Do You Really Need to Invest in Social Media Advertising?
If you’re a business owner seeking opportunities to grow your company, you will have heard of all the great ways you could be paying to promote your business through ads on Facebook, LinkedIn and co. But is it for you? More importantly, is it really necessary? Isn’t social media supposed to be free?
Here’s the thing… Social media was never actually free!
Think about it… Whether you’re managing your own social media or someone is doing it for you, you’ve been paying someone for their time to manage that Instagram account and to update that Facebook page. It just may have been in your own blood, sweat and tears.
And for another reality check: All that time you’re putting into your social media is worthless unless your content reaches your target audience!
With organic reach (how many people see your content without paying for promotion) decreasing across channels, all that time that’s gone into planning and developing that wonderful content to build your brand and appeal to your target audience is a complete waste of time, because nobody will see it!
Ok, maybe the loyal friends following your page and your mom will see and like your posts. Unfortunately, they’re probably not going to be able to sustain your business.
And this essentially is the crux of the matter:
For your business to survive you need sales. To get sales, you need to reach your target audience, teach them about your product or service, get them to go to your website and ultimately make a purchase.
But can’t I do that without paying? Sure, but you may need to adjust your expectations.
Why?
Let’s look at an example:
To illustrate this, we’ll be using the marketing funnel and benchmark metrics to work out how many people we need to reach to achieve our revenue target:
Target revenue: $10,000
Average order value: $100
Required number of sales: 100
How many people do you need to reach?
To work this out we can work backwards using the current Conversion Rate on your site (the likelihood that someone is going to become a lead or make a purchase) and your current Click-through Rate or CTR (the likelihood that someone will click on your content and go to your website).
For this example, we’ll use benchmark metrics for Facebook and an ecommerce site:
Based on benchmarks, we can estimate that on average 1.84% of people who come to your website will convert, which means you need 5,434 people to come to your website and “consider” making a purchase. The average click-through-rate (CTR) for Facebook ads is 0.90%, which means that optimistically, you need to reach over 600,000 people in order to achieve 100 sales!
Now imagine trying to reach that many people organically!
That said, paid promotion might not be for you if:
You don’t have the resources to invest in good quality content. There are no shortcuts. Even if you’re paying to reach your target audience, content is still king to see results! One of the top reasons businesses see a poor ROI on advertising is that their content isn’t up to snuff. Before you put dollars behind your content, make sure it’s truly high quality, aligned with your brand and optimized for your objectives.
You don’t have any budget to invest in ads. If you don’t have funding and your business isn’t generating enough revenue, you simply may not be able to afford to advertise. If this is the case, consider setting aside a portion of your revenue for future campaigns or raising funding.
You don’t have knowledge to run successful advertising campaigns. Don’t get duped by that little blue promote button below your Facebook posts! Digital marketing is a trained skill. While it has become remarkably easy to start running ads, if you don’t know what you’re doing, you’ll end up pouring tons of money down the drain. Invest in educating yourself and/or hire an expert.
If you fall into any of these categories and you choose not to advertise or you only have a very small budget, you may need to realign your expectations with a realistic timeline and volume of sales and/or get creative with other tactics.
Now, if you do have some resources, there are some very good reasons to start investing in ads:
You can quickly increase your reach.
You can run specifically targeted campaigns to reach people who are most likely to convert.
You can choose specific objectives to align your strategy.
You can test and refine your strategy to match the right message, visuals, call-to-action and target audience.
You can get detailed insights to inform your marketing strategy.
How much should you budget for?
Go back to the funnel we used at the beginning to calculate your target reach and plug that number into your advertising platform of choice to see how much you’ll need to spend to reach that many people.
Whether your budget is within reach or not, you can still give your business a bump by starting slowly, iterating, and gradually building up your spend as you gain insight into what works.
Test and refine. This is what works best - and you can start with as little as $5 - $10 a day.
Want to learn more about how advertising can help your business reach your objectives? Contact us to learn more about how we help our clients run effective Marketing Campaigns.
Marielle Reussink
Founder of The Emms, Marketing Professional, Entrepreneur & Advisor to Start-ups