How does your social media budget compare with other small businesses?
If you’re like 5% of the small businesses that have a social media strategy, then you have a social media budget over $100,000 annually.
But what if you’re not part of the $100K club for social media budgets? Well, the fact is, most of your peers that are using social media have much lower budgets. The median budget for social media among those small businesses is far smaller – between $1,000 and $2,499 per year, as this week’s chart demonstrates:
The data is from the 2012 Small and Medium Social Business Study conducted by the SMB Group in mid-2012. That study surveyed small businesses with under 100 employees. The numbers do NOT include the cost of internal staff, although the numbers DO include outside consultants. The data covers just those small businesses that already use social media.
- If you operate or work in a small business, this shows what your peers are budgeting for social media. As you can see, aside from internal staffing costs, social media need not cost a lot out of pocket, especially at the start. The median external expense is under $2,500 annually (around $200 a month or less). Most small businesses can afford that. Perhaps the biggest challenge will be to allocate staff internally, as the staffing costs are not captured here — and social media is time-consuming to carry out. Also, be sure to first develop a social strategy to avoid disappointment and waste. It’s not bad to spend — just bad to spend unwisely.
- For consultants, marketing agencies and technology companies, consider that small business budgets are all over the ballpark. Some appear willing to spend freely (even without a strategy!) yet others do not. That suggests you should offer a variety of different price points, starting with free limited offerings, and offering a migration path up to higher-priced, more full-featured offerings. As small businesses see wins from free advice and or low-cost tools, the smart ones will be more inclined to invest in higher-level solutions and consulting to drive better results. “Help small businesses develop a social media strategy driven by their business goals to get value from social media,” adds Sanjeev Aggarwal of the SMB Group.
More in: Chart of the Week
Great post, Anita. I find it shocking as well that so many small businesses will blindly spend money on social media without devising a strategy first. With any kind of marketing that you’re investing money into, it’s important to know your ROI so you can gauge it’s effectiveness. Ask yourself, how do I know if I can scale up? Do I need to scale down? Being strategic in your plan of action saves thousands.
Anita: Thanks for pointing out this opportunity for us involved in social media education! 🙂 Thank you very much for the advice to offer different price points. I am working on compiling different kind of social media packages and services.
I have offered free advice for a long time, due to the fact that I have acted according to the BNI motto, “giver’s gain.” The thing is that it shouldn’t end up as “giver’s pain.” 😉 That is why I got the book, No, You Can’t Pick My Brain by Adrienne Graham. I have written a blog post on the value of my services and how it could be measured in an objective standard of money (silver). I say this to my potential clients that this is my standard rate and that it will fluctuate depending on the silver price. I want to make a point that a price shouldn’t be picked in a random way and it should be related to a value that you exchange between two parties.
It will be interesting to see if small businesses will allocate more time, money and energy to social media activities in the future. I am out here to help! 🙂
I was just thinking how the 100k club companies are leveraging social media with 100K budget.
At this point we feel more comfortable allocating spend towards PPC and other forms of advertising where our ROI is easier to observe.
Thanks Lori for the reply.
@Lori – an accountable social media marketing strategy will have more observable data than a regular PpC.
Those small businesses – especially local ones – who are utilizing a social media strategy as part of their marketing plan are WAY above the competition.
By the way – can it still be classified as a small business if it’s spending 100K on social media alone?
These are some interesting statistics, but not at all surprising… What’s especially telling is how many businesses are just spending time and money on social media on an ad hoc basis with no official budget allocated. Imagine using that same approach for hiring or on marketing materials? Why should social media be any different from any other business process?
Social media is attractive to so many businesses looking to sell more, serve better, and market further because it’s basically free. It becomes costly when you waste time and resources on social media without the tools and software to make it efficient.