How to Determine a Social Media Advertising Budget
Setting the right social media advertising budget can feel overwhelming especially when every platform, expert, and competitor seems to do it differently. But the truth is this: your budget should be strategic, data-driven, and aligned with your goals, not someone else’s.
Whether you're a small business or a growing organization ready to scale, here’s a clear guide to help you determine how much you should invest in social media advertising.
Start With Your Business Goals
Before spending a single dollar, ask yourself:
Are you trying to increase brand awareness?
Generate leads?
Drive website traffic?
Boost sales for a specific product or service?
Promote an event?
Your advertising goals directly impact your budget.
For example:
Awareness campaigns generally cost less per result but require broader reach.
Lead generation or sales campaigns often require larger budgets due to higher competition and more advanced targeting.
Know Your Audience Size
Your ideal budget also depends on who you’re trying to reach.
A few things to consider:
A local audience requires less budget than a national audience.
Broad audiences need more investment to gather meaningful data.
Niche audiences may cost more per click but convert better.
Platforms like Meta Ads Manager will show you the estimated audience size for your targeting. Use that to gauge how much you'll need to spend for consistent, effective reach.
Study Industry Benchmarks
Looking at industry benchmarks can give you a solid starting point for average costs, such as:
CPC (Cost Per Click)
CPM (Cost Per 1,000 Impressions)
CPA (Cost Per Acquisition)
For example, many industries see CPCs ranging from $0.50–$3.00 on Meta, while LinkedIn often ranges from $5–$10+.
These aren’t rules but they do help you project realistic budgets.
Set a Monthly Budget (Not a One-Time Spend)
Social media advertising works best when it’s consistent.
A one-week, one-time ad usually won’t provide the data or momentum needed for strong results. Instead, plan for:
A minimum 3-month ad cycle
Continuous testing and optimization
Monthly measurement of performance and ROI
If a client can only afford $200 one time, they’re better off investing in organic content.
If they can commit $300–$1,000 monthly, they’re ready to run real campaigns.
Consider the Sales Funnel
Your budget should match every stage of the funnel:
Top of Funnel (Awareness)
Broad targeting + low cost = great for reach.
Budget: 20–40%
Middle of Funnel (Engagement/Consideration)
Warm audiences react better to more detailed messaging.
Budget: 20–30%
Bottom of Funnel (Conversions)
These ads require the highest investment.
Budget: 30–50%
If you skip a stage, results drop — fast.
Start Small, Then Scale
One of the biggest mistakes businesses make is overspending too early.
Instead:
Start with a smaller budget.
Test 2–3 audiences.
Compare ad creatives.
Identify your best-performing combination.
Increase the budget once you see stable results.
Scaling works only when you have a winning formula.
Factor in Creative & Management Costs
Your ad budget isn’t only the amount spent on platforms.
A true investment includes:
Ad design and video production
Ad copywriting
Strategy and planning
Campaign management and optimization
Reporting + analytics
These are essential to making your dollars work effectively.
Use the 70/20/10 Rule
A helpful framework many agencies use:
70% → Proven campaigns
20% → New tests or audiences
10% → Experimental ideas
This keeps your strategy grounded while allowing room for innovation.
Track, Measure, and Adjust
Ads are not “set it and forget it.”
Your budget should evolve based on:
Cost per result
Conversion rates
ROAS (Return on Ad Spend)
Seasonality (holidays can be more expensive)
Your audience’s behavior
If something’s working exceptionally well, scale it.
If something’s underperforming, pause it.
Let data drive every decision.
Final Thoughts
Determining a social media advertising budget isn’t about guessing — it’s about strategy. When you align your goals, audience, benchmarks, creative, and testing plan, you set yourself up for measurable success.
The right budget is the one that:
Supports your goals
Matches your audience
Allows for consistent testing
Provides enough data to make informed decisions
Ready to build a smart, results-driven ad strategy?
At Martinez Agency, we help businesses create effective social media budgets, run high-performing campaigns, and turn clicks into conversions.
Let’s grow your business with a customized advertising plan that works. Contact us today to get started.
About Martinez Agency
Branding & Creative • Content Creation • Web Design + More
Crafting Stories, Building Brands
martinez-agency.com | 866-641-7692
Locations in Northwest Arkansas, Oklahoma City and Texarkana, Texas
