Paid social media advertising is a heavily invested digital marketing channel for many businesses. In 2020, an estimated £72 million was spent on social media advertising worldwide, a 9.1% increase from 2019. The average daily user time spent on social media in 2020 was 82 minutes, 7 minutes per day more than the previous year. With growing ad spend and the time users devote to social media channels rising, we can expect social media advertising to become a very important part of every businesses digital marketing strategy.
Social media channels provide value to businesses in many forms. Increased brand awareness by leveraging audience targeting and delivering advertisement to highly relevant audiences is one of them. If increasing brand awareness is a goal for your business then this short article will help you understand what paid social is, and how you can reach your business goals by using it.
Paid Social Media Advertising Explained
Paid social media advertising or paid social for short is a method of display advertising on social media platforms such as Facebook, Instagram, and LinkedIn.
If you're new to paid social media advertising you will want to understand the fundamental components that make it work. Read on to find out more about the different terminologies and start to feel more confident with paid social media advertising!
What Is Ad Spend?
Ad spend is like adding fuel to a car, the more fuel you have in your car the further you can go. Ad spend is much the same. Appointing a budget to your campaign influences how many users it will reach. Having a small budget will limit your campaign reach, whereas having a larger budget will increase your campaign reach.
What Is Audience Targeting?
A target audience is a group of users that have specific interests, behaviours, and demographics. Advertising platforms allow businesses to handpick their targeting choices, so businesses can place their ads in front of their target market.
This benefits business by allowing them to curate content for specific audience types and ensures users with very limited interest in the businesses service or product will NOT be shown the advertisement. This minimises the risk of wasting ad spend on irrelevant audiences.
Audience targeting is a popular feature of paid social media advertisement and the key reason to invest in paid social media advertisement. Precise targeting will increase your businesses chances to convert users into customers and provide a positive return on ad spend (ROAS).
What Is A Social Media Bidding Strategy?
The bidding strategy you choose will affect how much you spend on your campaigns. There are 4 main bidding strategies you can choose from when using social media advertising. But which one should you choose? Let’s take a look.
Cost Per Action (CPA)
CPA bidding is a bidding method that allows your business to tightly control ad spend. Rather than paying the ad platform every time a user clicks on one of your ads, CPA bidding requires you to pay every time a user action is completed.
For example, every time a user calls your business or a contact form is filled out, you will be charged. The “action” a user takes is a metric that you define when you set up the campaign, allowing you to align your campaign spend with your business goals.
Variable Cost Per Thousand Impressions (vCPM)
vCPM bid strategy measures how frequent an ad is viewed by your target audience, only charging per “mile” or one thousand impressions. Setting out the maximum cost you are willing to pay for every thousand impressions on your ad.
This bid strategy is the best option for a business that wishes to leverage brand awareness or get a message in front of a large number of people for a low cost. It’s the most cost-effective strategy to get brand awareness but not necessarily a high interaction of click.
Effective Cost Per Thousand Impressions (eCPM)
eCPM bid strategy provides business with a model to define the effectiveness of an ad. The eCPM is calculated by taking the revenue that an ad generates per thousand impressions. For example, if a winning bid costs £1 per click and you receive 10,000 clicks for every 100,000 impressions you will end up paying £10 with an eCPM bid strategy.
An eCPM bid strategy is best applied when several bid strategies are used at once to determine the most efficient strategy. It’s the best way for business to see where ad spend is most efficient and providing the best ROAS.
Cost Per Click (CPC)
CPC was the first bid strategy introduced for social media advertisement, it is often the most used bid strategy because it involves fewer variables. To calculate the CPC divide the total cost to run the ad by the number of clicks it received.
The reason why CPC bidding is a valuable choice for many businesses is that it's simple to set up and run. Once target audience parameters have been set, social media advertising platforms will drive the most relevant traffic to take action on your advertisement. It’s a valuable and recommended strategy to drive traffic to your website.
Social media bid strategies are a great way to ensure your business gets high quality leads at a low cost. With advertisement controllable at the bid strategy level and the audience targeting level, it provides business many opportunities to optimise performance to reach maximum ROAS.
3-Step Guide To Choosing The Right Social Media Channel
Now that we understand the basics of paid social media advertising, how can you choose the right platforms to advertise on? Our 3 steps guide will help you choose the right platform for your business.
