How to Build a Social Media Marketing Budget [With Template]

Consumers today are always on their phones, scrolling through social media platforms for hours. Businesses should take advantage of social media marketing to raise brand awareness, streamline lead generation, and build lasting relationships.

With so many pros and arguably no cons, investing in social media strategy and marketing should be a high-level priority for business owners.

While it’s easy to say that you should immediately invest now, the big question is how much you should spend. No business owner wants to end up with more marketing spend than return on investment (ROI).

Here’s everything you need to know to create an effective social media marketing budget and avoid overspending.

Make sure you’re connected with the best professionals to execute your unique marketing strategies. Find the leading SMM companies on Clutch.

What Goes Into a Social Media Marketing Budget?

Social media marketing is just like any other type of marketing effort, it requires extensive research, planning, and strategy to achieve optimal results. It’s not just about posting well-designed graphics, it’s about consistently producing content, conducting continuous testing, and actively monitoring your social media accounts.

With all that information in mind, here’s what you can expect when working with a social media marketing agency:

• Market research is the tedious process of gathering, understanding, and interpreting data such as target audience, market, and competitors. It’s essential to proceed to the next steps as it gives them an idea of what they need to do to deliver, laying the necessary groundwork.
• Content planning and strategy take the knowledge gained from market research to plot and think of content that customers will appreciate and engage with. An experienced SMM agency knows what content marketing tactics work best with certain types of brands and audiences. They have experience in creating content calendars that will act as a roadmap to follow each month.
• Graphic design comes after the content calendar is finished. Typically, SMM teams have dedicated graphic designers or art directors who conceptualize and execute all kinds of designs, including infographics and headers.
• Copywriting is also integral to attracting customers and educating them about your products or services. A great SMM agency has talented copywriters who know how to come up with all sorts of copies and CTAs that will go brilliantly along with the graphics prepared by the designers.
• Account management, or social media management, is the ongoing process of handling, nurturing, and maintaining a brand’s social media accounts.
• Posting and scheduling ensure your customers see your content when they’re active. Of course, they’re not checking social media platforms every hour. Scheduling posts not only saves you time, it also optimizes your chances of engaging with your audience. Working with an experienced SMM team ensures you have access to professionals who know the best social media tools that will make posting and scheduling more time efficient.
• Testing is unending when it comes to social media marketing, as it’s crucial to understanding what works and what doesn’t. A/B testing is one of the basic tests an SMM team can do for your accounts, and it allows them to adjust their services and optimize their strategies to meet key metrics.

Not all social media marketing strategies are the same. For instance, some brands may require extensive strategies, more posts, or intricate posts — those will be more expensive than projects that require simpler solutions. These elements are important variables to keep in mind since they directly affect the overall cost of your project.

Additional reading: “Social Media Marketing Pricing Guide 2023”

How to Budget for Social Media Marketing?

1. Assess Your Current Social Media Marketing Efforts
2. Determine Project Goals
3. Get Quotes from SMM Agencies
4. Leave Room for Other Expenses
5. Allot Resources for Seasonal or Special Campaigns

1. Assess Your Current Social Media Marketing Efforts

To improve your social media marketing, you must take a moment to step back and assess your current efforts. Not every company is starting its social media marketing initiatives from scratch, and most brands already have existing accounts on big platforms such as Facebook and Instagram.

How many likes do you get for each post? Do your current efforts fit into your public relations and marketing strategy? How many people click on your paid ads on social media? Answering questions like these will help you better understand what to improve and what you need to outsource.

As you evaluate your social media accounts, you may also look at your competitors to see their performance. That way, you can know what they’re doing best and think of ways to match them.

Completing this stage will make it easier for you to proceed to the next stages.

2. Determine Project Goals

After you assess your social media marketing activities and see what you need to improve, this second step is all about creating a priority list for your marketing goals.

The knowledge you gained from your assessment will help you outline your project, outline your objectives, and identify what type of social media marketing solutions you need.

There are many different types of social media marketing solutions, and knowing what type to invest in is crucial to getting the most out of your investment. Here are some of the common types of social media marketing for businesses:

• Content creation also referred to as content marketing is a strategic approach that focuses on planning, creating, and distributing content such as text posts, infographics, and even videos.
• Paid media marketing is a great strategy to boost traffic, improve conversions, and increase sales through paid placements. Some businesses may feel like it’s not a good approach, but paid media marketing can play a crucial component in a brand’s online presence when done correctly.
• Influencer marketing has risen in popularity in recent years and it refers to a collaboration between a popular social media figure and a brand. This type of social media marketing has been around since the dawn of social media but the current market and consumer behavior made it a go-to for businesses across different industries.
• Social media management refers to the ongoing process of organically engaging with audiences, replying to their inquiries, and responding to comments. Consistent social media management is important to building a strong brand image and forming genuine relationships with customers.

