencer marketing to co-branded campaigns, pad your social media budget with room for paid partnerships, if they’re part of your strategy.
- Influencer campaigns. Social media influence rates can vary, but you can use this basic formula as a benchmark for your budget. From Instagram’s partner tag feature, to YouTube influencer partnerships, there are many collaboration possibilities your company should budget for.
- Co-branded campaigns. They may not require more funding for content than a typical campaign, but they will demand organization and planning time from the appropriate personnel.
There are lots of free social media training resources out there, but it’s always worthwhile to invest in training for your team. Depending on your team’s skill levels and campaign needs, these are a few training options you should consider including in your social media budget:
- LinkedIn Learning. If LinkedIn’s community is a target demographic for your business, these online courses may be worthwhile.
- Blueprint Live. While Facebook’s one-day workshops are currently invitation only, keep an eye out for sign-up options in the future. Meanwhile, consider Blueprint certification courses or free Blueprint e-learning classes.
- Hootsuite Academy. From single courses to certificate programs, Hootsuite Academy offers a catalog of courses taught by industry pros and tailored for businesses.
While there are tools or outsourcing options for social media management, it’s good practice to have at least one person in-house supervising social at least part of the time.
Social media managers or teams must oversee:
- Social media management (scheduling, publishing, listening, engagement)
- Audience research and growth
- Strategy and analytics
- Content creation
- Community management
- Campaigns and promotions
Looking to hire or become a social media manager? Here are the essential skills every candidate should have.
Make the most of your social media budget and easily manage all your social media profiles using Hootsuite. From a single dashboard you can schedule and publish posts, engage your followers, monitor relevant conversations, measure results, manage your ads, and much more.