Social Media advertising platforms are serious business giants that channel the attention of your customers. Considering that more and more people are evaluating your social media engagement, it is becoming dangerous not to manage your social presence. Their (paid) engagement is on a constant rise in the last decade, creating a very fast-moving attention economy.
Most entrepreneurs and companies benefit from social media, and we’d like you to be one of them. The questions arise: Is Social Media Advertising necessary for every type of business? How do you determine that investing in social media is the right fit for your company?
Do Businesses Need To Advertise on Social Media?
You don’t want to invest in irrelevant clicks, letting Zuckerberg and Jack Dorsey snatch your hard-earned money. To avoid that, what you need to do first is to determine what would you like to achieve by advertising on social media and what is your go-to strategy. Would that be more likes on your pages, more views on your videos, or maybe you would like to drive traffic to your website by acquiring more clicks?
Do you think that your company’s budget may not fit in those statistics? And how necessary is to invest in Social Media if there is no budget for that? Alternatively can always hire an agency to produce content for your Social Media that is on the level of your budget instead of purchasing ads, but in this day and age, results from organic social media diminishing (unless you’re on Tik Tok). Take a look inward to your team when it comes to creating content for your Social Media coverage, and try to observe things from a bit different angle.
Alpha Efficiency enjoys focusing on the fine line between creating content and promoting it. You can use the organic presence as the testing ground, before fueling the fire of your next content piece with paid reach.
What you shouldn’t do is make assumptions. That is what happens with many companies that have started their social media accounts without a clear direction. Seeking the truth behind those next parts of the article will lead you down a path– either to one where you are going to determine what you can adjust to, or what you don’t. Anyway, keep in mind that you will leave your business open for much better opportunities when you have a plan, and you will no longer be preventing your company from enjoying Social Media exposure. A balance between paid and organic is the key to finding a sweet spot for social media success.
Rarely Mentioned Social Media Advertising Statistics That Paint the Clear Picture
Although TV commercials are not fading away, 2019 is the first year when digital ad spend surpassed traditional advertising. The opportunities that Social Platforms offer to their users are ideal for advertisements. Research has shown that over 50% of people are using Facebook daily (more than two hours a day, on average), but only 39% of them watch Television. That is what encouraged many of the marketers to invest their dollars into Social Media rather than TV commercials. Budget flexibility is also helping with this.
According to eMarketer.com research, the Total amount spent on Digital Advertising in the US will grow 19% to $129.34 billion this year, which is 54.2% of estimated total US ad spending.
There is 45% percent of Americans that are using ad blockers, though, to the fact that they may not use them on every device. In China, 54% of users are blocking the most ads, but generally speaking, about 50% of people say that they ignore the ads. Fortunately, the new rise of “native ads” on Facebook and Instagram is tough to avoid and is proven to have a higher level of engagement than traditional banner ads.
According to Adobe’s State of Digital Advertising, people by the age of 36 are the most active social media users. They are considering social media as the best platform to use for advertising. On the other hand, people above 37 think that TV adverts are still keeping the advantage, putting the social media in the second place.
How to Structure Social Media and Respective Advertising Accounts
Including components such as quality content, editing tools, and software, paid partnerships and adverts, and also management is necessary for a successful advertising campaign. Around fifty million of small companies are using their Facebook pages to connect with their customers, and more than four million of them are using paid advertisements. We suggest companies keep Social Advertising budgets in a 5 to 10% range for optimal performance. More money should be used on Google ads, Email Marketing, and other online activities that yield better ROI.
Although LinkedIn is business-related, and Facebook is used for fun, both of them are people-based platforms. That creates opportunities for your marketing strategy to reach your audience. Which one would you choose as a marketer? Let’s compare these two networks to determine which one would be the best for your business.
While Facebook is using interest-based targeting as a way of targeting consumers, LinkedIn focuses on more professional targeting, such as job titles and industry. According to that, we can conclude that LinkedIn would suit B2B commerce, while Facebook is better for B2C companies.
Another difference between these two networks when it comes to advertising is the price. The median Cost Per Click for Ads on Facebook is the lowest at $0.51, while for Ads on LinkedIn are the highest at $5.61, although LinkedIn ads aren’t necessarily overpriced. In one survey, it was determined that clicks on LinkedIn Ads are 500% more likely to enable quality leads compared to Facebook.
How to Calculate Your Social Media Budget?
What you should consider when it comes to your social media advertising budget is Ad spend, Technology and Tools, Talent, and Services. Here are some of the percentages that may help the benchmark.
As reported by the CMO Survey, the percentage of the total budget for marketing spent on social media was about 12% in 2018. According to their expectations, it’s about to rise by the end of 2022. For 89%. How is that compared to your business? How big should your budget for social networks be?
Spending large amounts of money is not necessarily equate to success, although wasting your advertising dollars on your social can be quickly done. According to the research of the Business Development Bank of Canada, a rule of thumb is that B2B companies should spend around 2-5% of their revenue on social media marketing. On the other hand, B2C companies should set aside between 5-10%.
But all budgets aside, here at Alpha Efficiency, we love to drive the budget through the cash flow that it is generating. It makes to maximize your ad spend, as long as you see a positive return on investment of your
Importance of Calculating Social Media ROI
The significance of this lies in the ability to improve your campaigns for engagement after measuring your Social Media ROI. Of course, it can happen to any business that they are putting so much effort into their social, but not seeing results yet. To get the most of your social media advertising, what’s important is to determine how much of your advertising dollars you can invest in your social media presence. Make sure to identify your KPIs (Key Performance Indicators) and assign values to them; then it’s time to track the movement of your goals.
Some KPIs we live by here at Alpha Efficiency are:
CTR (Click-through rate) is a marketing metric that allows us to determine the relationship between impressions and clicks.
The other one is Conversion rate – Which shows us the percentage of people that visited our website and completed the form for purchasing our services (which is a conversion) out of the total number of visitors. A high conversion rate indicates a successful Advertising campaign, which means that people want what we’re offering to them, and they can quickly get it.
There is also ROAS (Return On Advertising Spend), which is the marketing metric for determining the efficiency of your digital advertising campaigns. ROAS shows us the relations between how much have we earned from conversions. That way, e-commerce businesses are making decisions on how much should they invest their advertising dollars and how can they become more efficient at maximizing their revenue.
Annually, around 15% up to 25% of the digital marketing budget is spent on social media (both organic and paid).
Measuring Social Media ROI can show you the impact that social has across the business. It tracks where your efforts are used the most effective but also if they’re wasting money so that you can shift your tactics. It helps you understand much better what your audience cares about, what are they responding to, and similar.
Comparing with your competitors may help you uncover some opportunities that will make you stand out in the crowd. If it turns out that your results are a bit different than your competitor, that should not put you down. To improve, you must comprehend the consequences of your actions.
Need help with your social media campaigns? Set up a call with one of our experts on the following form, and we’ll audit your existing campaigns, and ensure that your campaigns are on point and profitable.