Step One: Set Your Total Marketing Budget
Because businesses vary so much in terms of costs and profits, marketing budgets vary greatly as well. Your marketing budget may depend on the size of your business, how long you’ve been up and running, what kind of expenses you have, and your overall profit margins. Your budget will also depend on needs. You need to consider the development of your brand in terms of websites, e-brochures, logos, email campaigns, sales presentations, and of course, ads. When starting your business, your marketing budget will need to be much higher in order to get your brand established as quickly as possible. Many small businesses set a starting marketing budget of about 20% of sales. However, once your brand has been established, this number can decrease over time. While you will still need to consider the ongoing expenses of promotions and advertising, you will likely be able to use many of the initial start-up materials you had created for a long time and you can take those out of the budget. In general, with businesses bringing in less than $1 million per year (net), they normally have a marketing budget between 10% and 15%. As the revenue increases, the marketing budget percentage can decrease. It all depends on how competitive your industry or local market is.
Step Two: Devote a Percentage to Internet Marketing
The next step in creating your budget is devoting a percentage of it to internet marketing. This includes online ads, email marketing, social media marketing, landing pages, blogs, and more. Really, any kind of business exposure done online can be considered internet marketing. Again, depending on your type of business, your internet marketing budget will likely differ from others. For instance, if your business is run solely through a website, you will probably need to dedicate most, if not all of your marketing budget to online marketing. However, if you are a local walk-in store with a small website online just for local customers or company image purposes, then you might want to dedicate only a quarter of your marketing budget to internet marketing, specifically to local search optimization.
Just to give you an idea though, in 2015, businesses dedicated an average of 35% of their marketing budgets to digital marketing. However, the forecast for 2017 shows that digital marketing budgets will be increasing as businesses dedicate less to other forms of marketing, such as print and radio ads. This increase could make digital marketing budgets well over 50% by the end of this year. Business owners say they are seeing a much higher return on their investment when investing in digital marketing versus more traditional means, which is likely spurring the change.
Step Three: Determine the Social Media Marketing Portion of Your Budget
While much of digital marketing budgets go to SEO in the way of content marketing, another major part of it should go to social media marketing as well. In fact, between SEO and social media marketing, businesses spent about 50% of their digital budgets on those two categories alone. In the coming years, businesses are expected to increase their digital budgets in the areas of social media, content, and SEO. This is because of the high rate of return on those investments. Marketers found a whopping 42% to 57% lead generation due to their efforts in content and social media marketing last year.
In 2017, the average business would be smart to allocate about 25% of their internet marketing budget to a great social media marketing plan. Remember though, this should be backed by a strong content marketing strategy, so your company has great content to share and discuss on social media, and so there is a reason for the customer to go from your social media page to your website for conversion.
Step Four: Monitor Closely and Adjust Accordingly
As previously mentioned, every business is different and so every business needs to do the work to determine the best possible budget for them. Once you set your budget and start executing your marketing plans, be sure to monitor the results often and carefully. When it comes to social media marketing for business, the potential rewards can be great. However, there can be changes in the market, in internet trends, and in the effectiveness of your campaigns in general. If you find your budget isn’t working, analyze why and make changes. If you find it to be more than successful, you can always decrease it and put those funds where they are most needed. It’s a good idea to keep an eye on marketing trends and costs to evaluate where you stand at least once per month if not more often.
If you’re not sure how to go about setting a budget for social media marketing, or if you’re not sure how best to allocate the money you have budgeted for it, please contact me. I will be happy to take a look at your business and budget and let you know what I think would work best for your specific business and how our Designers, Social Media Marketers, Content Creators and SEO experts can help you make it happen.