All You Need To Know About Paid Social Media Advertising

Up until recently, social media marketing strategies have always been considered as cost-effective, as practically any business – big or small – is free to carry out online advertising for their websites, blogs and social media pages without incurring any fees. Although you can still advertise for free on these platforms, social media advertising has evolved in such a way that you now have the option of using paid social media advertising to boost your marketing strategies.

According to eMarketer, combined digital advertising spending by the US media and entertainment industries is expected to rise to US$11.52 billion by 2020, as growing online consumption of news and entertainment bolsters efforts to reach consumers in the digital realm. In this article, we will explore the ins and outs of paid social media advertising, and why it’s increasingly becoming the new darling of the online advertising sphere.


Paid social media advertising: say what?

A social media advertisement is essentially paid content on a social media network – in other words, you are paying to put up your social media posts. Paid social media advertising is generally used to complement a business’ existing marketing strategies that are free. A key advantage of paid social media advertising lies in its ability to raise the profile and publicity of the brand, product, service or business being advertised.

Paid social media advertising comes in many forms, and among the more common paid online advertising methods include boosted posts, display advertisements and promoted tweets. Currently, almost all social media platforms offer paid social media advertising, and these paid social media marketing strategies can be optimised for both desktop and mobile devices. Among the platforms that have jumped on the paid social media advertising bandwagon include Facebook, Twitter, Instagram, LinkedIn, Pinterest and Snapchat.


Free is great, but not always better

Anything that incurs cost can’t possibly be cost-effective, right? Actually, it’s quite the opposite. While there are some costs involved in using paid social media advertising as a marketing strategy, the amount is rather insignificant considering the high levels of publicity and outreach it offers, compared to the organic reach of free advertisements. For instance, studies have shown that paid desktop advertisements on Facebook boost click-through rates by 8.1 times, while its mobile advertisements boost click-through rates by 9.1 times, compared to normal web advertisements. Also, average engagement rates of promoted Tweets stand at 1–3 percent, which is much higher compared to traditional banner advertisements. All these numbers point to the fact that paid social media advertising is a powerful marketing strategy that should be a business staple in online advertising.


So, when would you use paid social media advertising?

Paid social media advertising is usually used in tandem with organic advertising as a means of complementing other marketing strategies. It helps in many aspects of marketing such as brand recognition, lead generation and conversion rates, giving businesses a leg up when marketing to the target audience. Many company blogs, social media pages and websites rely on paid social media advertising to draw clicks, with a view to eventually convert the audience into loyal readers, followers and brand advocates.

With paid social media advertising, you can avoid being constrained by marketing channels that offer only single benefits respectively, e.g. billboards only serve to generate awareness while emails generate leads, and cover all bases with just a small fee. You can increase the effectiveness of your paid social media marketing strategies by optimising for both desktop and mobile devices. According to eMarketer, mobile ad spending is poised for continued and accelerated investment as consumers are increasingly accessing and purchasing media and entertainment products and services through mobile devices.


How cost-effective is it compared to organic advertising?

According to Facebook marketing partner AdEspresso, the average Cost Per Click (CPC) for paid social media advertising on Facebook is roughly US$0.35 globally, and about US$0.28 in the US, if done on your own, while outsourcing the effort would cost you anything between US$2,500 and US$5,000. Also, the average cost of each ‘Like’ is US$0.23 and the average cost per app install is US$2.74, in the US. There are many factors that determine the cost of Facebook advertisements, among them being advertisement quality and relevance, estimated action rates and targeted audience.

Meanwhile, according to social media content management company $99 Social, paid social media advertising on Twitter would cost you US$1,000–US$4,000 monthly if outsourced, and if done on your own, between US$0.50 to US$2 per click. But considering the fact that Facebook is estimated to have 1.6 billion users worldwide while Twitter clocks in at 313 million users, the opportunities for increased publicity and outreach, as well as high conversion rates, are enormous and surely well-worth your expenditure.


Looking at the big picture – higher returns on investment

After spending all that money on paid social media advertising, you would naturally be keen to know how big are your returns on investment (ROI). In fact, measuring the returns on your social media investment is a must! Essentially, there are two types of ROI: financial ROI and social ROI. The former weighs your investment in paid social media against the revenue generated. For example, if the CPC of your Facebook advertisement was US$0.28 and you managed to get 10 clicks, it would mean having to shell out US$28 for that month. But a mere 10 clicks can bring in revenues that are manifold if you eventually make a sale from all 10 persons respectively.

Apart from the financial ROI you might earn, you may also boost discussions about your paid social media advertisements – this is known as social ROI. Social ROI considers the amount of social engagement (in the form of likes, comments and shares) received from your Facebook advertisements relative to your investment. A key objective of paid social media marketing strategies is to generate high levels of publicity and outreach to raise conversion rates, so the more social engagement you generate, the higher your revenues will be.


ThunderQuote is the most comprehensive business services portal in Singapore, Australia and ASEAN , where hundreds of thousands of dollars of procurement contracts are sourced every month by major companies like Singapore Press Holdings, National Trade Union Congress and more.

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