One of the most recurring questions that we hear is, “How much should I spend on social media advertising for my company?” Whether you’re continuing your social media campaign or starting a new one, there are several questions to answer, from how much you should spend to where you should spend it.
Companies spend, on average, between $200 and $350 per day for advertising on social media. But what does it mean for smaller, local businesses? It is necessary to define your budget carefully, according to your means, the size of your company, your target, and your objectives!
How to Set a Social Media Budget – 5 Easy Steps
1. Define the Goal of Your Advertising Campaign
The amount of your budget to spend on social media depends on your advertising objectives. You can choose between several objectives: generating leads, increasing your notoriety, getting closer to consumers, promoting a product, or increasing your sales.
It can seem difficult to sell products directly on social media if you don’t have the right approach. You will just have to adapt your strategy and your budget in order to obtain an optimal cost per conversion. This is the goal that usually calls for the most experimentation, originality, and skill.
It is necessary to define only one objective per advertising campaign to be able to optimize it properly. Indeed, social networks use the information they have on Internet users to target them. Thus, some users have a tendency to interact with you posts and therefore generate engagement. Others tend to buy online.
So, it’s not always the best strategy to want a campaign to lead to both conversions and engagement on the social platform.
2. Analyze Your Competitors on Social Networks
The quality and quantity of competitors have an impact on advertising budgets. In fact, in highly competitive and fast-growing sectors, bids will go up very quickly, and your company will have to define a higher cost per click.
Nevertheless, before setting your budget, it is necessary to analyze your market. What is your competition doing? Facebook and other platforms can provide you with an advertising library to evaluate your competitors’ social media ads strategy.
3. Set Up the Right Budget
While social media advertising strategy varies from company to company, most businesses, on average, spend about 10–13% of their annual revenue on marketing. About 25% of that budget is spent on paid social media campaigns, which can include search and social media advertising, among other things.
When your company starts budgeting for social media advertising, use these percentages as a reference. Depending on your past social media ROI as well as your digital marketing goals, you may invest more or less in social media compared to other advertising channels.
4. Set a Budget According to the Selected Social Network
Ads on social media platforms do not all have the same cost. Depending on the number and type of users, the offers vary from one platform to another.
On Facebook and Instagram, you can start with $1 per day, while the daily price on LinkedIn is more like $10 because this professionals’ network allows you to target your audience more precisely. In terms of performance, Facebook offers a cost per click between $0.10 and $0.70, while Twitter’s is around $1, and LinkedIn is close to $5. These numbers are an average, and they change depending on the goal and the type of advertising.
As you realized, it is difficult to give you a precise number for your social media ads. How much you should invest depends on many things, like your goals, your target audience, your location, and the social network you want to reach.
5. Knowing Which Social Media Platforms Your Potential Customers Use
When you start your social media advertising campaign, research your target audience. If you focus on social media platforms that seem popular, instead of confirming that your target audience is using them, you may be just wasting money.
Audience demographics can help your team narrow down your list of potential social media platforms. For example, if your audience is women ages 18–29, Instagram is a great option. Nearly 65% of people in this age group use the platform. Additionally, 39% of women use Instagram, making it the second most popular platform for women.
Most companies have a team entirely dedicated to the management of their social media. preparation, planning, interaction, analysis… But smaller companies also deserve the best to help them advertise their services and products. If you are looking for tips, strategies, and advice on how to create better social media ads, our marketing team at Crossroads Professional Coaching is here to help. You can learn more about all our marketing services by visiting our marketing page or by calling (225) 341-4147.