How To Create the Perfect Social Media Budget for Your Business

What percentage of your company’s marketing spend goes to social media? This question has more layers and complexities than it may first appear. 

The key issue: It’s easy to undervalue social media as a marketing tool, and there’s a very simple reason why. Using social apps like Instagram and TikTok for personal rather than work reasons is typically free. This creates the impression that these networks don’t have monetary value and that assumption can, in turn, cause marketers to limit their budgets.

When your company overcomes the temptation to see these platforms through a casual, free lens, however, you can turn social media marketing into a featured part of your overall marketing strategy. Paid social media marketing can increase your ability to reach your target audience where they are, delivering content perfectly designed to capture their attention.

See how social media budgeting fits into the paid marketing puzzle.

What Is a Social Media Budget and Why Is It Important To Create One?

A social media budget is simply the part of your overall paid marketing spend allocated to social media. The term encompasses all platforms, as well as all types of spend — everything from labor costs to technology expenses and direct spending on promoted posts and campaigns falls under this umbrella.

Depending on your organization’s specific needs, related to its size, market, industry and target audience, your social media strategy will look unique. This means social media budgets can vary widely from one business to the next, as can the appropriate size and organizational structure of the team involved. Despite this variability, setting a budget specifically for social media marketing is a consistent best practice.

By setting an official social media budget, rather than assigning funds to social spending ad hoc, your organization gains several advantages:

• Including social media in your marketing budget demonstrates its importance, encouraging executives to commit to ambitious campaigns.
• When you account for social media through a budget, it’s possible to track return on investment (ROI) and analyze spending effectiveness.
• These calculations, carried out over time, can act as the fuel for consistent tuning and optimization of your brand’s social media performance.

Social media marketing isn’t just about posting content. It’s also about related practices like analyzing the reach and impact of the content. Activities like social listening — studying the impact of  your posts — and engaging directly with your community of followers are useful additions to your social strategy. The employee time that goes into these processes is part of the social media marketing budget.

Learn how to optimize your brand’s use of social media.

How Do You Make Your Social Media Budget?

As with any kind of marketing budget, the process of spending on social media is shaped by your needs. Social media marketing techniques can target a wide variety of audience segments, delivering a nearly limitless variety of messages.

Once you narrow down your objectives, you can determine what types of platforms, media types and outreach styles are right for your organization. Some of the most important goals for social media marketers to aim for include:

• Awareness: Do you want to raise your company’s profile among a large target audience? Social media is useful for this purpose, providing a platform to show off consistently branded visual assets that will increase recognition.
• Engagement: Social media is a two-way street, with your customers able to communicate directly with your employees. Social media budgeting can go toward salaries and technology that enables these conversations with your audience.
• Conversions: Not every business will have the ability to make sales directly through social media marketing. As social platforms add more advanced features, however, this merger between e-commerce and marketing is becoming more common and worth investigating.
• Site traffic: Social media posts are great promotional tools for other forms of marketing content. Linking to extended blog posts, videos and other deliverables through well-targeted social posts is a way to boost traffic and increase the value of that content.

Budgeting Priorities: Customized and Refined

Setting your objectives and defining your target audience will help you select platforms and determine how much to spend on each. As with any kind of marketing spending, the key is to maximize efficiency. Researching each network and determining the alignment with your goals will help your team achieve maximum results for your level of investment.

This process of finding an optimal spend level may take some time — since your audience and goals are unique to you, you may have your own definition of success. Rather than referring to universal benchmarks, it can pay to try out various levels of social investment and settle on the version that makes sense for you.

Check out our social media marketing benchmarks.

What Is Included in a Social Media Budget?

When you define your special media budget, what are the processes and deliverables that you need to set funds aside for? The most direct way to spend money is on purchased media, using the various platforms’ tool sets to put your posts in front of audience members. You will inevitably have other needs, however, including spending on employees’ salaries and the tech tools they use to do their jobs.

