Some industries need a lot of marketing, some need none. Your marketing budget should be reliant on how large your business is, your sector, how long you’ve been around, your total profit, and how much you need it. If you’ve been around a while, a lot of your overhead costs might already be sunk, but if you’re a new business, you still might need to develop a website, have a logo design, and maybe even generate a business name.
Digital marketing includes social media, pay per click search engine marketing, online ads, social media marketing, and email newsletters. Depending on your industry and business, your needs will naturally vary a lot here: a local, walk-in type store might benefit heavily from promotion on local search, whereas a specialty goods store devoted to a niche interest might find a newsletter more productive.
How much you spend on this also depends heavily on your specific industry. As a benchmark, most businesses allocate about 25% of their digital marketing to social media marketing.
Social media marketing is more important than ever. Almost every business can benefit from it in some way, and the possibilities for growth are obvious. Especially at its current low price point, the potential gains far outweigh the risks. It’s not a magic potion to triple your sales, but it helps you get your foot in the door, and will only become more important as time goes on.
Here, we’ll tell you the best way you can determine just how much you should spend on marketing in general, as well as how much of that you should budget for social media specifically.
Set Your Goals.
You need to think about your goals for the campaign.Think about what you want to achieve from your marketing campaign as a whole, and also think about what part social media should be playing in this. If you’re only just beginning to experiment with social media marketing, you may want it to form a smaller part of your campaign, measure return on investment and then scale the campaign up.
Look at Past Results
Past Results If you have run social media marketing campaigns previously, using data from your past campaigns is essential for informing the direction of your current one.
Both Facebook and Twitter offer their own analytics dashboards that provide detailed information on your previous social media advertising campaigns. They allow you to assess how much you spent per click and track customers right through to conversion.
Consider Your Target Market
Depending on your target market, they may be more or less likely to engage with digital campaigns. Facebook and Twitter allow you to target customers very specifically using everything from their age and gender to their interests.
What Platforms Are You Using
Choose Platforms once you know which platforms best suit your target market; you need to think about dividing your budget between social media platforms. Think about how much you are willing to allocate to each platform and set your budget accordingly. You may want to invest less in new platforms and more in established platforms like Facebook and Twitter. Some social media platforms may need more investment than others to provide a return, so run test campaigns on a smaller scale to assess the performance of your advertising and help you decide on a budget for each platform.
What Are Your Competitors Doing?
See how active their advertising is on social media and use this to help you identify a niche. If it’s apparent that your competitors are investing a lot in social media advertising, you may want to increase your own budget in order to maintain your presence.
Monitor & Adjust
While you may have an overall social media advertising budget in mind at this point, it is important to continue to monitor the results of your advertising efforts and adjust the allocation of your budget accordingly. Facebook gives you analysis of your social media advertising campaigns as they run so you can monitor them and react to how they perform.
There is no mathematical formula for setting the right social media advertising budget. You need to consider all of the variables from platform to past performance and use everything at your disposal to make a judgment about how to set your budget. The more you test and run campaigns, the better idea you can build of how much budget will be required.