How much should you spend on social media depends on a few things, you should consider the type of product / service you are offering and how likely this is to engage with customers online. Typically, B2C businesses should spend significantly more than B2B type businesses.
1. What it is you’re trying to achieve
Consider whether this is a branding exercise or whether you have a specific call to action / outcome you’re trying to achieve. Branding is often a cheaper exercise.
2. What industry you’re in and how competitive it is
As a general rule of thumb, the more competitive the industry, the more you need to spend to get cut-through to your target market. If you consider the real estate market, agents are paying upwards of $30 per click on Google Advertising. If you’re to stay competitive and play in this space you need to do one of two things – be prepared to pay $30 per click or be creative and look for key words / target markets that bigger advertisers have not selected.
We have been quite successful in being able to get click through rates spending less than 30% of competitors.
3. You’re overall marketing budget
You’re social media budget should form part of your online marketing budget which in turn forms part of your total marketing & advertising budget. As a general rule, we believe approximately 30% of your total budget should be ‘online’ with 5% of the overall budget being allocated to social media. Again, this depends on the industry and product / service being offered.