No matter how big or small a company is, you must make an effective budget to bring success to your business on social media platforms. In marketing, it is essential to ensure that your investments are cost-effective. Hence, you have to answer questions like: Is your budgeting for social media advertising enough? Are your expenses on par with your ROI? Where are you investing your money?
Your company’s wallet capacity is not a factor here. If you do not curate a perfect budgeting scheme for your business, you are sure to waste your resources. That is to say, to become the next big thing in the social realm, you should see a return on your social marketing investment.
So, if you are new to the marketing world, let me walk you through the basics of social media budgeting.
In layman’s words, a social media budget is a written document consisting of all essential details regarding your financial plans. It includes information like: How much will you spend on a particular campaign or advertising? How much do you plan to spend over a specific period of time? What are the costs associated with the recruitment and retention of social marketers? What are the costs associated with content creation and reporting tools?
In short, it includes all the data in a spreadsheet concerning your financial commitments to social media. There is no rule for how big your social media budget should be. Since every business has its own capacity and capability, the size of the budget will vary from company to company. The main factors that may affect a business’s budget are the company’s size, industry, team size, and business goals.
According to the 2023 survey, most social media marketers are currently spending 17% of their budget on social media. However, there are hopes for the number to rise in the near future.
Types of budget
Social media budgets can be of three types:
- Fixed budget. This budget works well for companies with limited resources. A fixed budget means you decide on a set amount of money to spend on your social media platforms. It is calculated either annually or quarterly.
- Flexible budget. This type of budget is best for organisations with no restrictions regarding monetary spending. A flexible budget is dynamic, and companies adapt and adjust the budget according to different needs. It is mostly based on the performance of a company’s campaigns. Nevertheless, a flexible budget does not necessarily mean an unlimited one.
- Zero budget. As the name suggests, a zero budget is where you are not allocating any money to your social media marketing. With a zero budget, you start marketing with zero pennies in your bank. That means you have to request approval for each campaign.
Now that you get the gist of social media budgeting, here are some steps to get started:
Set your goals
Before anything, it is necessary to stay clear on your social media goals. Are you trying to increase views on Twitch? Gain more traction on Instagram? Increase subscribers on YouTube? Knowing what you want is the first step to curating your social media budget. The takeaway? Always set SMART goals. In other words, your goals need to be specific, measurable, achievable, relevant, and time-sensitive.
Analyse your past spending
If you want to build a budget that is cost-effective, it is necessary to look back at your previous spending and underline the drawbacks. You can go for a social media audit to help yourself figure out your current affairs on social media. Make lists of all the important events your company has been spending on from your previous periods. Next, compile all your specific social marketing expenses and events, placing them correspondingly to get started with a new budget.
Define your budget
Now that you know your new goals and previous expenses, it is time to define your budget for the new session. Decide on the amount of money you are willing to invest. Focus on the type of budget you want, whether it will be fixed or flexible. The next step is to focus on the platforms you will be spending money on. For instance, if you need more engagement on Twitch streams, you might want to allocate more money to Twitch content creation and software. Above all, be sure of how much your company can afford and where the valuable money should be invested.
Categorise your budget
What should your budget include? It is vital to know where you are spending your money. While you have already defined your budget type and platforms, it is time to categorise the different elements of your budget.
For instance, a good budget includes money for:
- Content creation. Photography and video production, graphic design, copywriting, etc.
- Software tools. Design and editing tools, social media monitoring tools, video tools, auditing tools, etc.
- Paid campaigns. Facebook ads, Instagram ads, Twitter ads, etc.
- Influencer marketing. Brand collaborations, influencer collaborations, etc.
- Training and employment. Managers, analysts, creators, etc.
Use budget templates
Finally, when you are done categorising your budget elements, use social media budget templates to keep a clean track of your spending. You can find many free social media budget templates. It will do the math for you and make your work easier.
Social media budgeting is a core factor that enables a business to thrive in the social realm. Without proper budgeting, your company will get sidetracked in this intensely competitive market.
Ellen Diamond, a psychology graduate from the University of Hertfordshire, has a keen interest in the fields of mental health, wellness, and lifestyle.