Posted 05.07.2019 by Josh Krakauer
Savvy B2B marketers know that social media is a powerful way to grow an audience, test offers, convert leads, and ultimately drive sales. The foundation of a growing business is getting and keeping customers, and social offers the opportunity to connect with customers at every stage of their buying journey.
To build a social media strategy for your B2B business, you need to first have a social media budget.
With a realistic budget, you’ll be able to:
And whether you’re scoping out a social media campaign or planning a whole year, the question is…
“How much should we budget?”
The answer is…$127,500.
(Hey, wouldn’t a straight-forward answer be nicer than ‘it depends?’ 😂)
The reality is — it does depend. While surveys and examples give us some helpful hints, your social media budget is going to look entirely different than another B2B company for a number of reasons.
There are a few elements that every successful B2B social media budget will have.
Here’s what to keep in mind:
Let’s start by taking a look at the questions you should ask yourself when crafting a social media budget for a campaign or annual plan.
Creating a budget that helps your brand grow means answering several key questions about your social media strategy — they are:
Once you have the answers to these questions, you can start deciding how much you’ll spend on social media marketing.
Making sure you have solid goals in mind before you set your social media budget can mean the difference between success and failure.
That’s because good goals help you define your metrics of success and zero in on what is important.
Notice I said good goals. It’s not enough to just have a goal. They need to be outcome-oriented and SMART.
First, break down your goals into Primary and Secondary Goals.
Your primary business goals largely link to sales and profit growth, for instance:
Your business goals may also connect to non-revenue generating activities like hiring top talent and retaining key employees. These are more difficult to measure, but critical to success.
Now ask how social media will support those goals.
Will social media have a direct relationship in achieving your goals, or indirect?
If social media spending is highly correlated to achieving your chosen business goals, you will assign a higher percentage of your total marketing budget towards social media. If the relationship is indirect or unproven, it will be lower.
Next, it helps to set SMART social media goals to measure your content engagement and growth on channels throughout the year. While social media channel goals
SMART stands for:
Specific. The more narrow and specific you can get with your goal, the better it is. For example, don’t say you want to “increase engagement.” Instead, say “I want to increase our average Instagram post engagement rate by 50%.”
Measurable. What are your metrics? Sure, you might want a post to “go viral” but what does that look like? A measurement for virality could be “comments per post” or referral traffic from social channels.
Attainable. Is your social media goal realistic for your business? For example, you might have dreams of having your tweet shared by Kim Kardashian (like Laura often brags about) — but she’s probably not going to do that for your brand.
Relevant. Is this goal germane to your business? Where does it fit in your overall mission? For example, if you’re an IT business catering to mid-sized banks, you might not need to increase your Tik-Tok following since it’s mainly for younger users. On the other hand, LinkedIn is packed full of decision makers.
Time-bound. Is this something your brand needs to pursue right now? What outcome do you expect to see happen in the next month, quarter, or year?
Let’s take a look at an example:
Bad goal: I want to increase brand awareness!
SMART goal: I want to increase LinkedIn followers by 500 users by end of Q3.
Do you see the difference? When you get specific with your goal, you have a clearer idea of how to get there and you have a measure of success. Compare that to the vague goal and you can see how it’s much better for your social media strategy.
If you are setting a budget for a campaign, you will be making a similar calculation for a shorter timeframe.
Knowing exactly who your audience is is crucial to setting a good strategy, and therefore budget. That’s because it’ll help you decide everything from which social media channels you’ll end up advertising on to the exact copy you’ll be using.
There are three types of audience groups you should be looking towards to reach out to:
Now ask: Who are the users in each of these audience groups? What do they look like? How can you add value to them with your social media presence?
For more on finding your audience, check out our article on building a social media strategy framework here.
Once you know who your target audience is, you need to find out …
No, don’t try to find their actual homes (unless you’re looking to increase your legal budget as well).
Instead, find where they live online — the social media platforms they frequent and engage with. Look to your target audience. This will tell you what platforms to focus on and, more importantly, which ones you can ignore.
Are they younger millennials looking to secure more funding for their start ups? You likely won’t find them on Pinterest then.
Are they older middle managers looking for bigger networking opportunities? LinkedIn should be your focus.
Once you have recognized which social media platforms your target market frequents, you’ll be able to create a solid budget around them.
If you need some numbers to help drive your decision, here’s some interesting data from the Pew Research Center on American social media usage.
Some things to note:
Bottom line: No matter which platform(s) you choose, there will be a deep well of users to market to. The important thing is you choose the one in line with your goals and target audience.
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There’s no one magical formula for a successful social media budget. But the simplest calculation is to take 5-30% of your desired gross revenue goal and allocate it to marketing. Then take 10-25% of your marketing budget and allocate it to social media spending. Then assign 60% of that budget to brand building activities, and 40% to sales activation.
For example, if you planned to hit $3,000,000 in 2019 and assigned 10% to marketing you would have a budget pool of $300,000 for marketing investments. That would leave $30,000 – $75,000 for social media, or $2,500 – $6,250/mo.
A decent start!
Like we said before, budgets look different from company to company. This calculation uses industry-standard averages. The important thing is your budget fits your goals and is in line with your target revenue.
The US Small Business Administration suggests that small businesses earning revenue less than $5 million spend 7% – 8% of their gross income on marketing — with your budget being split between developing your brand and promoting your business.
