Are you a business that allocates a monthly budget to social media strategies? Do you question the effectiveness and investment of your social media strategies? Lets examine this in more detail.
What are your goals
It's important to define your business goals as they will have an impact on the percentage of your marketing budget used towards your social media strategy. Social networking should not be managed outside of your marketing strategy. You'll be able to define your social media budget based on your business goals and your overall marketing budget.
Each business is unique with specific needs. Marketing budgets depend on your organizational marketing needs. According to a recent survey conducted by BDC, the larger the business, the higher the average budget for sales and marketing activities. Companies with 20 to 49 employees invest on average $64,000 in marketing and sales. For businesses with 50 or more employees, this budget is $103,000.
Marketing professionals in the U.S suggest investing 10% of your annual turnover investment on the marketing department.
However, if you're trying to market your brand, that percentage needs to be increased to create the desired "wow" effect.
Research has shown that companies earning more than 25 million in annual turnover spend on average 9% on marketing while those who earn less than 25 million spend generally 11% of their revenue on marketing.
Here are budget variations that apply to B2C and B2B companies:
- 10.6% for product companies in B2B
- 10.1% for service companies in B2B
- 16.3% for B2C product companies
- 10.9% for B2C service companies
Most point towards the magic figure of 10%!
What about the social media budget?
The percentage distributed to social media is relative to your overall strategy, your target audience and your digital history. If your target audience is not active on social networks, there is no point in investing a high amount. This is why it is important to know your audience.
According to a research carried out by the firm Ipsos Connect, marketing experts confirmed that the social channel is growing strongly. If we compare 2014 to 2015, budgets for social networks has increased by 72%.
According to Duke University's Fuqua School of Business, US companies spend 9.4% of their marketing budget on social networks - a percentage expected to increase next year to 13.2%.
Note: Although these studies are American and do not necessarily reflect the reality of Quebec, they are good general indicators of the trends within the Canadian social media industry.
Have you noticed that the percentage of your budget designated for social networks has increased within your company?