Setting B2B Social Media Budgets & Measuring B2B Social Media ROI

How much should I budget for B2B social media marketing?

There’s no one budget formula for social media marketing. Naturally large marketing organizations have more buckets to consider than teams of one.

Here are a few things you should keep in mind to set a B2B social media marketing budget:

1. Percent of Annual Sales Formula

To determine their ceiling for marketing spend, most companies start with a percentage of their expected revenue. To follow this formula, start by taking a ~5-30% of your desired gross revenue goal and set it aside for marketing.

According to the 2019 CMO Survey, the average B2B firm allocates just under ~9% of their revenue on marketing budgets. Meanwhile, Gartner’s 2019 CMO survey notes 67% of B2B firms expect their budgets to rise in 2020.

Now, how much should you budget for social?

Take 10-25% of your total marketing budget and allocate it to social media marketing.

For example, if you forecasted sales of $10,000,000 in 2020 and assigned 10% to marketing you would have a budget pool of $1,000,000 for marketing / advertising expenses. That would leave $100,000 – $250,000 for social media, or ~$8,000 – $20,000/mo.

2. B2B Social Media Expense Breakdown

Consider how your marketing budget will break down between the core social media expense categories:

• In-house team members: Part and full-time employees dedicated to social media channels. For instance, one social media manager + half of a graphic designer’s time (shared resource) = 1.5 FTE salaries.

• Outsourced work: Agency and freelance team members dedicated to social media activities like content creation, community management, and paid media.

• Paid media expenses: Total ad spend from social media channels like LinkedIn, Instagram, Facebook, and Twitter.

• Tools and Technology: Software dedicated to managing and measuring social media marketing. This tech completes functions like scheduling, monitoring and listening, ad buying, and reporting & analytics.

Gartner’s 2019 survey found the average marketing resource allocation to be:

• 22% on agency fees

• 26% on marketing technology

• 26% on media

• 25% on labour

3. Programs & Campaigns

Social media marketing budgets are often easier to understand on a project or initiative basis.

In that case, group related activities together and assign a budget as needed. For instance, an event activation.

Within short and long-term campaigns you can allocate the budget further into individual channels and programs.

Some strategists recommend a 60/40 split of campaign budgets with 60% towards brand building activities like community management, content creation and publishing, and paid amplification. Then 40% to sales activation activities like influencer marketing, retargeting ads, and direct-response ads.

4. Social Media Recruitment & Other Activities

Using social media to attract talent? Consider a top-down approach with a percentage of your total recruitment budget allocated towards social media programs. From there, decide how to divvy up that spend allowance. There are several areas to look at:

• Content creation: Determine what kinds of graphics, images, or videos you plan to use in your campaign. Eager to showcase your awesome office space with the amazing view? High quality photos are a cost-effective way to do that. Looking to highlight a fun company culture? It might be worth the extra expense of video production to capture that. Think about which medium would best serve the needs of your campaign and budget accordingly.

• Paid promotion: Unless you already have a large, engaged organic following, you’re more likely to reach your target audience—in this case, talented, qualified applicants—with paid social. Decide how much of your recruitment budget you can designate to ad spend.

• Outsourcing: You can also choose to delegate the recruitment process to a third party. If so, you’ll need to budget for the total cost of outsourcing your campaign efforts to a social media management agency.

What are the best ways to measure ROI from social media marketing?

Let’s get something straight: True ‘ROI’ is a measurement of dollars gained or lost.

You may consider marketing-specific measurements as a gain, but you’ll have a hard time selling it to the C-suite.

That’s why ROI is easiest to measure in the form of an individual channel or campaign (versus the totality of your efforts).

Thanks to tracking pixels and powerful CRM software, success can be attributed to leads that originated on social media, or conversions assisted by social media. Analytics software can be used to analyze which social media channels your visitors came from, what they did once they landed on your webpage, and the actions they took after completing a form.

Let’s say you invested $10,000 total on a paid media campaign leveraging LinkedIn and Facebook ads for a new product launch. You reached 100,000 professionals, drove 2,000 people to your landing pages, and collected 50 emails (MQLs).

So what was the ROI?

There are several possible answers.

• ROI – short-term: Those leads are now known prospects moving through your sales funnel. In 3 months, if 10% of those 50 leads convert into closed deals with a customer lifetime value of $10,000, you stand to generate ~$50,000 from the campaign. ROI = $50,000 – 10,000 / (10,000) = 400% projected ROI.

• ROI – long-term: After 6 months, or 12 months, how many additional campaign leads have converted? What was the expected value of those deals? That’s when things get interesting. 🙂

• Indirect ROI: What is the ‘value’ of a page visit? How does the CPM for this channel compare to another channel? What other social or conversion actions can you attribute to the campaign (like saves, engagement, or downloads)?

Measuring the total reach, the size of the engaged (retargeting) audience built, or the attributed brand lift will only give you a proxy for success, but still extremely valuable to measure and report.