Are Paid Social Media Ads Giving You the Best Results?
There’s no denying it: we live in a social media-dominated world. As of 2019, 3.5 billion people use social media. Every minute, we collectively upload 500 hours of video to YouTube, share 3.3 million Facebook posts, post 65,972 photos on Instagram, and tweet 448,800 times[1].
This incredible volume of users makes social media an obvious channel for advertisers. If social media is the driving-force of modern society, then paid ads are the driving-force of social media.
Over the past 18 months, the number of advertisers using Facebook has doubled[2]. As such, it’s no surprise that 73% of marketers believe social media marketing has been either somewhat or very effective for their business[3].
Still, it’s always worth evaluating whether your marketing strategy is operating as efficiently as possible. That’s why we’re posing the question ‘are paid social media ads giving you the best results?’. We compare paid social media ads to other cost-effective alternatives to ensure you’re getting the most bang for your marketing buck!
Paid Social Media Ad Statistics
Average Paid Ad Costs At a Glance
| CPC | CPM | |
| $1.86 | $11.20 | |
| $3.56 | $7.91 | |
| $0.38 | $6.46 | |
| $5.26 | $6.59 |
In 2019, the average cost-per-click (CPC) for a Facebook ad is $1.86, while the average cost-per-thousand-views (CPM) is $11.20. While there is no minimum average monthly ad spend, a typical small business pays approximately $1,000-$2,000 per month to advertise on Facebook[4]. The average click-through rate (CTR) for a paid Facebook ad is 0.9%, while the average conversion rate is 9.21%. Finally, the average cost per action (CPA) for a paid Facebook ad is $18.68[2].
Of course, these figures can vary depending on a number of factors, including target audience, quality of ad, and the advertisers’ industry. For example, the average CPC for the ‘Apparel’ industry is only $0.45, compared to $3.77 for ‘Finance & Insurance’. Similarly, the average CTR in the ‘Legal’ industry (1.61%) is more than three times higher than in ‘Employment & Job Training’ (0.47%). Conversion rates have perhaps the largest discrepancy between industries, ranging from just 0.71% for ‘Industrial Services’ to 14.29% for ‘Fitness’[4].
Then again, these numbers only tell part of the story. While a low CPC is one thing, it means little if a user reaches your site and doesn’t convert. Effectively, this would mean you have to pay again to re-acquire the user. If paid social media advertising is your sole acquisition strategy, costs will increase exponentially as users are driven back to your site through paid sources.
Looking at key statistics for other major social media advertising channels, Instagram offers a higher average engagement rate than Facebook, however the average CPC ($3.56) is also higher, while the average CPM is lower at $7.91[5].
Although Twitter has a smaller user base than Facebook, the average CPC is only $0.38, while the average CPM is $6.46 and the average cost per engagement (CPE) is $1.35[5].
Finally, the average CPC on LinkedIn is $5.26, while the average CPM is $6.59[5].
Each social media platform offers a range of benefits and drawbacks for paid ads depending on your marketing strategy and business goals. However, while social media advertising may seem unavoidable in today’s landscape, it’s worth evaluating whether you’re getting the best bang for your buck.
Alternatives to Paid Social Media Ads
As mentioned, the average CPC for paid ads on Facebook varies drastically depending on the advertiser’s industry. While traditionally attractive industries for consumers such as Apparel ($0.45), Travel & Hospitality ($0.63), and Retail ($0.7) enjoy excellent value for money, other industries like Consumer Services ($3.08), Employment & Job Training ($2.72), and B2B ($2.52) aren’t so lucky[4]. This is where alternatives to paid social media ads may be able to provide more cost-effective retargeting solutions.
For example, OtherLevels recently helped a not-for-profit organisation achieve significantly increased conversion rates and purchasing behaviour. As a charity, their website received a large volume of unknown web traffic. However, only 1-2% of these unknown users would convert into registered customers.
Using OtherLevels’ sophisticated platform, the organisation was able to increase site conversions through the funnel and reduce acquisition costs. Unlike paid social media ads, OtherLevels are able to convert anonymous traffic to users on-site. This means you can re-engage users after they’ve left your site without having to pay for it again. Not only can OtherLevels reduce costs, but opting users into your list means you have control over how you engage them, in contrast to the paid social media model of charging to engage with your audience and controlling who sees your content.
Thanks to OtherLevels’ unknown visitor tracking, on-site interstitials, off-site web push notifications, and multi-step user journeys, the not-for-profit organisation enjoyed a 16.4% increase in conversion rate. Additionally, they experienced an 8.4% increase in purchase behaviour, plus 4x ROI for every dollar spent.
Notably, this 16.4% increase in conversion rate is higher than the average conversion rates for paid Facebook ads, representing better value for their retargeting efforts, without having to pay to re-acquire the same users.
While paid social media ads are often a key aspect of a marketing strategy, they don’t have to be the sole focus. Paid social media ads may appear to offer relatively cost-effective prices, however if you are continually paying to drive users back to your site, these costs can add up steeply over time. Rather, by converting users on site, it is possible to avoid paying to re-acquire traffic.
As such, it is worth evaluating whether paid social media advertising is offering the best value for your marketing objectives, or whether your retargeting efforts could be better focussed elsewhere.
References
[1] https://www.smartinsights.com/internet-marketing-statistics/happens-online-60-seconds/
[2] https://www.wordstream.com/blog/ws/2017/02/28/facebook-advertising-benchmarks
[3] https://au.oberlo.com/blog/social-media-marketing-statistics
[4] https://fitsmallbusiness.com/how-much-does-facebook-advertising-cost/
