How Much Does Social Media Marketing Cost? – Socialistics | A B2B Seattle Social Media Agency

How Much Does Social Media Marketing Cost?

November 19, 2019 by Jason Yormark

Ah, social media. Right now, millions of people around
the world are retweeting, pinning, posting, ‘gramming, and liking. In fact,
there are 2.89
billion active social media users worldwide.

It’s no wonder, then, that websites like Facebook
and Twitter have become powerful marketing weapons. Companies like yours use
these platforms to target clients, move prospects through sales and marketing
pipelines, and increase revenue. 

Let’s face it, social media is the most powerful marketing method today.

But how much should you really spend on social media? How
much should you negotiate when you contact an agency? By the end of this post,
you’re going to find out the truth about social media marketing cost.

Before we can answer this question, though, we need to
find out how much organizations spend on marketing as a whole… 

How Much Do
Organizations Spend on Marketing?

This is the million-dollar question. The truth is, it all

Generally, marketing spend depends on various factors:

The most authoritative source on this topic is probably
research undertaken by Growth
Marketing Stage (GMS). They gathered a wide range of insights into
marketing budgets, trends, and the effectiveness of marketing channels.

Perhaps the most interesting insight was the correlation
between marketing spend and the size of a company. Interestingly, the bigger
the company, the less they spend on marketing.

This might make sense to you. After all, a huge
international company like McDonald’s or Coca-Cola has global name recognition
and a loyal customer base. They might choose to spend less money on marketing
than a startup. 

Research from GMS reveals that:

So, at this point, you’re probably thinking something like

“I run a company with 1-20 employees. I should
allocate 25 percent of revenue to my marketing budget.”

“I work for a company with more than 1,000 employees.
We should allocate 7 percent of revenue to our marketing budget.”

It doesn’t really work like this, and you’re going to see

Taking into Account
Industry Sector and Marketing Type

A one-size-fits-all approach to marketing budgets won’t
work. There are too many variables. Take different industry sectors, for

The research from GMS found the following:

As you can see, the amount of money allocated to marketing
budgets depends on the industry, as much as the size of a company. 

What about the type of marketing? This plays a huge role
in determining marketing budgets, too.

The research from GMS found that organizations spend:

These are just the top four. GMS has broken down marketing
budgets based on different marketing budgets in far more detail. 

One important point to note here, though, is that
organizations spend, on average, 17
of their marketing budgets on content marketing and social media
combined. These two marketing methods are closely linked, so when you combine
them together, you can see just how much organizations are spending on

In fact, organizations spend nearly one-fifth of their
marketing budgets on content marketing and social media.

Why Combine Content
Marketing and Social Media Marketing Spend?

Research from GMS reveals that companies allocate 8
percent of their budgets to social
media marketing alone. This is less than trade shows and PPC, for example,
but it doesn’t really paint the whole picture. 

Few companies just have a social media marketing strategy.
They will spend money on content marketing, too. This is why it’s important to
consider both of these marketing methods when negotiating social media marketing
cost with an agency. 

Why is Content
Marketing and Social Media Spend Important?

Content marketing and social media are two of the most
important components of digital marketing. Research has shown, time and time
again, that these two methods could provide you with a significant return on
your marketing spend investment.  

In a separate study, a huge 72 percent of marketers say
that content
marketing increases engagement. Plus, 72 percent say content marketing
increases leads. 

Then there’s social media. Most adults aged 18-34 follow
at least one brand via a social network, while 71 percent of consumers who
have a good experience with a brand on social media are likely to recommend
that company to other people. 

How Much Should You
Spend on Social Media and Content Marketing?

Taking into account all of the above, let’s try and settle
this for good.

Say a company makes $500,000 in revenue a year and employs
10 people. According to research from GMS, we can assume the company will
allocate 25 percent of revenue to marketing (500k/25=125k). Again, according to
GMS research, a company of this size will spend 17 percent of their marketing
budget on social media and content marketing. This amounts to $21,250. Let’s
round it down to $20,000.

So, a company making $500,000 a year in
revenue and employs 10 people will spend around $20,000 a year on social media
and content marketing.

(This doesn’t take into account the industry sector, which
can also impact marketing spend.)

Here’s another example:

Say a retail company makes $500,000 a year in revenue.
According to GMS research, retail companies allocate 35 percent of revenue to
marketing. This amounts to $175,000. We know that, on average, companies spend
17 percent of their marketing budget on content and social media marketing.
This amounts to $29,750. Let’s round it up to $30,000.

So, a retail company that makes $500,000 a
year in revenue will spend around $30,000 on content and social media

(This doesn’t take into account the number of employees,
which can also impact marketing spend.)

The Bottom Line

For most small companies, spending between $20,000-30,000
on social media and content marketing sounds about right. However, the exact
amount you spend will depend on your company’s budget, goals, and individual

You should remember these numbers, however, when you contact a social media agency. Then, you can negotiate a good social media marketing cost that will provide you with a return on your investment. 

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