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.

For more insights into the big picture in social media strategy consider Social Media BookLogoStrategy: Marketing and Advertising in the Consumer Revolution. Free Preview of the Detailed Contents, Forward, Introduction and First Chapter: bit.ly/QuesenberryFreeSample EBook: bit.ly/QuesenberryEBook Instructor Exam Copy: bit.ly/Quesenberry

See The Forest for the Social Media Trees

“See the forest for the trees” is a saying that means getting caught up in the details and failing to understand the bigger picture. With all the new social media channels vying for our attention these days it is easy to get bogged down by all the particulars and immediate demands. Yet being able to discern the overall pattern or vision from the minutia of specific social media options and tactics is a valuable skill. Strategy – taking a broad, long-range approach and thinking systemically – is a very valuable skill. A 30,000 foot view, not a 3 foot perspective is what is needed to plan and marshal organizational resources to meet and exceed business goals.

How valuable is strategic thinking? A global study of over 60,000 managers asked them to access over 20 leadership practices (such as innovation, persuasion, communication, results orientation) and 20 measures of effectiveness (such as future potential, credibility, business aptitude, people skills). “Having a strategic approach” was seen as 10 times more important to effectiveness than other leadership behaviors and nearly 50 times more important than tactical behaviors. Another study asked 10,000 senior executives to select the leadership behaviors most critical to organizations success. “Strategic” was chosen 97% of the time.

Most people may agree that strategy is very important yet thinking strategically is not easy. Strategic thinking is especially hard when immediate demands are often rewarded over long-term vision and planning. Yet seeing the forest for the trees is a leadership quality necessity for social media success. When faced with 800+ social media sites, apps and services – a lot of trees – being able to focus on a long-term approach is the only way to see the path to reach your ultimate business or organizational goals.

Many marketers, advertisers, public relation professionals and entrepreneurs are jumping into the social media race, but they must be in it for the long haul to see real, lasting results. They must take the time to take a step back and see the big picture through a strategic social media plan. Trying to apply old marketing control strategies in this new consumer controlled social media environment does not work. Social media marketing is a different game with different rules.

Sure, there are plenty of tips. A Google search of “social media marketing tips” returns 135 million results. But very few tell you to do the same things and what worked for one business will not exactly work for others. For marketers and advertisers to succeed at social media integration, they must first start in a place rooted in their distinct situation and drive a strategy of choosing social platforms and creating content based on their business objectives, marketing strategy and target audience. This can be accomplished by following a 5-step process:

  1. Define current business and social media situation
  2. Create a big idea and plan integration
  3. Selection social media channels
  4. Integrate non-marketing social media activity
  5. Finalize social media plan and sell

That is what I have detailed in my new book Social Media Strategy: Marketing and Advertising in the Consumer Revolution. It is a roll up your sleeves roadmap to sound social media strategy that draws from the best in academic research and professional business practice. An approachable text to teach my social media marketing students, it lays out a method that cuts through the hype and sets a strategic mindset to take advantage of the exciting opportunities of social media. This text provides the context, process and tools needed to create a comprehensive and unique social media marketing solution.

Are you having trouble seeing past the trees of social media channels and tactics? Perhaps you need to take a step back along with my students and invest some time into getting above the forest and plan a path for long-term strategic success. Do you see the value in strategic thinking? How can you take the time to make it happen?

Social Media Strategy QuesenberryFor more insights into the big picture in social media strategy consider my book Social Media Strategy: Marketing and Advertising in the Consumer Revolution. Get a free preview of Table of Contents, Forward and Chapter One in the Kindle version via this link.