A Simple Guide to Calculating A Social Media Marketing Budget.

You have worked hard in researching and developing a social media strategy and plan, but how much will it cost? Budgeting is an important part of social strategy and probably needed if you want your strategy to be executed. Few managers or business owners will approve any effort without first knowing the cost. Understanding expense is also an important step to calculating return on investment (ROI).

Free Social Media Budget Template

To help make the budgeting process easier I have created the Social Media Budget Template shown above. I have broken down costs into five expense categories and divided each category into in-house costs (to be performed by employees) and outsource costs (to be hired out). I also suggest calculating the percent of each line item under a category and the percent of each category out of the total budget to understand where you are spending most of your money. As you understand how each category is contributing more or less to overall success you may want to adjust percentages to match contribution level. Each item and category is calculated as a monthly expense and percent of total per these categories:

Content Creation covers in-house or outsourced time to write and design plus any fixed costs such as stock photos or video production. Estimate time to create the content needed for the strategy in a month. You can get an idea of how much you need from a Content Calendar. For in-house employees divide salary into an hourly rate. For outsourced help calculate by their hourly rate or their cost per piece or project.

Social Advertising is paid outsourced costs for reach per social channel such as Facebook, Twitter, LinkedIn, etc. Again, start with a Content Calendar and estimate how many posts will be paid native ads or promoted/boosted posts. Then calculate costs based on current rates per social media network. Because much of social advertising works on a bidding process many managers set per day limits. Thus, this category is estimated based on spending per day, per network multiplied by the number of days you expect to be running social ads in a month.

Social Engagement is the cost for employees or contractors to listen and respond to brand talk per channel. Listening and engagement are important activities in social media. They cannot be planned ahead of time, but you can estimate how much it may cost based on current activity. You could go back to or perform a Social Media Audit to get an idea of the level of customer activity on brand social media channels. Are there hundreds or even thousands of posts everyday day or a few dozen? From there estimate hours per day needed to engage all or a percentage of those customers per channel. Multiply number of hours by employee or outsourced rates.

Software/Tools covers monthly costs for social media monitoring and other automation software services. These software services and tools can help save time and thus money in other categories such as content creation and engagement. There are a lot of free tools, but to get access to advanced features and enterprise level service many organizations have to pay. This budget category is broken down into monitoring, scheduling and analytics as a first step. You may find it useful to add additional categories such as consumer research, automation, or scheduling software. Some tools may have one time costs but most are billed as monthly access fees.

Promotion/Contests are costs for prizes, discounts, etc. Besides buying reach through native ads, many businesses build audience and engagement through special offers, discounts and contests. Whether they are executed through a Facebook app, hashtag or unique offer code promotions, contests, sweepstakes, coupons and discounts have hard costs associated with them. In this category estimate those expenses per campaign. For example, you may have a summer campaign and a holiday campaign or campaigns that happen around specific holidays. If you have a social campaign built around a live event, don’t forget to include those costs as well.

Finally, add totals per month, per line item and category. Also calculate percent of each category and category percent of the total budget. This social media budget template is a good way to calculate how much a social media strategy will cost to execute, but how do you know if the total is too much or too little overall?

One way to put total social media budgets into context is to compare to competitors. In a Social Media Audit you may have uncovered insight that a main competitor is much more active in social media and seeing business success as a result. Your strategy would be to increase your social activity to compete and your budget is an estimate of what it costs to match that level of engagement.

Another way to put your total social media budget into context is to compare to industry standards. In an analysis by Content Factory they estimate that outsourcing professional social media marketing can cost anywhere from $1,000 per month to $20,000 per month. Admittedly this number is very broad. Another approach is to look at typical percentages of overall marketing spending and social spending. In other words, take your existing marketing budget and estimate social media spending based on current standards.

Nick Rojas of The Next Web points out that businesses spend an average of 10% of revenue on marketing. Yet, this could vary by industry. For example, B2C products companies spend an average 16% of revenue on marketing. For social spending a CMO survey indicates businesses now spend an average of 9% to 13% of their marketing budget on social media (expected to increase to 21% by 2019). Thus, a general guideline would be to take your marketing budget as a percent of revenue (such as 10%) and then calculate a percent of the marketing budget (13%) dedicated to social media. If your estimated social media marketing budget from the template above is significantly off from this general number you may want to go back and adjust the plan. Or start with the general estimate then go to the budget template to see what level of social engagement you can afford.

Budgeting in social media can be complicated. But taking a step back and calculating costs based on categories and in relation to marketing spending averages can simplify the process. If you are budgeting against a solid social media plan tied to real business goals with the right metrics in place a return on investment (ROI) will be justified.

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Measuring Print Response 2.0

I picked up a recent issue of Fast Company to find out how advertisers are measuring response and found various forms of digital techniques that make their print interactive. The first ad I found was for Neat desktop scanners. Their fairly traditional print ad has a call to action to visit a customized sub-page on their website neatco.com/FC30Day. This is a different page then their regular corp. website – I assume they’re tracking hits from the print ad. They may have unique pages for ads in different pubs or ads in different media.

What I really liked on the landing page is a short video with sound that automatically plays animation of a paper monster. Then you can click to watch a video product demonstration. Directly below are product photos and prices with bold “BUY NOW” buttons.

The next print ad I found was for a new book on social media marketing called The Dragon Fly Effect. It features a picture of the book and large testimonials. What drew me to their ad was the use of a QR (quick response code). This graphic was in the bottom corner inviting you to watch a video. The ad itself wasn’t very creative but the use of a QR Code is still relatively new and it makes the printed page more interactive.

After scanning it with my smartphone I was immediately taken to a video featuring the author talking about the book and an opt in option requesting my email and name to obtain more information. The top of the page says “Thanks for scanning our ad in Fast Company. Here’s a video just for you.” They have created a unique QR tag and website for each ad to measure response. The video was hosted on Vimeo and featured easy share options including embedding links and the url.

The last ad I found was for Citgo. Gas companies are facing public image challenges and this must be Citgo’s attempt to reach out to their consumers in a friendly way. They emphasize the fact that all Citgo stations are locally owned and contribute to the local economy and how they support local causes and charities. The bottom of the ad invites us to visit a micorsite FuelingGood.com.

The microsite is very people focused and features a map of the U.S. I couldn’t detect ways to track website traffic from the specific ad, but they would get numbers on general hits coming from all communication. They also have a live feed from their Facebook page showing the current number of Likes (2387) with an invitation to sign up to see what your friends like. Clicking to go to the Facebook page would enable them to track how much Facebook traffic is coming from their microsite. The site also has links to their Twitter account and a YouTube channel where they could track the same traffic activity.

The interactive map shows charities/non-profits in your state and area that you can vote to support. Last year Citgo rewarded seven charities with a year’s supply of gasoline. The creative skeptic in me says, “That’s been done.” But the mature marketer and decent person in me says, “Keep it coming!” What do you think? Should more companies follow the Pepsi Refresh model of getting people to submit ideas and vote on causes to receive corporate support?