Marketing budgeting can be tricky to say the least. There are simply no hard and fast rules when it comes to determining how much money you should devote to your advertising efforts. And budgeting decisions become even more difficult when you begin to divide that budget into various components of traditional and digital marketing outreach. In particular, business leaders and marketers in the modern environment face significant challenges when trying to determine the ideal social media advertising budget.
Of course, you will only find success in your specific field of business and marketing sector if you are able to keep up with your competitors. This fact holds as true for social media marketing as it does for every other aspect of business operations.
Like other respected digital marketing agencies, Hawke Media stresses the supreme importance of using social media to build your company brand. However, there is no “one size fits all” solution when it comes to creating and running an effective social media advertising campaign. In fact, the focus of your social media outreach and your specific paid social media advertising strategies will depend on a large number of factors including your company goals, your target consumers, and the specific industry in which you operate.
Indeed, digital and social media marketing strategy and spend varies substantially from industry to industry. To get a full picture of social media marketing budgeting today, it is helpful to begin by looking at the two broad categories of business industries.
For very good reasons, marketers tend to divide companies into two broad categories: business-to-business (B2B) and direct-to-consumer (D2C). The marketing demands of these two business models vary considerably in terms of needs, goals, approach, and budgeting.
To begin with, the overall marketing budget of a B2B company is almost always less than the budgets of similarly sized companies in the D2C sector. While the average D2C company spends just under 14% of its overall budget on marketing, the average B2B company spends just under 7%. This means the average B2B company spends roughly half of what the average D2C company spends on marketing.
Marketers agree that the ideal B2B marketing spend depends on where your particular company falls in its overall evolution and lifespan.Established companies may be perfectly suited to baseline marketing spend of 7%, but new companies seeking rapid growth may want to devote as much as 20% of their gross revenue to marketing.
Formulas for calculating how much your B2B company should budget for social media marketing are similarly complex and dependent on situational limitations and final objectives. However,a good rule of thumb is to allocate roughly 10% to 25% of your total marketing budget for outreach on social media.
The basic reason for dedicating such a healthy portion of your marketing spend to social media is quite simple: social media is where modern people tend to congregate. With a realistic social media advertising budget, you’ll not only be able to reach your target audience directly but drive them directly to your company website through an effective digital marketing funnel.
As previously noted, the overall marketing spend for companies in the D2C sector is substantially greater than that of companies in the B2B sector. But exactly how much of this overall D2C marketing spend are companies allocating for social media marketing specifically?
Even more than B2B companies, D2C companies have incredible opportunities to target the very social media users who are most likely to purchase and use the specific products and services that they offer. As the popularity and ubiquity of social media continues to grow, so too does the social media marketing budget of the average D2C company.
According to the CMO Survey, which tracks social media budgeting among businesses, overall social media advertising spending was 11.7% in 2016. This figure represents a threefold increase since 2009.
In recent years, social media marketing spend has only continued to grow, particularly in the D2C sector. According to the 2022 CMO Survey, the average company now spends 15.4% on social media advertising. This figure is likely even higher for many industries in the D2C sector. Although extremely recent industry specific social media spending figures aren’t widely available, CMO reported that D2C retail businesses will typically spend roughly 20% of their total marketing expenditure on social media spending in 2022.
Social Media Advertising Budget for Specific D2C Industries
When it comes to reaching out to individual customers on social media, no industry has traditionally been more thorough than the entertainment industry. In a 2105 study of Facebook posts, the entertainment industry accounted for 63.2% of all posts. Paling by comparison, the retail industry had the second largest share with a paltry 12.4%.
Although the entertainment industry of today continues to have a massive social media outreach, the retail industry has since eclipsed it in terms of overall social media spending. Here are just a few of the top industry spenders when it comes to overall digital ad spending in the United States according to the authority eMarketer.
Spending a total of $23.5 billion on digital ads annually according to the most recent available statistics, retail companies spend more than any other industry. According to eMarketer Senior Analyst Patricia Orsini this has everything to do with search engine optimization (SEO) “If you’re a retailer,” she says, “you want to make sure that your store, ecommerce site, or page within Amazon, pops up in Google’s search results.”
In recent years, the auto industry has grown by leaps and bounds when it comes to its digital advertising budget. In addition to their status as the second biggest spenders in the digital marketing sector overall, US automakers are at the vanguard of spending on ads for mobile devices, commanding 12.6% of the market in 2019.
As previously discussed, show business accounts for an outsized proportion of spending in both the social media and general digital media marketing arenas. When combined with news and general media spending, it stands between the retail and automotive sectors in terms of total digital advertising budgeting with a 2019 spend of $14.53.