Learn how to Create a Social Media Finances for Each Measurement of Enterprise
If you’re using social media to market your business, you need a social media budget. Here’s how to put one together — and how to ask your boss for the investment you need.
Bonus: Download a free guide and checklist to help you convince your boss to invest more in social media. Includes experts tips for proving ROI.
A social media budget is a document that specifies how much you plan to spend on social media over a specific time, e.g. a month, a quarter, or a year.
Usually presented as a simple spreadsheet, it creates a clear understanding of the costs of your social media efforts and is a valuable tool for measuring return on investment.
There’s no set rule for how much to spend on digital marketing in general or social media in particular. However, there are some general guidelines and benchmarks backed by surveys and research.
Overall marketing budget benchmarks
According to the Business Development Bank of Canada, the overall marketing budget varies depending on whether you’re marketing to consumers or to other businesses:
- B2B companies should allocate 2-5% of revenue to marketing.
- B2C companies should allocate 5-10% of their revenue to marketing.
Here’s the average amount each size of business spends on marketing per year, based on the same research:
- Small businesses (<20 employees): $30,000
- Mid-sized businesses (20-49 employees): $60,000
- Large businesses (50 employees or more): more than $100,000
Social media budget benchmarks
According to the February 2021 CMO Survey, the percentage of marketing budget businesses will spend on social media in the next 12 months breaks down as follows:
- B2B Product: 14.7%
- B2B Services: 18.3%
- B2C Product: 21.8%
- B2C Services: 18.7%
The same research found the amount of marketing budget allocated to social media this year also varies by sector:
- Consumer services: 28.5%
- Communications and media: 25.6%
- Banking and finance: 11.7%
In five years, the overall portion of social media in the marketing budget is estimated to be 24.5%.
Source: CMO Survey
Use these averages as benchmarks. Then, tailor them around your goals and resources (more on that below) when planning how to budget a social media campaign for your business.
Remember that your social media budget is not just the amount you spend on paid ads. As we’ll describe in the next section, even if you use only free social tools, you need a social media budget to cover factors like staff time and training.
On social media, content is and always will be king. Many social marketers spend more than half of their social media campaign budget on content creation. Here are some of the line items you may need to include in this section:
Costs will vary significantly depending on how custom you want your social media content to be.
For example, you can get started with photos and graphics from a free stock photography site, in which case you can budget $0 for photos. However, if you want a more custom approach, or you want to show off your specific products, you’ll need to hire a photographer.
Don’t underestimate the importance of good writing, especially for the short character counts of social media posts and ads: Every word counts. Copywriters are generally paid by the word or by the hour.
A good guide to rates for copywriters, editors, and translators can be found on the Editorial Freelancers Association website. The median rates based on an April 2020 survey are:
- Copywriting: $61–70/hr
- Copy editing: $46–50/hr
- Translation: $46–50/hr
Software and tools
Your social media budget will likely include some or all of the following tools and platforms. You can find more information about the costs associated with each category of tools in our curated lists:
Again, costs will vary significantly depending on the size of your business and your team. Some software tools (including Hootsuite) offer free plans with basic features.
Paid social media campaigns
Your social media strategy might start off using only free tools to share organic content and engage with fans across your social media accounts.
But eventually, you’ll probably want to add social advertising to the mix. Here are some of the options you might consider including in your social media advertising budget:
- Facebook ads. Facebook offers a variety of formats, campaigns, and targeting capabilities.
- Facebook Messenger ads. Placed in the Messenger app home screen, these ads can be good for starting conversations.
- Instagram ads. These can reach target audiences in feeds, Stories, Explore, IGTV, or Reels.
- LinkedIn ads. Reach a professional audience with sponsored InMail, text ads, and more.
- Pinterest ads. Pinterest’s promoted Pins will help you reach its DIY network of planning Pinners.
- Twitter ads. Drive website clicks, Tweet engagements, and more.
- Snapchat ads. Branded filters, story, and collection ads might be right for your next social campaign.
- TikTok ads. The popular-with-teens video app offers full-screen ad placements, hashtag challenges, and more.
So what do all of these paid advertising options cost? The answer is: It depends. And it will likely take a little testing to discover exactly the right ad spend to maximize your ROI.
To get you started, here are the minimum spend amounts required to run a campaign on each of the major social networks. The minimum spend won’t get you access to all advertising options, or a lot of exposure, but they give you a sense of how little it can take to get started.
- Facebook: $1/day
- Instagram: $1/day
- LinkedIn: $10/day
- Pinterest: $0.10/click
- Twitter: No minimum
- YouTube: $10/day*
- Snapchat: $5/day
- TikTok: $20/day
*YouTube says this is what “most businesses” start with as a minimum.
To calculate how much you should spend on your next Facebook ad campaign based on your revenue goals, try the Facebook Ads Budget Calculator from AdEspresso.
Working with influencers (or content creators) is a good way to expand the reach of your social content. Consider both how much you’ll spend to boost Influencer posts and how much you’ll pay the content creators themselves.
Influencer campaign costs vary, but the basic formula for calculating influencer rates is: $100 x 10,000 followers + extras. Some nano- or micro-influencers might be willing to use an affiliate commission structure.
