A Social Media Budget Breakdown for Every Size Business

As a small business owner, one of the many struggles often voiced is centered around budgets. How much should I assign to specific marketing initiatives? Will social media work? How will I know if it’s successful? These are all good questions and should become central to making decisions about budgets and strategy development.

Every business—small, medium, or large—should have a social strategy, and every strategy should be backed by a social media budget.

Budgeting helps you ensure you’ll have the funds to achieve your goals, whether that’s promoting a new business or driving sales on a new product. Plus, without an accurate social media marketing budget, it’s impossible to know the true ROI of your work.

There’s no such thing as a one-size-fits-all social media budget. Every company has different resources and different priorities. But whether you’re working with a shoestring or cushy budget, these are the key components you should figure into your calculations.

How much money should you spend on social media?

Social media marketing is crucial: a guide on "Digital 2019: Global Internet Use Accelerates"  on the planet has a social media account—and that figure is growing. But remember, your social media budget should be one piece of a larger marketing pie.

According to the Business Development Bank of Canada, a common rule of thumb is that B2B companies should allocate 2-5% of revenue on marketing, while B2C companies should spend between 5-10%.

The same research found that small businesses in Canada spend an average of $30,000 a year. Mid-sized businesses (20-49 employees) spend an average of $60,000, and companies with more than 50 employees spend more than $100,000 annually.

So how much should social media marketing cost? Before deciding how much of your marketing budget to allocate to social, research your customers and determine how social media will help you achieve your marketing objectives. For instance, if a significant percentage of your sales come from the Internet, it may make sense for your brand to spend more on social media than print, broadcast, direct mail, or other marketing channels.

According to this year’s CMO Survey over the next five years, the percentage of marketing budget spent on social media breaks down as follows:

• B2B Product: 16.6%

• B2B Services: 20.5%

• B2C Product: 20.9%

• B2C Services: 24.7%

Use these averages as benchmarks for your business, and then tailor them around your goals and resources.

6 Components to include in your social media budget

1. Content creation

2. Software and tools

3. Paid advertising

4. Paid partnerships

5. Training

6. Management

These are the core components you should include in your social media marketing budget. Explore them here is more detail