Jul 06 Social Media Management Pricing; Considerations for Setting Your Budget
Understanding social media management pricing and costs isn’t easy. These items drastically vary across the industry depending on what services you’re looking for and what level of expertise you’re intending to hire.
That said, it’s essential that your brand sets your budget before going into any kind of agency search. Too often do we hear the response, “We’d like you to recommend a budget” when speaking with prospective clients, which doesn’t set either party up for success. Especially if you’re getting bids from multiple agencies, your projected costs are going to be all over the place. Having a set budget will help you focus more on the details when your bids come in.
So then, what should your brand set aside for social media management? We put together the following exercise to guide you through the pricing process.
Step One: Determine Your Primary Goals for Social Media
Now, everyone is going to read step one and think, “ROI… I want social media to generate sales.” This certainly makes sense, but when it comes to social media it isn’t always so easy to measure your ROI. So use this exercise to think about who your brand is and what you think social media can feasibly accomplish for you. Do you want more brand awareness and to find new audiences, or perhaps turn your channels into an open line of communication with your customers and community? Focusing on these goals will help lead to you answer the next step…
Step Two: Determine What Social Media Marketing Services You Need
Social media is more than just posting to a Facebook page. There are multiple areas of focus that require a different skill set if you want them to be properly executed and drive meaningful results.
One item that’s constantly overlooked is the social media strategy. At a high level, your strategy sets the groundwork for how your social media channels will operate and determines what tactics will help drive to your goals.
When it comes to budgeting this line item, keep in mind that a strategy isn’t something one person can whip up in a couple of hours. Within our agency, the strategy process can take 6-8+ weeks and requires a team of several people. As you can imagine, those costs add up with our strategies starting at $15,000+.
For some, it’s smart to begin with just the strategy, as it will help pave the way for what other social media services you may need. Here’s a high-level breakdown of what those services could include and how much those items could cost:
- Community Management: Community managers are there to engage potential and current customers, brand advocates, media, and other interested audiences. They’re a one-stop-shop for creating lively and engaged social media communities through editorial planning, monitoring, and moderation of social content. CM costs can drastically vary depending on how many channels you have, the volume of content that needs to be posted, and the volume of required engagement on those channels. You can start low if you only have minimal needs, but expect to set aside as much as $3,000-$10,000/month.
- Content Development: The development of social media content is another asset that is typically misunderstood when it comes to pricing. It’s important to think not only about how much content needs to be created but where is that content coming from? Stock photography can only go so far, and custom photography and videography means you’ll need to increase funding. Additionally, assets then need to be customized for each channel they’re intended for. So if you’re looking for high-quality visuals, expect costs to range from $5,000-$15,000/month.
- Paid Social Media Advertising: Social media ad buying is different than any other ad buying in that quality content is demonstrably more cost-effective to promote. Media strategists and media buyers pair careful audience targeting with real-time optimization to provide the best results. When it comes to budgeting, not only do you need to consider how much you want to spend on ads, but also the management fees of those executing the work. At Ignite, we run paid budgets that start at $3,000+/month.
- Promotions and Giveaways: The nice thing about promotions is that they’re typically not part of an ongoing cost, but they do require a decent investment depending on what the promotion is (sweepstakes or giveaway or something else entirely), the complexity of it, and the level of moderation required. Be ready to spend anywhere from $5,000+ per program.
- Influencer Marketing: Influencer marketing budgets have been on the rise for the past two years as the industry has evolved. It’s important to consider what your objective is, as well as what types of social media influencers you want to engage with (and how many). Our sister company, Carusele, runs influencer marketing programs that begin at $20,000, but the average program runs at a $50,000-70,000 all up investment. The costs include influencer fees, management fees, and paid media fees all in one single rate.
- Reporting and Analytics: Analysts do more than report on KPIs. They set goals and deliver custom-designed reports that help you see what’s needed to meet those goals. They also work to develop social media ROI measurement models for brands with vastly different business models. Because of this, we recommend a monthly budget of at least $3,000.
- Ongoing Strategic Consulting: For those who have internal teams executing your social media efforts (see more about internal teams below) consultants will provide ongoing strategic direction, inform you about the latest changes in the space, and ultimately keep you accountable to your social media strategy. You can expect this to be a monthly fee that ranges anywhere from $500-2,000/month.
Step Three: Determine Who You Want to Execute the Work
Now that you understand what items you need to invest in, you’ll need to evaluate who you want to execute the work. Should you hire a generalist internally, or a freelancer? Do you outsource to an agency, and if so, to what type (since almost everyone offers social media these days)? Depending on how you answer those questions will determine what level of investment will need to be made.
Internal Hire Considerations: Whether you want just one person to do the job or to hire a team, be prepared to budget for an annual salary that’s going to be more than an entry-level rate. Add to that the associated costs with employees, such as insurance, equipment, and overhead and you could be looking at a large sum for a single person’s work.
Agency Hire Considerations: As previously mentioned, there are lots of agencies that offer social media marketing services. Everyone from PR firms to traditional advertising agencies has added social to the mix over the past few years. However, if you’re thinking that social media marketing could be a major revenue stream for your business, you may want to consider an agency that focuses solely on social media marketing.
Perhaps that agency has say, 13+ years of experience with an excellent track record of working with brands like yours. They could also have numerous awards for their client work and provide each client with a dedicated team of experts in each division of social. Hold on… I think I’m describing Ignite Social Media. Yupp, I am. Well, we can check the shameless plug off the checklist now…
Back to our discussion on social media management pricing. If you’re considering hiring an agency partner you’ll likely still have to carve out a decent-sized budget to accommodate the various activities that social requires. In addition to the work they’ll be doing for your brand, agencies also need to include management fees, tool costs, and more. If you take a look at the previous section and add up the minimums for all of the ongoing work, you can see that agency costs can easily add up to $15,000+ a month.
Step Four: Look for a Working Relationship that Best Suits Your Organization
As many of us know, there’s isn’t a one-size-fits-all model for social media marketing. Some organizations need only a little help, some need to off-load all the heavy lifting, and some are smack-dab in the middle. Your strategy should ultimately lead you to understanding which systems you need, but how you develop that model is up to you. Here are a few different models to consider that we currently pursue with our clients.
The Full-Service Model: For those who need to outsource everything and anything social media, consider hiring an agency to execute all aspects of social as your ultimate goal. While it takes the heavy lifting off of your shoulders, you can sit back and relax knowing that all the cogs are moving. Additionally, your agency should be arming you with weekly, monthly, or quarterly reports that show you how things are tracking to goal — something your boss will certainly be interested in. The only catch here again is that you’ll need to carve out that $15,000+/month budget we previously mentioned.
The A-la-Carte Service Model: When your internal teams are executing certain aspects of the work (or other agencies) you may only need assistance with one or two social media services. Talk with your agencies to see if you’re required to invest in all their services, or if they provide scopes of work that allow you to chose only those you need. This can certainly cut down some of the costs of outsourcing.
The Content That Converts Model: In 2018 our agency rolled out a new service that brings social media content and paid media together to drive audiences through the customer journey. It can run side-by-side with your ongoing social media efforts, but ultimately takes the time to test variations of content and paid together to find the solutions that drive the best results for your brand. This type of program starts at $10,000/month (including media) and can be up and running in as little as three weeks.
As we mentioned at the beginning of this piece, understanding social media management pricing and costs aren’t easy, but this is an important exercise to conduct before you move forward with hiring anyone to execute the work. If you’re actively searching for an agency partner, we invite you to contact us today using the form below.