Step 1 - Identify Where Your Target Audience Is
If you are a business selling gym clothes to young adults, then you would assume Facebook & Instagram to be the most relevant social channels to advertise on. However, if you are a SAAS business selling to professionals then you might find LinkedIn to be the most relevant channel to advertise on. Be realistic, and try to think about what social channels are relevant to your target audience.
Step 2 - Choose Targeting Parameters
After identifying your target audience, you will want to work out the best way to target them. Each platform has its own targeting parameters to choose from to help businesses target users relevant to the product or services. So, when choosing your social channels to advertise on, make sure to pick targeting choices that will give you the highest chance of reaching a relevant audience.
A good example of the different targeting parameters available is LinkedIn’s ability to target users based on their job title, company name, industry, and professional interests.
Step 3 - Define Your Ad Content Format
By defining the format (video, photo, text) that is most suited for your advertising campaign, it narrows down and identifies the social media platform best suited.
For example, short videos will work well for ads on Instagram, but for longer video ads over 30 seconds, they will be better suited to Youtube. So, think logically, the ad content format will dictate the channel it's most suited for.
The Best Social Media Ad Platforms In 2021
There are 4 main social media channels that your business should be leveraging right now. Let’s dive into what these channels are, and how they can help you reach your business goals.
Facebook's advertising platform is powered by Facebook Business Manager. Its audience targeting is the most powerful feature of this platform, due to the amount of user data Facebook possesses. Facebook has 2.7 billion monthly users, making it the largest social media platform in the world.
Facebook ads can be created in all shapes and sizes. Having the ability to create ads in different formats gives your business the ability to test video and imagery to see what your audiences engage with the most.
Advertising on Facebook is affordable but not the cheapest option with the average cost per click (CPC) approximately £1.27. This is important to keep in mind when defining ad spend.
Instagram is owned by Facebook and powered by Facebook Business Manager. Instagram ads focus heavily on visual content such as photos and short videos. With 1.15 billion monthly users and the main demographic using this platform under the age of 49, it’s again a valuable option for any business selling directly to consumers.
Because Instagram uses the same ads platform as Facebook (Facebook Business Manager) the audience targeting and placement are just as vast, allowing you to narrow down your audience and target those most relevant to your business.
The average cost per click (CPC) on Instagram is around £0.37 - £0.74, making it a very affordable advertising channel.
YouTube ads are powered by Google’s ad platform known as Google Ads. YouTube has 2 billion monthly users, making it the second-largest social network to advertise on. YouTube focusses both long and short video content. YouTube is a versatile advertising platform suitable for businesses who sell directly to consumers, and those who sell to other businesses.
Audience targeting is another valuable aspect of the YouTube platform, using the Google Ads platform it allows businesses to target users based on their interests and online search history.
The average cost per view (CPV) on Youtube is £0.30, making it one of the most affordable advertising channels.
LinkedIn ads are powered by LinkedIn Campaign Manager. LinkedIn is a professional social network with 260 million monthly users, perfect for B2B advertising. Linkedin ads have come a long way since the main text ad placement when it first started, now supporting video and photo format, in a range of placements.
The average cost per click (CPC) on LinkedIn is around £5.00 - £8.00 making it one of the most expensive advertising methods. Keep this in mind when appointing ad spend to this specific advertisement channel.
The True Value Paid Social Provides
Paid social gives your business powerful audience-based targeting, allowing you to focus on users who are most likely to engage and convert with your ads.
Secondly, paid social generates results quicker than many other digital marketing channels. For example, SEO can take 4-12 months to start delivering results, while paid social can be deployed almost immediately.
Lastly, ad campaign results are easily scalable. By simply increasing the depth of the advertising campaign, this broadens the overall reach and impact.
How Can Clear Click Help
Our paid social specialists are here to help your business grow and leverage opportunities with paid social media advertisement. We optimise your advertising campaigns to ensure you're getting the most value for money. With experience advertising for a wide range of business sectors, we know how to get the most out of any social media platform.
Learning more about how paid social media advertising can benefit your business, by taking a look at our Paid Social media advertising service.
Want to leverage your brand using paid social but don't want to do the heavy lifting? Let us do it for you! Get in touch with one of our paid social specialists, we would be happy to give a free consultation and then prepare a customised strategy for your business.