Obviously, answering this question with a one-size-fits-all solution is impossible because it depends on the type of campaign and, above all, the goals you want to achieve.

Let’s take a look at the criteria you should follow and apply when defining the budget for your digital strategy to ensure a safe return on your investment.

1. Proportionate budget to revenue

To determine your company’s marketing budget, consider investing between 5% and 15% of annual turnover, with a recommended average of 10%.
This percentage can be a useful benchmark for determining how much to allocate to digital marketing, including investments in paid social media campaigns.

Social media campaigns are a popular choice to increase sales due to the large reachable audience. However, there is no one-size-fits-all formula; it is essential to manage campaigns within the planned budget and adapting to the specific needs of the company.

2. Choose the social channel most suitable for you

Identify the social channel on which to invest most of your budget by choosing it based on your target audience and objectives.

Reflect on the ‘culture’ of each platform to understand which social network best aligns with your goals to achieve the best results. By analyzing these differences, you can decide where to focus your efforts to maximize the effectiveness of your campaign.

3. Define and Analyses Your Social Media Goals

Every company has different social media goals, such as increasing sales, lead generation, conversion rates, improving brand image, collecting reviews or getting feedback.

To measure the success of campaigns, it is important to clearly define these goals using the SMART method (Specific, Measurable, Achievable, Relevant, Timed).

Instead of focusing only on financial ROI, evaluate results based on the behavior of your audience, such as increased followers and engagement (likes, comments, shares). This approach will allow you to optimize your strategies and achieve your goals more effectively.

4. Product life cycle

When defining your marketing strategy, consider the life cycle of your product. The budget will vary depending on whether the product is in the growth, maturity or decline phase. For example, simply following the logic if you are launching a new product, you will have to invest more than the already established flagship product.

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5. Analyze the market

Before defining your marketing strategy, carry out a thorough market analysis. Evaluate whether you sell only in Italy or also abroad, identify the international markets present and consider the variations in ad costs (they can vary from country to country), especially on platforms such as Facebook and LinkedIn.

Another factor that can affect ad costs is seasonality (e.g. costs will be higher during Christmas and Black Friday).
Make sure to carefully consider the target market and its characteristics in financial planning for effective resource management.

6. Analyzing competitors

In order to plan an effective social media strategy for your company, it is essential to identify and analyze what your competitors are doing, such as how often they post, the type of advertisements they run, and their content.

This analysis will help you choose the right social networks and plan appropriate ads. For example, on Facebook, you can see the active advertisements on the ‘Information and advertisements’ tab on company pages. This gives you valuable information about their campaigns, such as image format and copy length.

This competitor analysis is crucial for optimizing your marketing budget and maximizing the success of your social media campaigns.

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7. Planning

Once you have gathered all the information you may need, you can move on to the planning phase. This phase is crucial for the success of your campaigns as, by defining clear objectives, you will be able to evaluate and adapt your strategies as needed.

8. Define a spending ceiling

Set a spending limit as a first step to make sure you don’t spend more than you set yourself.
On platforms such as Facebook and Instagram for example, you can set a spending limit either for individual campaigns or for the account as a whole.

We would like to give you one last piece of advice: we are of the opinion that every company, large or small, should have an effective social media strategy. So if you think you don’t have enough time to invest in this process, turn to a social media marketing agency. As luck would have it, we might know of one that could be right for you. That’s us!