social media spending Archives - Post Control Marketing

Social media marketing spending is up and social media strategy is maturing. In a previous post, I explained how a Social Media Metrics Template can help track increased spending to company performance. The CMO Survey reports average spending on social media marketing is 16% of marketing budgets. Yet, there’s no guarantee you will get that amount of money for social media, and if you do how do you know what to spend it on?

A social media budget begins with breaking expenses into categories.
Photo by Kelly Sikkema on Unsplash

Few managers or clients will approve a social media strategy without knowing the cost and how that money will be spent. To estimate the cost of a social media plan I created a Social Media Marketing Budget Template in the first edition of my Social Media Strategy book that is still relevant today. It breaks down costs into five expense categories: content creation, social advertising, social engagement, software/tools, and promotions/contests.

Each category is also divided by in-house costs (to be performed by employees) and outsourced costs (to be hired out). The template also calculates the percentage of each item under categories and the percentage of each category out of the total budget to understand where the most money is being spent.

After running the plan and getting some KPI metric results, you’ll have an idea of how each category is contributing to overall success. Based on evaluation results consider adjusting budget category percentages to match contribution level.

(Click on the template image to download a PDF)

Content Creation Is Time And Assets Used To Write And Design Posts.

Estimate the time to create content in a month. You can get an idea of how much content is needed from a content calendar. For in-house employees, divide salary into an hourly rate. For outsourced help, use their hourly rate or their cost per piece or project. Include any fixed costs such as stock photos or video production.

Social Advertising Is Paid Outsourced Costs For Reach Per Platform.

From the content calendar estimate paid posts. Calculate costs based on current rates per social platform. Most brands buy social ads with set per-day limits. Estimate spending per day, per platform, multiplied by the number of days you expect to run social ads in a month. Then include influencer marketing spending which is often negotiated with a per-post cost. Add the number of posts multiplied by each creator’s per-post rate to estimate monthly expenses.

Social Engagement Is Cost To Listen And Respond To Brand Talk Per Platform.

Live engagement can’t be planned, but you can estimate the cost based on current activity. Get an idea of the level of brand engagement needed from a Social Media Audit. Does the brand typically get hundreds or just a few dozen brand posts a day? From that estimate the hours per day needed to engage all or a percentage of those consumer brand posts. Multiply the number of hours by employee or outsourced rates.

Software/Tools Cover Costs For Social Monitoring, Scheduling, and Analytics.

This category is broken into monitoring, scheduling, and analytics. More specialized software may require additional categories such as consumer research, automation, or AI. You may need to subtract categories if your software solution covers multiple functions. Or a software solution may provide services outside social media such as Salesforce CRM. In that case, divide a percentage of the cost for the integrated system by social media–only services.

Promotions/Contests Are Costs For Prizes, Discounts, Coupons, Or Offer Codes.

Besides buying reach through social ads, many businesses build audience and engagement through special offers and contests. Estimate the costs for offering these sales promotions per campaign. You may have seasonal and holiday campaigns, new customer and event promotions and contests. Included with a monthly expense estimate.

How Do You Know If You’re Spending too Much or too Little?

Add totals per month, per line item, and per category. Then calculate a percentage for each category and category percentages for the total budget. Over time seek to balance spending in each category based on results. Investing in software tools may free up time to be spent on engagement to increase performance. Investing in automation or AI tools may free up employee/outsource costs to invest in social ads.

You can also seek insights from other social media marketers. Join social media professional groups and ask what they tend to spend on various categories. For example, one survey found that top social media costs were internal employee compensation (37%), followed by social media advertising (18%), external staff compensation (10%), and content costs (7%).

Another way to put total social media budgets into context is to compare to competitors. In a social media audit, you may notice a more successful competitor engages fans more and uses more social ads or influencers. You could recommend a similar social media strategy and your budget becomes an estimate of costs to match the competitor’s level and type of activity.

Social budgets can also be compared to industry standards by looking at typical percentages of social media spending. As we saw at the beginning of this post the latest CMO Survey reports average spending on social media marketing is 16% of marketing budgets. But this average varies based on the economic sector from B2B products (8%) to B2C products (22%). To check the latest averages, visit cmosurvey.org/results.

Sometimes a boss or client will set a specific budget based on what they can afford or what they have left over. Then your social media plan and objectives may need to be adjusted to fit available resources.