Knowing the different types of social media marketing solutions will make it easier to create a priority list and prepare a budget. For example, if you find that you lack consistency when it comes to your posts, your goal may lean toward content creation.

Additionally, paid media marketing also costs more than other efforts, so if that’s what you need, you should expect to spend more.

3. Get Quotes from SMM Agencies

The third stage is to do your research on average costs and request a quote from your ideal partner. The best way to prepare for your project is to look up the average rate of social media marketing agencies on Clutch.

Typically, these agencies charge hourly or monthly rates for their services. Still, you should also expect additional fees for other services and types of social media marketing, such as paid media marketing.

Once you’ve got an idea of how much the average project costs, you can reach out to your ideal partner to request a quote to accurately estimate how much your project will cost.

Make sure you articulate the goals and project details so they can provide you with the right estimates. Will you need daily posts? Which platforms will they work on? If you leave out details like these, they might not be able to gauge how much you’ll be spending.

If you have a limited budget, you can opt to connect with a freelancer or off-shore service provider from Southeast Asia or Eastern Europe. Generally, their rates are lower than full-scale agencies from Western Europe and North America.

4. Leave Room for Other Expenses

Aside from the agency fees, there will be other expenses to keep in mind when determining your budget.

If paid media marketing is part of your requirements, know that ad spend is separate from the monthly or hourly fees they’ll charge you. Don’t be intimidated though. One of the advantages of paid ads is that you can scale down or up depending on your needs and budget, and plenty of social media platforms allow marketing managers to put a cap on their ad spend.

Cost per click is the flat rate a company gets charged whenever a browser clicks on their ads. If you’re planning to include paid ads, you can calculate how much you’ll be spending by multiplying the cost per click by the number of impressions and the click-through rate for each social media channel.

Aside from paid ad marketing expenses, you should also leave room for creative and production costs for your content.

Of course, content should stay fresh. You can’t reuse the same images and graphics again and again. Agencies will charge additional fees if you need them to handle photography, videography, and animation. Depending on the scale of the shoot, concept, and output, these fees will vary widely so discuss this properly with the vendor before hiring them.

5. Allot Resources for Seasonal or Special Campaigns

Just like your general marketing plan, your social media marketing efforts may also need bespoke campaigns to celebrate occasions, milestones, and events throughout the year.

A seasonal marketing campaign is a one-time event in a year that aims to promote products or services that are relevant or in demand during that period. Examples of common seasonal campaigns include new summer apparel, limited edition fall drinks, and Valentine’s Day promos.

Meanwhile, special marketing campaigns can be held for new product launches or if your brand is undergoing a rebrand.

Both types of campaigns can help increase sales conversion, drive traffic, and strengthen customer relationships. However, they will cost you more as they will require new creatives, content, and strategies.

Look at some of the most successful brands, they’re able to create a sense of urgency and even FOMO (fear of missing out) by launching seasonal campaigns. Be prepared to allocate resources if you want to run bespoke seasonal campaigns. 

Social Media Marketing Budget Template

Download our free marketing budget template here.

What Factors Impact Social Media Marketing Costs?

There’s no exact answer to how much you should spend because social media marketing costs rely on many factors. As you create your budget, remember these variables:

• Company niche
• Company stage
• Industry 
• Amount of content
• Type of social media marketing (i.e. paid media)
• Scale of campaign
• Location

Carefully consider each so you can create a more accurate budget for your social media marketing needs.

Reach Your Customers with Social Media Marketing

Social media marketing is one of the quickest and most direct ways to connect with your target audience. In this digital age, many customers use a brand’s social media account as a reference to see its credibility, especially when they’re looking up small businesses or startups.

Businesses don’t need to break the bank when it comes to investing in their social media efforts. All you need is the right social media marketing team and a practical budget, then your imagination will be your limit.

By understanding your needs and determining your goals, planning your budget will be easier. Don’t lose focus on your priorities, remember to consider each factor mentioned, and know what to expect so you don’t get surprised by any additional expenses.

Download our social media marketing budget template and plan intelligently.

Interested in hiring a dedicated partner? Check out the leading social media marketing agencies on Clutch. Save time by maximizing the filters based on price, location, and client ratings to match with the best partner for your needs.

About the Author

Elaine Margrethe Alcantara

Elaine Margrethe is a part of Clutch’s global team of writers. She is responsible for writing blogs, supporting blog processes, and content creation efforts.

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