What are some benchmarks for social media marketing budgets in your industry?

1 Why budget for social media marketing?

Social media marketing is not just about posting and liking. It's about building relationships, creating awareness, generating leads, and driving conversions. Social media marketing can help you reach your target audience, communicate your value proposition, and differentiate your brand from the rest. But to do that, you need to invest time, money, and resources into planning, creating, and executing your social media campaigns. That's why you need a budget for social media marketing, to allocate your resources wisely and align them with your goals.

2 How much to spend on social media marketing?

There is no one-size-fits-all answer to how much you should spend on social media marketing. It depends on various factors, such as your industry, your business size, your objectives, your audience, your channels, and your competitors. However, some general guidelines can help you estimate your budget range. According to a survey by The CMO Survey, the average percentage of marketing budget spent on social media in 2020 was 12.3%, up from 9.4% in 2019. This percentage is expected to increase to 18.4% in the next five years. However, this percentage varies by industry, with consumer services (20.6%), education (19.2%), and consumer packaged goods (16.9%) spending the most, and mining and construction (4.1%), energy (5.1%), and manufacturing (6.8%) spending the least.

3 How to allocate your social media marketing budget?

When deciding how to allocate your budget for social media marketing, you need to consider various categories. Content creation involves producing and editing your content, such as images, videos, podcasts, etc., which may require hiring freelancers, agencies, or in-house staff. Content distribution involves promoting and amplifying your content, which may require paying for ad space or fees. Content management involves managing and monitoring your presence, which may involve subscriptions or licenses. Content engagement involves engaging and interacting with your audience, which may require hiring or training staff. The budget allocation depends on your goals: if you want to increase brand awareness, you might spend more on content distribution and engagement, while if you want to generate leads, you might invest more in content creation and management.

4 How to measure your social media marketing ROI?

To measure the success of your social media marketing budget, you need to calculate your return on investment (ROI). ROI is the ratio of your profits to your costs, expressed as a percentage. To do this, you should first define your goals and metrics - such as reach, impressions, followers, engagement, clicks, leads, conversions, sales, etc. - and track and attribute your costs and revenues to your social media activities. This can be done using tools such as Google Analytics, Facebook Pixel, and UTM codes. Additionally, you need to account for both direct and indirect costs and revenues like labor and overhead. Finally, calculate and compare your ROI with benchmarks, competitors, and industry standards using the formula: ROI = (revenue - cost) / cost x 100%. This will help you determine how well you are performing and where you can improve.

5 How to optimize your social media marketing budget?

To get the most out of your social media marketing budget, you must monitor, analyze, and adjust your spending and performance. Test and experiment with different types of content, formats, channels, audiences, messages, offers, etc. to see what works best for your goals. Use tools such as A/B testing, split testing, multivariate testing to compare and evaluate results. Gather insights from your audience using surveys, polls, reviews, ratings, comments etc. Use the learnings and insights to scale and invest in the most effective and efficient activities while cutting or reducing budget for those that underperform or waste resources. Following these tips will create a realistic and effective budget for social media marketing that can help you reach your desired results.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?