Budgeting in social media can be complicated. However, taking a step back and calculating costs based on categories and in relation to marketing spending averages can simplify the process. If you’re budgeting against a solid social media plan tied to business, marketing, and/or communications objectives a budget with the right metrics in place can help justify ROI.

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According a 2023 CMO Survey average spending on social media marketing for U.S. companies is 16% of marketing budgets and it is expected to rise to nearly 25% in 5 years. For B2B products spending is 23% today. Yet the same survey reveals marketers are only 53% confident in social media contributing to company performance. And a Sprout Social survey finds that social media teams’ second biggest challenge is proving ROI.

You need more than Likes today to justify social media marketing spending.
Photo by Daria Nepriakhina 🇺🇦 on Unsplash

The days of social media being a part of an experimental budget are gone. With that significant spending comes expectations to meet marketing objectives. Social media budgets are not guaranteed and in some years average spending has gone down. How can you reassure management and clients that social media is a good return on investment? A social media evaluation plan.

An evaluation plan measures success based on social media metrics. Metrics are standards of measurement by which efficiency, performance, or progress can be assessed. They’re important to gain approval and funding to implement social media plans and prove ROI to continue them.

Marketers love digital media because so many things can be measured. Yet the sheer amount of data and options of what can be collected from where may be overwhelming.

The key to understanding social media metrics is knowing how to collect data, track metrics, and identify key performance indicators (KPIs) to link social media actions to marketing objectives for measurement and optimization. A KPI is a key indicator that is used as a type of performance measurement. It’s a metric identified from all the other metrics as being important

Measure Metrics that Support Overall Goals and Objectives

The right key metrics will come from your social media goals that support your main marketing and/or communications objectives. For every objective, you need related social media metrics per platform that determine if your social media plan is working and helping. Here are some example metrics per objective category.

Awareness: Impressions, Reach
Engagement: Likes, Comments, Shares, Clicks
Share of Voice: Volume, Sentiment
Customer Care: Response Rate, Response Time
Return on Investment: Referrals, Conversions

Top social media platforms each offer their own analytics such as Meta (Facebook/Instagram) Insights, LinkedIn, Twitter/X, Pinterest, YouTube, and TikTok analytics. Metrics for social media platforms can also be accessed through third-party software tools and metrics can be collected in unified dashboards and reports.

Other metrics may be used across social platforms such as engagement rate and cost per engagement. Engagement rate measures the amount of interaction social content earns relative to other audience figures such as reach. Engagement rate can be calculated against reach, posts, or impressions. Cost per engagement is the total amount spent divided by total engagements.

The metrics that are right for your plan depend on your unique objectives and what management or your client considers to be valuable. Once you understand the platform metrics, link the specific metrics for each platform as KPIs to specific marketing and communications objectives.

Create a Social Media Metrics Table for Your Evaluation Plan

A social media metrics template helps organize and show how social media data and plan objectives connect to measure the success of social media efforts. Place marketing and/or communication objectives across the top – one column per objective. In the left column, place each social media platform – one row per platform.

(Click on template image to download a PDF)

Specify your marketing or communications objectives following SMART guidelines ensuring they’re Specific, Measurable, Achievable, Relevant, and Timely. Examples of situations that would lead to different objectives and metrics are shown below. A single organization or business may have all these objectives and more if they’re quantified and assigned metric KPIs for each social platform.

A startup or business with a new product or service may be focused on building awareness among a certain target audience (impressions, reach).
A company or organization may have issues with brand reputation and want to increase share of voice to change perception (volume, sentiment).
A business needs to drive sales leads or online purchases (referrals, conversion).
A brand needs to focus on retention of customers for continued sales or recruiting new customers via word-of-mouth (likes, comments, shares, clicks).

These KPI metrics can be used to measure performance at the beginning of a social media plan, at the end, every quarter, month, weekly, or even daily. Overall strategies and plans should be set and reevaluated yearly, but individual campaigns, promotions, and tactics should be measured and optimized continuously throughout the year.

Managers may also require quarterly, monthly, or weekly reports. Many software tools make it easy to set up dashboards of KPI metrics and schedule analytics reports to be generated and automatically sent to specific team members regularly. You should track the effectiveness of different strategies and tactics in dashboards as well.

What if those metrics are not performing well? You might not be using the best social media platforms for your strategy. Find out with this Social Media Platform Guide.

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