Ad Spend, Platform by Platform

Buying paid media to extend the reach of your social media posts can mean different things, based on your social media platform of choice. Which networks you focus on will depend on your intended audience. A rough breakdown of top platforms for social media advertising includes:

• LinkedIn: The gold standard for business-to-business communication, LinkedIn is home to numerous professionals across industries. Paying to expand your reach on this no-frills site is a way to attract eyes in your field.
• Facebook: This Meta platform boasts a large user base and can help you reach a more grown-up audience. It should be noted, however, that to be seen, Facebook ads do have to overcome a recent flood of AI-generated content designed to game the system and earn impressions.
• Instagram: With more of a consumer focus but a strong business presence, buying Instagram ads can help you place a still image or short-form video in front of a wide general audience. In recent years, the platform has encouraged the use of Reels, its TikTok-like video offering and Threads, designed to emulate the former Twitter.
• X / Twitter: This recently renamed application has served for years as the de facto social media platform for followers of breaking news, and is suitable for both business and consumer communications. Spending here has been made risky, however, due to unpredictable changes to the platform and the erosion of its user base from its peak.
• TikTok: With a tendency to break new trends, TikTok remains a very popular platform among consumers. Buying ad space on TikTok could be a way to reach out to the niche communities that spring up here, such as the literary-focused BookTok.
• Snapchat: This app, which rose to prominence among millennial consumers, has seen its cultural footprint among that group decrease as other platforms such as Instagram have emulated its functionality — however, Snapchat ads can help connect you with a new generation of young consumers.
• Pinterest: Boasting a community willing to engage with brands as they search for inspiration around fashion, crafts, decor, beauty and more, Pinterest can help you win direct conversions by selling your products.

Human Capital

Buying ads across platforms isn’t the only focus for your social budget. You can also allocate spend for dedicated employees who will take ownership of your brand’s social media strategy. While there’s an obvious need for people to run your strategy, some business leaders overlook the need to dedicate employees to the task.

Workers contributing to a social media advertising strategy can include:

• Creative personnel to create the images, text, videos and other media that become parts of compelling social media posts.
• Strategists to plot out social calendars, using their expertise to direct budget to the most impactful projects and priorities for the brand.
• Communications personnel to serve as social media managers and engage directly with customers through companies’ official accounts.
• Analysts to measure the impact of posts, A/B test the latest releases and propose new approaches based on quantitative results.

Technology Tools

Creating a social media account is free across most platforms. That doesn’t mean, however, that businesses shouldn’t spend on social media technology. Social suites and tools (eg. Hootsuite or Sprout Social) to help businesses manage their posts, measure results and post consistently across platforms and networks can provide ROI by improving results significantly.

Learn more in our social media marketing guide.

Frequently Asked Questions About Social Media Budgeting

There are so many moving parts in a social media marketing campaign, it’s natural to have more questions. A few quick but important queries include:

• How much should you spend (total) on social media marketing?

Average spending on social media is at 11% of marketing spend in the most recent CMO Survey. That number is down significantly from 17% a year before — and professionals expect it will rise back to 12.2% in the year following the survey, and 16.3% in five years. The amount your brand spends is entirely dependent on your goals, audience preferences and brand values.

• What goes into ongoing management of paid social campaigns?

Managing social media campaigns for the long term can include content moderation and community engagement, along with consistent data analysis.

• How do you measure the success of a social media campaign?

The success of a campaign depends on your objective. Your goal — conversions, engagement, awareness, traffic — will determine what to measure.

• When is it time to change course with a social campaign? 

The relative impact of a social media campaign is unique to your brand. By testing paid advertising efforts over time and measuring them, you can set benchmarks and become adept at determining when campaigns are failing to live up to your standards.

Read more about setting a paid advertising budget that makes sense for you.

Ready To Get Started on Your Social Media Marketing Budget?

If your brand doesn’t have a dedicated budget for social media, whether that means only using free apps or drawing resources from general marketing spend ad hoc, you can unlock new opportunities by becoming more intentional about your spending. Paid social media ads have the ability to reach new audiences, based on targeting parameters set by you.

With a budget, you can track, adjust and optimize your spending. This level of focus may pay off as you achieve deeply held marketing goals.