However, some sources suggest budgeting even more than that for small and new businesses. Here are some rules of thumb from Wordstream:
Notice that older businesses can spend less on marketing. That’s because the more established your business is, the more well known it is for customers, too. That means you can spend less time on things like brand awareness.
For example, Amazon spent a little more than 5% of their budget on marketing in 2016. They were able to manage this because they earned more than $135 billion in revenue that year. So even at 5%, they still spent more than $7 billion in marketing.
That’s what happens when you grow your revenue and brand awareness. You can afford to spend “less” on marketing efforts and still reap substantial rewards.
There are other factors you may consider when setting your social media budget.
According to a CMO Survey of more than 2,500 top marketers at for-profit companies, social media spend has slowed in recent years. However, spend is also projected to increase steadily over the next five years.
And despite the slow in spend, top marketers still believe that “the use of social media has increased in critical strategic activities, including building brands, customer acquisition, customer retention, product/service introductions, and customer service,” according to the survey.
In fact, 52% of B2B companies plan to increase their marketing budgets in the coming years, according to Sagefrog Marketing Group.
The way you ultimately divide up your marketing budget is up to you — though according to CMO Survey data, companies tend to follow the following allocation on average for paid media:
A 2018 Content Marketing Institute study found that the average B2B marketer spent 26% of their total marketing budget on content marketing, with the number moving to 40% for the highest-performing companies. Organic social media was included in the content marketing category.
Another important budget consideration is flexibility. Dwayne Wait Jr of Schell Games notes that his social media marketing budget is set based on individual campaigns. He also has the authority to spend more if the campaigns have a positive return on investment.
Dwayne also recommends setting a different budget threshold for the goal of the campaign. For instance, a paid social channel like Reddit advertising has the ability to fulfill awareness and acquisition objectives, therefore would be assigned a larger budget than Facebook, which they just use for awareness.
Now that you know how much you have to spend on your marketing budget, let’s jump into the heart of the matter: The marketing budget itself.
Social media is one channel in your integrated marketing mix, and it breaks down into a number of unique functions. There are five core social media marketing roles to account for in your planning.
For each function, you can ask yourself two key budget questions:
Here are five elements to keep in mind when developing your own social media marketing budget template.
This is the amount of money you spend on social media advertisements. Organic social strategies can do a lot — but sometimes you hit a limit of how many new users you can reach. That’s why paid amplification work so well.
With Facebook, Instagram, Twitter, Pinterest, LinkedIn, and Twitter all offering native advertising analytics and targeting tools, you’ll be able to push social media posts directly to your audience on the social media platform you’re using.
Doing so can allow you to accomplish goals like:
The best part: You can simply promote content and organic social media posts that are already doing well. This will drive more engagement towards those posts and help accomplish any of the goals outlined above.
This is the part of your budget for the software and tools you’ll be using for your social media campaigns. These tools will help automate your social media workflow and effectively manage all of your platforms saving a lot of headaches for you. Of course, the key is to choose the right tools for you. Once again, this will depend on your audience and goals.
When it comes to specific social media marketing tools and software, here are a few suggestions for ones you might want to use based on their purpose:
You might leverage a lot of these tools — or you might only use a few. It all depends on your goals. When coupled with a good social media strategy, these tools and software can be a huge boon for your marketing efforts.
You might have the biggest social media advertising budget in the world, but if you don’t have helpful, quality content to back it up, you’re not going to get very far at all. That’s why it’s so important to make sure that you have a solid content production process in place before you even consider which channels you’re going to advertise on.
The content can come in many different shapes including:
What you choose doesn’t matter as long as it’s helpful to your users. Only then will they want to engage with it and your brand. So consider how content fits into your brand overall.
All important questions to answer when budgeting for social media.
Behind every good social media account is a great social media manager — or more accurately, a team of great social media managers.
While it’s easy to think that social media is as simple as firing off a few tweets or Instagram posts, the work needed requires dedicated individuals at the helm in order to successfully navigate the world of social media.
This team is responsible for all five social media functions including:
Your B2B social media budget should include how much you’re willing to pay for social media managers. Of course, you can always outsource this work — which brings us to …
Sometimes the best thing you can do for your marketing strategy is outsourcing your business’s social media work entirely. And there are a lot of agencies out there who will take on your social media work. They’ll come complete with content producers, analytic pros, graphic designers, and paid strategists who will help get you the results you need.
A good B2B social media agency will charge anywhere between $2,000 / month to $15,000 / month for their services depending on your needs and goals.
Justifying that wide range, consider this: The average salary for a social media manager is around $55,000 / year, according to Glassdoor. Add in overhead and benefits and you’re close to $6,000 per month.
For less than that amount, you can outsource your social media work to an agency that has a team of dedicated professionals who can help drive results. This can save you even more time and money when you consider the cost of onboarding and training a dedicated manager.
If you do decide to go with an agency, you’ll be in good company. According to the previously mentioned CMO survey, nearly ¼ of all social media is conducted by third-party agencies.
This is a part of a growing trend that’s predicted to grow into the future. In fact, reliance on outside agencies to conduct social media is the highest it’s been in five years. If that sounds like something you’re interested, we want to help. Sign up today for a free discovery session with Sculpt.
Our team will talk with you and assess what your brand needs from social media. Even if you decide you don’t want to work with us, you’ll walk way with 3 – 5 action items that’ll help drive social media across the customer journey for free.