What should you budget for social media in 2023?
“Most marketing budgets are prioritizing social media” - Insider Intelligence
Good news friends… social media? It’s not going anywhere. The digital age is here, and though it seems the world has opened back up again post-COVID, remote work remains on the rise, online shopping is still the preferred method and people are enjoying more time at home than in years before. In short, billboards and radio ads continue to be less relevant than they once were, and people continue to show signs that they prefer to consume information digitally. Via social media.
How do you reach them? Ding ding ding, their technology.
In 2023, experts predict that the percentage of social media will continue to take up more of marketing budgets. During the pandemic, social media exploded as it was the fastest way to get the word out to consumers. And though that growth is slowing, it’s still on a steady increase.
With budget season upon us, that begs the question… what should you budget for social media marketing in the coming year?
First, let’s talk about inflation. Both Canada and the US are predicting a GDP growth rate of 0.6 and 0.5, respectively, for 2023 and inflation continues to rise. Not so great, but what can you do during times like these? The answer: build your brand.
According to Insider Intelligence, “over a quarter (26.8%) of US CMOs said that inflationary pressures have caused them to make stronger brand-building investments, per a survey conducted by Deloitte and the American Marketing Association (AMA).” There is no better time than to focus on building a trustworthy and well-known brand because, though there is less disposable income, people are still spending - they are just choosing carefully.
Second, video marketing is blowing up! Experts predict that the average time US consumers spend on digital video will go from 161 to 172 minutes within two years. Meta and TikTok are investing in improving their ad offerings and e-commerce capabilities. And where does video content perform best? You guessed it–on social media.
Let’s get more specific. There are a few factors to consider, but in general, your marketing budget should be anywhere between 5-15% of your revenue; on the higher end for B2C companies, and the lower end for B2B. Of that, approximately 20% of marketing budgets goes towards social, at least for retail companies, says this 2019 CMO Survey.
Now, how much of that budget should go toward social media? That will vary greatly from business to business, primarily answered by how many of your customers are likely to use social media to interact with you. And then you have to consider the realities of what it costs. Social media is a long game and can be rather time-consuming when done well, from building thoughtful strategies, to carefully considered tactics and overall execution.
And time is money.
A mid-size social media agency in 2023 typically costs $2500 to $6000 per month, or $30,000 to $72,000 per year. This will range depending on package inclusions, i.e. the number of platforms, the number of ad campaigns, content creation, community management, influencer marketing, and more! Cheaper than hiring an in-house resource, but still a significant cost worth including in your budget.
Can you skimp on social and get by just using your intern? Sure, you can. But consider that social media is in many cases responsible for making your first impression with potential customers, for nurturing them and educating them as they move through the buyer's journey, for fostering relationships with current and repeat customers, and sometimes even for making the sale. Can you trust your intern with all of this?
Our advice: Start with a Social Media Audit and Strategy. This will allow you to see what’s working for you and what’s not, what your competitors are up to, and most importantly, what you SHOULD be doing to drive the most results. From there you’ll have a good sense of what your priorities should be which will then dictate what your overall spend should be. Book yours today to kick off the new year right!