There are lots of free social media training resources out there, but it’s always worthwhile to invest in training for your team.
Social media changes fast, and your team’s roles can change and grow equally quickly. If your team members are ready and willing to invest their time in developing new skills, it’s a good idea to enable that through your social media budget. You’ll be the beneficiary of everything they learn.
Depending on your team’s skill levels and campaign needs, these are a few training options you should consider including in your social media budget:
- LinkedIn Learning. LinkedIn’s business courses extend well beyond the use of the LinkedIn platform. They feature instruction from and interviews with subject matter experts including Sheryl Sandberg, Adam Grant, and Oprah Winfrey.
- Hootsuite Academy. From single courses to certificate programs, Hootsuite Academy offers a catalog of courses taught by industry pros and tailored for businesses.
- Hootsuite Services. Hootsuite Business and Enterprise customers get access to guidance and coaching, with custom training available as a Premier Service.
- Industry-expert training. Social media managers are senior strategists, so training and education opportunities should extend beyond the specifics of social media. Hootsuite copywriter Konstantin Prodanovic recommends Hoala’s Professional Master Course in Brand Strategy and Mark Ritson’s Mini MBA in Brand Strategy.
Some #MondayMotivation to help you start your week right. pic.twitter.com/oim8et0Hx6
— LinkedIn Learning (@LI_learning) June 28, 2021
Social strategy and management
While there are tools that make social management easier, and outsourcing is always an option, it’s good practice to have at least one person in-house supervising social.
Even if you outsource your social media efforts, you’ll need someone in-house to coordinate with your partners and represent your brand in discussions about strategy and creatives.
Keep in mind this is not an entry-level position. The day-to-day tasks of creating, scheduling, and publishing social content and ads are just the most visible parts of the social team’s work.
Your social team also engages with social fans, provides social customer service, and manages your social community. They use social listening to learn about your audience and alert you to potential threats and opportunities. They build a social strategy and — yes — manage social budgets of their own.
When building this role into your budget, consider the average U.S. salaries for social media managers, as tracked by Glassdoor:
- Lead social media manager: $54K/yr
- Senior social media manager: $81K/yr
Looking to hire or become a social media manager? Here are the essential skills every candidate should have.
1. Understand your goals
We’ve said it before and we’ll say it again. Every good marketing strategy starts with clear and well-thought-out goals. After all, it’s impossible to determine how much budget to assign to social media if you don’t know what you want to achieve.
We’ve got a whole blog post on effective goal-setting to help with this part of creating your budget, but here’s the gist. Especially when using them to create a budget, your goals should be SMART:
Specific goals tied to measurable results allow you to measure the value of social media, so you can determine an appropriate amount to spend for each desired result.
Measurable goals also allow you to track and report on your success, so you can adjust your budget over time to better support the strategies that work for your business.
2. Analyze your spend from previous months (or years, or quarters)
Before you create a budget, it’s important to understand the current state of affairs. How much are you spending on social media now? If you’ve never made a budget, you may not be completely sure.
If you’re already producing social media reports, you’ll have a good source of information to draw from. If not, a social media audit is a good first step to help you understand where you’re currently spending your time on social media. (And remember: time is money.)
Next compile a list of all your specific social marketing expenses from previous periods, using the categories outlined above, so you know where you’re starting from.
3. Create (or update) your social media strategy
You’ve now got some good starting information to help build out your social media strategy. This will help you work out how you’re going to go about achieving the goals you set in step 1.
Then, by analyzing the amounts you’ve spent in the past and the efforts you want to make to achieve those goals, you can determine a reasonable amount to spend on each part of your strategy moving forward.
A summary of your social strategy is a good document to attach as a cover letter in your social media budget proposal, since it shows that the amounts you’re asking for are based on real data and solid planning.
4. Create a budget proposal for your boss
Now it’s time to get technical. The good news is, we’ve taken care of setting up a social media budget proposal template for you, so all you have to do is enter the information specific to your business and your plans.
If you’d prefer to create your own social media budget calculator, include the following information in an Excel Spreadsheet or Google Sheet:
- Category: Content creation, software, etc. Create a section for each of the relevant items listed above, then break it down into specific line items for each individual expense.
- In-house vs. outsourced expense: In-house expenses are based on the amount of staff time dedicated to social media. Outsourced expenses are anything you pay for outside your company, from consulting to ad fees. Some categories may include both in-house and outsourced expenses, so break these out into separate columns.
- Spend per item: For each line item and category, add up the internal and outsourced costs to indicate a total spend. List this as both a total dollar figure and a percentage of your total budget so you (and your boss) can clearly understand how you’re allocating resources.
- Ongoing or one-time expense: If you’re including any one-time expenses in your budget that will have value over the long term, it’s a good idea to flag these so your boss understands it’s a one-time ask. For example, maybe you need to buy some equipment to set up a video studio. Use separate columns to tally your one-off and ongoing costs.
- Total ask: Add it all up to show the total amount requested.
Make the most of your social media budget and easily manage all your social media profiles using Hootsuite. From a single dashboard, you can schedule and publish posts, engage your followers, monitor relevant conversations, measure results, manage your ads, and much more.
Easily manage all your social media in one place and save time with Hootsuite.