How to set your social media budget
If you ever find yourself staring at a blank spreadsheet, having no clue how much of your budget to allocate to social media advertising, then this article is for you. The short answer is that there is no one-size-fits-all solution for everyone. While that might not be the answer you were hoping for, there are strategies to help you decide how much money you should put behind your social media creative. And how to allocate that money.
Boosting vs. Advertising
First, let’s clarify the difference between boosting and advertising. Both are methods to promote content on social media, but they serve very different purposes.
Boosting: This straightforward approach increases the visibility of a specific post. It’s ideal for promoting single posts or events with minimal setup. For example, if you notice a post performing well on Instagram, you can quickly boost it to reach a wider audience.
Advertising: This involves more complex campaigns with various formats and objectives. Advertising allows for detailed targeting and is typically used for broader marketing goals, such as generating leads or sales. Additionally, it provides detailed performance reports that can inform future strategies.
Data is Your Friend
Data is essential when setting your social media budgets. While reviewing data can feel daunting, it's crucial for understanding how much to invest. Social media platforms encourage spending, but if you're not seeing a return on investment (ROI), it’s time to dig deeper.
Start by reviewing past performance reports that are available on your business accounts. Look for insights on which audiences engaged most with your content, including demographics, locations, and types of creative that performed best (e.g., reels, carousels, static posts, stories), and then allow these insights to help inform your strategy.
Steps to Determine Your Ad Budget
When determining your ad budget, follow these six steps:
1. Campaign Objective
What’s your mission? Are you aiming for maximum visibility, user engagement, or converting viewers into customers? Platforms like Meta offer six key campaign objectives:
- Awareness: Maximize brand awareness and reach (this can increase impressions but may yield low engagement).
- Traffic: Drive users to your website.
- Engagement: Encourage video views and interactions.
- Leads: Focus on lead generation and conversions.
- App Promotion: Promote downloads and usage of your app.
- Sales: Directly link to your catalog to boost product conversions.
2. Targeting
Knowing your audience is crucial for determining your media spend budget. Establish where your target audience is located, their age, gender, interests and behaviors. Once you’ve implemented this information, Meta will tell you your potential audience reach.
3. Analyze
Once you’ve established your campaign goal and audience, analyze past ad performances. Look for trends in engagement, clicks, and conversions to inform your current strategy. Remember: Data is your friend. Maybe even your best friend.
4. A/B Testing
A/B testing is an effective way to gain insights into ad performance. Test different creative approaches with various audiences or use the same creative across different regions. Allocate 5-10% of your overall social media budget for A/B testing to help gather relevant data to inform your future ads (e.g., $50 for Test A, $50 for Test B). Run tests for a week and review results to identify what works best. Starting small helps you pinpoint which ads to scale.
5. Give it TIME
The algorithm needs time to optimize who sees your ads. For effective testing, run your ads for at least one week with a minimum spend of $6 per day. After this period, assess traction and decide whether to extend or pause the campaign.
6. Monitor
Weekly check-ins on your ad performance are essential. If you notice a month-long campaign tanking by week two, reassess your strategy. Or, if you see strong results, consider increasing the budget. Keeping your ads dynamic is key, especially if they’re gaining traction. Most social platforms will flag your ad if it’s reaching ‘creative fatigue’ letting you know it’s time to switch up your creative, or expand your audience reach.
Timing Matters
Remember that running ads during peak seasonal dates can significantly affect performance. You’re competing for ad space, so plan your content calendar wisely. Avoid launching ads solely during major holidays and events (like Black Friday or Christmas) and consider leaving room for campaigns during lower traffic seasons, as this can help increase overall success.
Conclusion
Determining how much to spend on social media advertising isn’t always simple. The industry standard is to spend 15%-30% of your marketing budget on social media advertising. By understanding your campaign objectives, knowing your audience, analyzing past performances, A/B testing, allowing time for optimization, and closely monitoring your ads, you can make informed decisions that align with your budget and goals. With the right approach, you’ll not only find a budget that works for you but also maximize your ROI on social media advertising. And as always, feel free to reach out with any questions.
