Budget series pt. 1: How to determine your paid social media budget for 2018
Consumers are overwhelmed with the amount of content and media they are exposed to in a given day. The explosion of mobile usage, social technology, and IoT innovation have caused an avalanche of interruptions from unwanted sources.
The result: consumer attention is also at an all-time low.
According to comScore, millennial attention spans require ads that are just 5 to 6 seconds in length. And considering that they spend 61% of their time in smartphone apps, 8% on the mobile web, 25% on desktop, and just 5% on tablets; you can imagine how difficult it might be to reach them with a brand message.
One way to break through the clutter: paid social media marketing.
It guarantees that you are reaching the right customer, at the right time, in the right channel and with the right content.
Global social media spending
If you take a look at social media spending habits since 2015, you’ll notice a few interesting data points. Total spend is forecasted to reach nearly $36 billion USD in 2017 representing about 16% of all digital ad spending globally. This really isn’t that surprising considering paid media’s targeting capabilities, reporting, and ROI delivery. It’s clear that paid social media investments require aggressive consideration within an overall marketing budget.
This data shows us that paid social is one of the most popular and fastest-growing types of marketing strategy across the globe. Not only that, but its value increases as more and more users get started with social media marketing and more potential customers are viewing your content and paid media.
Setting your social media budget
Marketing budgets are completely subjective and vary widely from company to company and within various verticals. Luckily, however, there are some solid tips you can follow when determining how much you need to be spending on marketing material and paid social media.
Here are three ways to think about budgeting for your paid media spend:
- Past performance. This approach entails that you look through previous paid media reports and analytics to better understand the varying degrees of investment and how it affected performance. If the results exceeded expectations, you can set the same budget parameters from the previous year. If it didn’t meet expectations, you should do more research and find out why. Did the content not resonate with the audience? Was the targeting not as precise as it should have been? Once you determine why you can make the adjustments and set your budget and strategy accordingly.
- Industry benchmarking. If you are new to paid social, there are several resources online that can help you map out your initial investment. For example, The CMO Survey showed that marketing leaders spent 11.7% of their budgets on social media. So if your total advertising budget is $100K for the year, you will invest $11,700 of that to paid social.
- Performance-based approach. This entails that you first determine a budget and then assign laser focused KPIs to your campaign. The KPIs can be clicks, sales, click-through rate or engagement rate. If you are exceeding those goals month to month, you can add incremental budget to your spend and continue to do so until your metrics start to decline
Social media is constantly evolving and showing no signs of slowing down. Companies are now shifting their investments into paid social because they know it’s effective and measurable. It’s no longer a “nice to have”. In fact, it’s critical in order to reach your audience and compete in today’s market.
- Budget series pt. 2: How to allocate your paid social budget
- Budget series pt. 3: How to ask for more paid social budget
- Develop strategies for your clients