With online advertising spend having overtaken TV advertising spend for the first time, knowing best practices when investing your money into social media has never been more important.
The big question is, how much should you spend and where will it take you? Social media campaigns are attractive for two key reasons – cost effectiveness and laser-sharp customer targeting. In essence, each cent you spend will go to potential customers who are interested in your brand, so there’s no wastage, no big bill production costs, and therefore no huge spend.
For instance, $500 in traditional advertising could buy a small print ad or perhaps a few radio ads with limited ways to track your return. It could also buy you a month of an entry-level SEO package or perhaps one to six weeks of Google advertising, depending on your market.
That same $500 in social media could be effective for up to 14 weeks and will result in an engaged audience where the ROI can be tracked in real-time. Here’s the breakdown by social media platform.
$500 ON FACEBOOK
Facebook is arguably the most effective social media tool to engage your business with prospects. One new Like will set you back between 20 cents and 40 cents, which in comparison to traditional media is significantly cheaper. Importantly, your rate of spend will vary depending on the size of reach. For example, a page with 100 Likes may struggle to spend $5 per day, whereas a page with 1000 Likes may spend $15 per day, but with significantly better results.
$500 ON TWITTER
Twitter charges on a Cost Per Engagement (CPE), so you only pay when someone clicks, retweets, replies to or ‘favourites’ your promoted Tweet. Costing is usually between $0.75 and $2.50 per click. If you’re promoting your whole account, Twitter will feature it on ‘Who to Follow’ more or less often depending on how much you bid. The average is currently $2.50 - $4.00 per follower.
$500 ON INSTAGRAM
Instagram introduced advertising in the US in late 2013 and will undoubtedly debut in Australia in the coming months. Working similarly to Facebook, ads will target the most relevant based on Instagram and Facebook activity. Watch this space! This is predicted to be hot in 2014. Based on these numbers, $500 will last between six and 14 weeks and result in 125 to 2,,500 clicks, impressions, retweets, replies, favourites, likes or followers, although the average is in the lower half.
$500 ON LINKEDIN
LinkedIn runs on minimum budget structure, although your daily spend may not be reached if competition is heavy or traffic is low. As a basic guideline:
- Minimum daily budget is $10/day.
- Minimum CPC bid is $2.00/click.
- Minimum CPM bid is $2.00/thousand impressions.
Why choose social media marketing?
Social marketing is the new word-of-mouth and is an effective method for all businesses alike – from start-ups to established multi-national companies. It has proven successful in building brand awareness, trust and a loyal community around your business. It also allows you to test an idea, gauge a market or solicit feedback, with instant feedback available through open conversation with your prospect and customer base.
Social media is also important for small or new players in hugely competitive markets, for instance car loans. Competing head-to-head with pay-per-click advertising at up to $18 per click with less than 1% of clickers converting to a sale is not viable for small businesses.
Social media marketing on the other hand can help the smaller players compete online. For instance, Anyfin, a small car loan firm, began with 169 Facebook Likes in September 2013 and through Facebook advertising and Sponsored Stories gained almost 3,000 new Likes in 16 weeks.
While the potential for social media advertising is endless, it is important to start small and build up from there. Get to know where your market is online and test and measure the results.