What should be your social media marketing budget? This is a common question. In the not-too-distant past, marketers used three per cent of turnover as the marketing budget ‘rule of thumb’. But things are not that simple anymore.
Now, a good place to start is by looking at the required investment in time, not cash. Newbies are often surprised by how much time social media can eat. Other’s already know, and this terrifies them.
But with a social media strategy that links activities to expected outcomes, you can avoid wasteful, time-consuming and low-impact activities.
Start by pinning down exactly what you want social media marketing to do for your organization. Think about actual business outcomes such as increased revenues, volume of leads or numbers of new partnerships, for example. And be realistic, specific and timebound in defining goals:
- “a 10 per cent increase in monthly sales” by next quarter,
- “25 per cent more leads month on month”, or
- “2 new partnerships in Q1”
Examine your social media resources
The next step is understanding what resources are required to meet these objectives. If you are using your own in-house team, ask yourself:
- Do my team members have the knowledge, skills, talent and capacity to devote to social media marketing?
- Do they have all the social media software and tools they need to do the job?
If the answer to both these questions is yes, excellent! Use each member’s hourly cost of employment to estimate your budget and provide them with guidance on how much time they should dedicate to social media.
Don’t forget to factor in the opportunity costs of having team members working on implementing a social media strategy. One UK pub chain had to bow out of social media altogether because pub managers were spending too much time online and too little on…well, managing the pub.
Also, you need to factor in supplementary training, software license fees and other operational costs associated with marketing campaigns.
If you didn’t answer yes to the two questions above, then you need to think about hiring a dedicated social media professional or working with an outside agency or consultant. Again, you can estimate the size of this investment in weekly hours of effort. The bonus with using an outside resource is that agencies and consultants usually have all the tools they need to get the job done.
Timing is a crucial part of budgeting. Measure progress against milestones to keep on track. And, set realistic milestones for your organization. For example, if your typical sales cycle is three months, you might have a one-month milestone for sales leads generated and a two-month milestone of sales proposals generated.
As with most things in life, when you are starting a social media strategy, start small. If you’re using your in-house team, make the commitment to one story per week on one channel. Run one ad campaign per month. Follow and engage with one hashtag. Measure progress and build on wins.
Even if you’re using an agency or consultant, there is no need to go out with a full-blown, “all the bells and whistles” campaign based on high up-front fees. Instead, be strategic. Look at what you want to achieve and by when. Then allocate the required budget to cover fees and operational costs.
In both cases, it’s important to start small to see what you learn. Test content, messaging and approaches, and then adjust along the way.
Here’s a sample budgeting matrix to help guide your thinking: