We’ve found that B2Bs often have questions for us about the costs of social media advertising and its expected ROI. Sometimes it’s because it’s their first time attempting paid advertising, or their first time getting support from an agency. For others, it’s because their previous agency didn’t show them exactly where their budget went.

So, we wanted to shed some light on the issue and answer the most common questions we get. This blog breaks down various social media advertising costs – both for organic and paid activity. Plus, we give you some tips on how to forecast ROI and set budgets accordingly.

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Social media marketing costs and return

Before we get into the weeds, here’s a quick comparison of what to expect from organic versus paid activity.

This table breaks down the various investments, results and costs of social media advertising.

	Organic (per month)	Paid advertising (per month)
Direct costs	Paying a social media manager	Paying a paid media specialist Paid advertising spend
Indirect costs (activity required)	Strategy creation Post scheduling & management Content creation Graphic design Data analytics & reporting	Strategy creation Post scheduling & management Content creation Graphic design Data analytics & reporting Ads creation Audience creation Campaign configuration & management
Time to results	Consistent, long-term impact	Faster and shorter-term impact
Audience	Limited based on followers and algorithms	Specific based on the targets you set, it can be small and targeted or large and broad
Brand impact	Brand building, visibility, audience growth and loyalty	Lead generation – conversion, engagement or awareness depending on the campaign you create
ROI	Uncertain and difficult to measure in the short term	Can be forecasted and quickly adjusted based on analytics

Some quick stats about the cost of social media:

• On average, businesses spend 11% – 25% of their annual ad budget on social media advertising
• Average ad management fees represent 10-20% of monthly ad spend
• 70% of businesses invest in social media ads to build brand awareness and drive sales
• Average monthly ad spend (in total) is £590 to £1500+
• Across all channels, the average cost-per-click (CPC) is £0.75 to £1.06
• Agency social media marketing packages can cost anywhere from a few hundred to £3,000+ per month

Sources: Expert Market and WebFX

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The different components of your social media budget

	What is it	Average monthly costs
Management	A person will need to set up and manage your LinkedIn campaign. This includes everything from creating your social media strategy to scheduling posts. Additionally, they will spend a proportionate amount of time on reporting and data analysis. They will do this to present performance to executives or clients, but also to identify weaknesses and strengths. Then, it’s their job to manage changes to your ads accordingly to improve results.	For a social media manager or paid media specialist: £2,750 (Based on £33K per year for a social media manager or up to £37K for a paid media specialist.) For an agency: From £587.50* to £5,000^ *This cost doesn’t include the ad budget, or additional media creation like certain designs or content writing. ^This cost includes advanced content creation, community management, advertising campaigns and more
Creative	A social media manager will often handle post writing and maybe image creation. But, there are additional creative tasks that fall outside their remit. For example, you’ll need to think about hiring a content writer if you want blogs or guides to promote in your ads, or graphic designers if you want bespoke designs or higher effort posts like videos.	For a content marketer: £2,040 (Based on £28,806 per year) For an agency: £750 For a graphic designer: £2,066 (Based on £29,178 per year) For an agency: up to £150+ per hour
Paid budget	There are two types of paid LinkedIn ad posts: campaigns or sponsored posts. These ads come with an associated cost-per-click or cost-per-impression. So your total results metrics determine the cost of your ads.	£150 to £1,300 (Based on average CPC of £4.65 and a CPM of £5.82)
Optional extras	There are various additional costs you may need to consider, including: Paid tools for managing social channels, research, analytics and so on Posts that require external support, such as a videographer for a company video Stock imagery costs if you want to use premium images	Tools: range from a few dozen to hundreds of pounds per month depending on users and feature scope. Videography: ranges from £250 per day for a freelancer to thousands for an agency or team. Stock imagery: ranges from a few dozen to hundreds of pounds per image, or some platforms do yearly subscriptions.

What factors affect your total social media costs?

Your business and marketing campaign objectives

The nature of your objectives, and how they compare to your current position, will affect your costs. The more ambitious your goals, the more investment they require to achieve.

For example, if you want to double your follower count in a few months you will need a higher frequency of posts, more valuable and original posts and so on. This means more design, content and social media management time.

The same is true if you want to rapidly grow your business, or gain many sales leads.

Your paid advertising approach

If your strategy involves rapid or ambitious performance growth, you will likely need to invest in paid advertising to reach your goals. If you pursue this route, here are the factors you’ll need to consider when making your budget:

Your objective

Like non-paid activity, your objective changes your likely costs. A LinkedIn campaign marked as ‘lead generation/conversion’ versus ‘awareness’ will come with different cost-per-actions.

For example, cost-per-impression on an awareness campaign could be £1 per 2000 views. In comparison, the cost-per-click on an engagement campaign could be double this for one click, or triple for one converted lead.

Target audience size

A smaller audience means a smaller budget. The broader your audience – the more types of job roles and sectors you want to reach – the more money you’ll have to put behind your ads.

Market competitiveness

How many people are bidding for a certain audience also affects cost. The more demand, the more money you need to spend to compete. For example, financial services is a highly competitive sector right now so will be more expensive to target.

Format

The type of ad you create also affects your budget. Static images are often the cheapest, followed by carousels, while videos are usually the most expensive. Videos are shown less frequently by LinkedIn’s algorithm and take more resource to create.

Ad frequency

How many times do you want your ad to be displayed to one person? Your desired visibility also affects your budget, but don’t worry, higher isn’t necessarily better.

You’ll want to find a sweet spot here. For example, financial services CEOs are a competitive target on LinkedIn. Therefore, they are likely seeing many ads already. You want to show yours ads to them enough that you’ll stand out in the noise, but not too much that you overwhelm them.

Campaign performance

The effectiveness of your campaign won’t necessarily affect your overall budget, but it will affect your cost-per-action. The better your campaign performs – if it reaches more people or encourages many clicks – then your cost-per-impression or cost-per-click will go down.

So, it may not be cheaper, but you’ll get better results for the same budget!

Explore some common social media challenges and how to get around them.

How to set a social media budget

How much should you be willing to invest? Is the cost of social media advertising worth it? Where should you focus your marketing budget?

It feels like a safe bet to stick with organic activity. But it’s difficult to grow quickly or reach new audiences this way – especially as a B2B company. You likely won’t be following short-term B2C trends that tend to drive fast results with new audiences.

On the other hand, paying for advertising can seem risky. But it doesn’t need to be if you predict your expected return on investment. This way, you won’t just throw money at LinkedIn to see what sticks. You can make smart spend decisions that are within your budget.

Here’s how you can forecast your results, their value, and your expected ROI on social media advertising:

1. Determine the value of results

For awareness campaigns – How much is a follower worth?

Paid social activity often starts with reach and follower growth, but followers only have value if they eventually convert, reconvert or share your content to their network. Therefore, work out your customer lifetime value (CLV) and your follower-to-customer conversion rate.

Example:

If your CLV is £1,500 and 5% of followers become customers, each follower is worth £75.

For engagement campaigns – How much is a click worth?

In paid social, a click (say through LinkedIn or Facebook Ads) is valuable because it can lead to a form entered or a demo request. Use your historical click-to-lead conversion rate, industry benchmarks and your average lead value to calculate it.

Example:

• Click-to-lead conversion rate = 5% (Industry averages vary, but are often between 2–5%)
• Average lead value = £250
• Value per click = 0.05 × £250 = £12.50

For conversion campaigns – How much is a conversion worth?

To forecast the value of a conversion, you first need to determine what your company’s average sale is worth, what your expected conversion rate is, and what you expect to spend.

You can use the benchmarks below to gauge what CTR to expect:

• LinkedIn Ads conversion rates typically range between 2–5% for B2B lead generation campaigns
• CTR benchmarks help estimate how many clicks you might get (global average CTR is around 0.5%)

So, if you spend to get 1,000 clicks at a 0.5% CTR and a £12.50 click value, you can forecast your outcome more precisely than relying on guesswork.

2. Forecast results

Use platform benchmarks and past campaign data to estimate your results. You can multiply the value per action by the number of actions you expect from your ad spend.

Example:

£20 per click x 300 clicks from LinkedIn Ads = £6,000 forecasted value.

3. Calculate expected ROI

Finally, how to calculate your forecasted ROI. The steps previously will help you get here. Now, you just need to do a final calculation:

ROI = (Forecasted value – Ad spend) ÷ Ad spend × 100.

Example:

(£6,000 – £2,000) ÷ £2,000 × 100 = 200% ROI.

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How we build a recommended budget

We take many things into account when budgeting for social media activity. All of the factors we’ve discussed in this blog help us determine your ideal budget and optimise the cost of social media advertising.

In short, this is what the planning process looks like:

• First, we set your objectives. From the audiences you want to target to the outcomes you want to see.
• Then, we determine how the campaign needs to be set up to achieve these objectives. How many people do we need to see the ad if we want X clicks in total? How long does the campaign need to run? How many times do we want individuals to see the ad?
• Then, we project costs. How much does the cost-per-click, or impression, cost based on these parameters? How many clicks, or impressions, do we expect to get in total? As such, how much is the predicted total ad spend?
• Next, we factor in the cost of managing and creating this campaign. I.e., how much time it will take to design the ads, write the captions, set up the campaign, and monitor or optimise results.
• Finally, this creates your total campaign costs. We’ll always collaborate with clients at this point to adjust parameters and create a final budget that works for them.
• We also review costs as we go. Once the campaign is live, there are decisions we can make to optimise your costs and ROI. For example, changing ad headlines or LinkedIn landing pages to encourage more clicks – and a lower cost-per-click. Or, moving ad spend from those that aren’t performing to those that are.

Here are some results we’ve achieved through paid and non-paid LinkedIn campaigns:

• 5 meetings booked with target clients – Trailight

• 20x the target SQLs – Riskaware

• 4,500% increase in visibility – Cocoon Bioscience

Want to talk more about the cost of social media advertising?

Our digital expert, Tom, will do a free audit of your LinkedIn profile. In this 30-min consultation, he’ll assess your profile’s strengths and weaknesses, give you some quick wins, and recommend which areas of social media advertising will give you the best ROI.

Book a meeting with him using the calendar below.