How Much Does Social Media Marketing Cost?
The True Cost of Social Media Marketing
So, you’ve started a new business and you need to amplify your brand’s messaging using social media and you need professional help, but, you are not sure how much you need to budget for using a social media marketing agency, or, how much to pay an in-house SMM? In this blog post, we will reveal all, we will provide you with the expected costs for content strategy, content planning, content creation, social media tools, social media advertising and much more. If you don’t want to read the entire post and want a simple answer, the cost can be $500 for a DIY low budget solution to $20,000+ per month enabling you to work with professional photographers, strategists and agencies. Keep reading for the nitty gritty details.
Here at The Branded Agency, Social Media Marketing services for startups and small businesses start at $3,500 per month and cap out at $50K per month for larger packages, if you want a quote, contact us for details.
You may also be interested in: “How much does product photography cost?” and “How much does branding cost?”.
Social Media Marketing
As of October 2023, the top social networks worldwide, including Facebook, Instagram, and Twitter, have a staggering number of active users.
To illustrate this, take a look at this informative chart that showcases the most popular social networks worldwide, ranked by the number of active users.
With such immense potential, incorporating social media marketing into your digital marketing plan is a must-do for any business looking to achieve success in today's competitive landscape.
The numbers don't lie: social media is an unstoppable force in today's digital age. In fact, according to the reputable data analytics company Statista, an impressive 3.6 billion people worldwide are currently using social media platforms, and that number is projected to soar to a whopping 4.41 billion by 2025.
Think about it - that's billions of individuals interacting, posting, subscribing, forwarding, tagging, tweeting, and pinning each and every day across these platforms. As a marketer, the potential to tap into this massive audience is enormous.
In this article, we'll delve into the costs associated with social media marketing (SMM) and provide you with guidelines for creating a budget that aligns with your business goals. With the right strategy, your brand can reach and engage with the perfect audience on social media, leading to increased visibility, brand recognition, and ultimately, conversions.
So, if you're ready to take the leap and harness the power of social media to boost your business's bottom line, keep reading. We'll show you how to create a winning social media strategy that maximizes your ROI and takes your marketing efforts to the next level.
The Power of Social Media Marketing
It's an integral part of today’s marketing world.
Results from a survey involving over 2,500 digital marketers reported that email marketing was still the highest ROI generating channel.
Social media marketing narrowly missed the top spot by the size of a bee’s reproductive organ.
Unfortunately, as many as 93% of small businesses struggle with social media even though these platforms have become universal.
Yes - it really is difficult to capture solid leads on social media, let alone customers… especially if you don’t know what you’re doing. So what can be done?
The Age Of ‘Pay-To-Play’
A decade ago people weren’t sure about how Facebook made money, which is crazy in hindsight. Let’s get one thing straight. No one these days would read a 130-word article called “How Does Facebook Make Money?” unless they’ve been living in a cave for the past 10 years.
There was a time when it was easy to be effective with an organic social media strategy (nurturing prospects without paid promotion), but as paid advertising has been key to the growth of big social networks businesses it’s only natural that these networks would eventually kill their organic reach to increase their ad revenues.
The bottom line is that if you want to reach more people and build brand awareness, get more website traffic, get more leads or get more sales - it’d be a good idea to introduce a proper social media marketing budget to your business plan.
How Much Your Top Competitors Spend On Marketing
It is very challenging to know how much companies spend on marketing, but here’s a quick overview of what top marketers are allocating to their marketing budget according to The CMO Survey:
B2B companies allocated 8-9% of their revenue
B2C companies allocated 5-12% of their revenue
FOR YOUR INFORMATION these numbers represent the entire marketing budget and not just the cost of advertising and media spend. Things like staff or outsourcing work to agencies so you can focus on your core business activities.
How Much Your Competition Spends On Social Media Marketing
On average, here are the percentages of marketing budget companies will allocate for their social media marketing:
B2B Product: 14.7%
B2B Services: 18.3%
B2C Product: 21.8%
B2C Services: 18.7%
But of course, like all things in life… it depends.
Here are some things that would affect how much you spend on your social media marketing budget:
How big your company is. More employees usually mean spending a smaller percentage when compared to those with fewer employees. Bigger companies often already have some brand recognition going on and can get away with spending less.
