Posted at Mar 18, 2022 10:41:00 AM by THAT Agency | Share
How much are you spending on your social media campaigns right now? Is that just right or too much? Do businesses your size usually spend this much money every month? If you’re asking questions like those, you’re not alone. Understanding the answer to the bigger question - how do you calculate a social media ad budget - is key for many companies today, but there’s no easy answer. This quick guide can help you understand the basics of social media ads in 2022.
Why The Budget Matters
It may help to begin the process by understanding why you should even set a budget for your social media advertising in the first place. After all, social media is free, right? Not quite. Remember that quite a bit of work goes into advertising on social media.
You not only need to create the content, but you’ll need to factor in some paid advertising on the platform of your choice, as well as the time your team puts in. Additionally, just because posting to social media is free, monitoring how well your posts are doing (so you can eventually calculate your ROI) is not, so setting a firm budget before you get started is an absolute must.
Budgets Begin with Goals
You may think that a budget begins with hard numbers, but that’s just not the case. Instead, you have to start with the end in mind. What are you hoping to do every time a social media post goes out from your company? If you’re looking for brand exposure, you’ll need to think about the overall cost of paid awareness campaigns. If you’re hoping to increase web traffic, you’ll need to come up with entirely different goals. Driving sales means something different still.
Begin Thinking About Costs
Once you know what you want to do, you can begin factoring in costs. The biggest cost here is going to be the time that your social media marketing team puts into this. Many businesses outsource social media marketing, and for good reason. Marketing in this space takes a special set of skills, and your team may not be ready to take that on. Whether you handle it in-house or you go with a specialized team, though, that should be your first (and likely your biggest) line item.
Once you add that to the picture, you’ll want to think about content creation as the next largest cost. Good content is what’s going to help your campaign stand out over everyone else’s. You’ll want enough content so you can consistently publish, and you’ll want a variety of content to help you achieve your goals. Remember that lots of things count as content. You might have a simple post, but you might also have a TikTok video, Instagram-worthy photography, or even a live video feed. All of these will need to be carefully planned and coordinated, and often you’ll need to pay for a pro to handle your posts. Keep in mind that video production can cost more than $1000/video, but it’s well worth it because often the ROI on a video post exceeds your wildest expectations.
The costs don’t stop there. Instead, you’ll need to think about the virtual tools that will help you get the job done well. You’ll need a subscription to a social media management tool, as well as one that can help you better track your analytics. You’ll also need to invest in customer support tools to help you better deal with the people coming in and commenting on your posts.
Finally, factor in the costs around paid advertising. Social media ads can really influence customers. One survey found that 59% of customers said a paid ad had influenced them to move forward with one company over another, so this is a space that can really pay off. Think about what platforms your message performs best on before you decide how much to allocate, as the cost per click can vary from platform to platform.
There is one other cost some companies invest in, but it’s not required. It does, however, amp up your numbers very quickly - influencer marketing. Micro-influencers and celebs alike are for sale on nearly every platform, and forming a brand partnership with them can seriously impact your overall presence. It can also get quite expensive, though, so be careful in this space.
Making the Budget
Once you know what things are going to cost, you can make your budget and begin to calculate your overall ROI. Your budget is going to help you stay on track throughout 2022, and while the final product may not be the same product you started with - it’s likely to grow and change as your strategy does - it will certainly help you decide whether every campaign was actually worth the time and money.