Every brand worth it’s money is on social media and everyone wants a piece of this new way to acquire a lot of customers and stay in touch with them. Every enterprise or product or brand has a social media budget now. But the whole idea of setting the budget should depend on a few key factors that make sense and are aligned to the goals that are set for execution. Let us take a look at how to set your social media budget
Set a tangible and sensible revenue goal for your product or service from social media conversions. Ask a few relevant questions like ” How much money can we make if we spend $xxx on Facebook ads?”or ” For every $yy spent on a twitter campaign, how many actual leads/conversions am I getting?” After you have discussed with the key stakeholders and the actual team that is executing, come up with a number. For example if you product cost is $1000 and your margin is $100 on that, then to generate $3000 from social media, you need to get a minimum of 30 orders. And for this calculation, if you are spending anything more than $300, it does not make any sense. The numbers are indicative here, but the idea is to get the ROI and the ROAS on your side. Remember that social media is just like any other sales/marketing activity and hence must add to your profit margins. There are no free lunches
Data Based Spending Changes
Always remember that the key advantage that social media has over traditional marketing and sales channels is the fact that everything about it is measurable and traceable. Social Media is more pull and less push. So it will be proper and prudent to have a well-configured and featured reporting tool running key data collection on an ongoing basis. This data should then be the feeding point for regular spending and execution reviews. Every aspect of the data should be analyzed to see what yields better results and what doesn’t. It then follows logically that you should look at increasing spend on activities that are yielding better results in terms of conversions and cut down spending on activities that are not performing well in the area of conversions. Everything from call to actions to the type of content being generated or shared should be subjected to this data based analysis and decisions should be taken based upon what the data dictates. That way, your budget will be in line with the end goal to generate business at all times. This analysis should be an ongoing activity and done diligently and objectively.
Congruence With Marketing Spend
While it is all well and good to think of social media spending as a part of or a feature of your product or service, it will serve you well to remember that at the end of the day, social media marketing is not a silo and falls under the broader ambit of the overall marketing umbrella. And this means that social media spends have to be congruent and guided by the overall direction that marketing spend is taking. This will mean that it has to subsist with the more traditional marketing channels and activities and not shoot off on a tangent because the medium is digital and measuring is easier. The synergy between various arms of marketing when it comes to spending will keep the overall product spends in a healthy trend
So these are a few factors that will help you to budget your social media spend correctly. What are the other things that you think makes sense to add here? Let me know!