What industry you are in. Industries like retail and F&B spend more on SMM than industries like IT, for example.
What your business goals are. If you’re trying to build an online presence or ramp up sales, you’re likely to spend more.
What type of social media advertising you go for. Are you going for ads on Facebook or Instagram? Maybe your business will benefit greatly with an influencer strategy lined up.
Who you hire. Do you have a team in-house, or are you outsourcing to a social media agency?
Three Things To Do Before Calculating Your Budget
1– Identify your goals
We said it above, but let’s really drill down on this - you don’t start the journey without a destination in mind!
Here are some ideas for branding goals that you could aim for. Whatever it may be, remember to set goals that are:
Specific
Measurable
Attainable
Relevant
Timely
Goals that are measurable are especially necessary to track the ROI of your overall social media spend.
2– Calculate past spends
Before starting a budget, look into how much was spent on social media in previous months or years. Pull out the social media reports if you have them.
If you don’t, it’s worth it to run a social media audit on your business to understand where you spend the most time on social media. An audit can tell you what worked in the past and what didn’t as well as identify new opportunities to grow.
There are plenty of templates out there for running a social media audit, but if you don’t have the time, you know who to call (no, not Ghostbusters).
3– Strategize time!
Now that you’ve got the vital information at hand, here’s where you start creating your social media strategy.
What efforts will you need to take in order to SMASH those goals you’ve set out? How much will they cost?
Time to break out that calculator, because this is where things get really interesting (if you’re Pythagoras, that is).
We’ve been through a lot together in this article. Now that you have some numbers to use as a benchmark with other businesses, let's have a crack at calculating your social media budget. Luckily it ain’t rocket science.
Here’s how you come up with a budget that’s right for your business in just two steps:
1– Calculate your overall marketing budget
Begin by looking at your annual revenue. If you are a B2B company you could allocate 8-9% of your revenue to marketing or if you are a B2C you could choose to allocate between 5-12%. Remember that these figures are based on a survey of top marketers from The CMO Survey.
Let's say you’re a B2C and you’ve opted for a 7% allocation. With a revenue of $2 million, your total marketing budget would be $140,000.
2– Calculate your social media marketing budget
Now let’s say that you sell products. As mentioned above, B2C businesses that sell products spend 21.8% of their overall marketing budget on social media.
All we need to do is calculate 21.8% from $140,000.
That leaves you with a social media marketing budget of $30,520.
CONGRATS, YOU DID IT - but you can't just set your budget and then be done with it. You also need to think about HOW to spend it to achieve your business goals.
Speaking of goals, if yours are ambitious you’ll probably want to increase your budget because your social media costs will naturally rise.
Want to reach more people because your conversion rates are doing well? Increase your social media ad spend.
Planning a massive campaign? Invest in an experienced agency for social media ads and social media management.
Milk Your Social Media Marketing Budget For All It’s Worth!
If you’re feeling overwhelmed at the sheer amount of math involved, or struggling to quantify the benefits of allocating a certain percentage towards social media marketing…
Here are some things you can do to squeeze the life out of the SMM budget.
Research, research, research. Where does your audience spend the most time online? If you understand their habits, you’ll know exactly where to target them and avoid wasting money by casting your net too wide.
Analyze the best. Look at what content and social media strategies your most successful competitors are doing, and then do the same things (with a bit more flair, of course).
Hire a really awesome agency. Social media marketing takes up a lot of time to do well. The digital world moves at lightning-fast speed - you’d want to consistently monitor progress, and make improvements along the way. Hiring a social media agency with a proven track record gives you the peace of mind that your investment isn’t being wasted.
Conclusion
When planning your business's social media marketing budget, there are a lot of things to consider. If you follow the advice outlined in this article, working out how much to spend on social media would be a breeze (kinda).
Just remember that you will also need to know how to allocate that budget in a way that brings you more money aka a return on your investment.
If you need help and you know your general social media budget, but you have no clue on how to allocate it, reach out to us and we’ll show you how to make it rain on social media.
Here are some very specific step by step branding guides for: Real Estate, Lawyers, Accounting, Doctors, Dentists, Optometrists, Jewellery, Makeup & Beauty, Skincare, Pet Food, Fashion and Construction.
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Feel free to check out our other blog posts here for more valuable information to grow your business.