Social media is the future of marketing, there is no doubt.
Last month, Gary Vaynerchuk pointed out that the $85B industry that makes up television ads cannot measure sales like Facebook Ads and newer online forms of advertising.
Social media marketing is critical to your future business success.
In traditional mass media marketing, the gold standard for success was achieving word-of-mouth, a method which instantly granted huge benefits at little to no cost for the advertiser.
When an individual tells their friends about your product or service, you don’t pay them, you don’t compensate them, and their friends know that the recommendation has met the challenge of their friends’ discretion. It has value, and they can take that to the bank!
And that’s exactly what you’re trying to achieve through your social media campaign.
Facebook, LinkedIn, Snapchat, Twitter, Instagram, and dozens of others have advertising built into their platforms for you to use. These option include pay-per-click advertising, as well as cost per impression and cost per conversion ads (on some platforms).
Once you decide on your campaign objectives you can decide which pricing structure works best. Here’s a look at three in particular:
If you want to drive visitors to your website or increase conversions, pay-per-click pricing offers you the option of presenting your ad on a social media platform and you only pay for the advertisement if a user clicks on the ad. For example, a user clicks on the image to go directly to your site. Your campaign will then be optimized and charged for website link clicks.
Also known as CPM (cost per 1,000 impressions) pricing, you pay for eyeballs. “Think of impressions like views: the first time your ad is served to someone in either their News Feed, mobile News Feed or as a right column ad, that will count as an impression. CPM might be a good choice for your business if you want to build awareness around your brand.”
CPMs will vary based on the platform. For instance, “The cost per 1000 impressions (CPM) based on Q2 2016 data in the USA was $5.95.” Meanwhile, Twitter CPMs for promoted accounts and promoted tweets ranged from $3.63 to $8.92 in Q1 of 2015.
Cost per conversion (CPC), is a form of advertising that is not available on all platforms, yet, it is similar to PPC advertising. However, in the CPC model, the customer is tracked past the click-through to your ad to see if they engage with a pre-set conversion goal (e.g., sales landing page, blog post, etc.).
If a user takes a desired action that is considered a conversion. For example, when you look at CPC it is great for answering questions like, “What does it cost to get this newsletter subscriber?”
This pricing method on Facebook, is referred to as “Cost-Per-Action bidding (CPA) [which] allows advertisers to specify a bid amount for an action or conversion (e.g., page_like) and get charged by the amount of conversions that they get. This differs from CPM and oCPM ads, which charge per impressions served on the site, as well as CPC ads which charge for on-site clicks.”
Return on investment is one of the more critical factors when determining whether to launch a particular marketing campaign. Social media offers a huge advantage over traditional marketing campaigns in two ways:
Low Cost: Social media marketing is a low-cost solution, comparably speaking, known for cost-effective rates for impressions and clicks, and direct control over those costs. Only have $1,000 to spend on social media ads? No problem, just configure your ad campaign to run to a maximum campaign budget of $1,000, on most platforms.
Real-time analytics: Unlike other marketing channels, social media marketing allows you to directly access the results of your marketing campaign. In traditional print or TV advertising, a marketing firm dumps dollars into a campaign, runs that campaign, and then attempts to measure whether it was successful by analyzing the results before, during, and after the campaign runs. In social media marketing, the results are directly observable. Each marketing platform provides statistics on the number of times each ad was presented, clicked, and engaged. You can directly measure your return on investment.
Finally, social media connects you to your ideal customers in a personal way. When a social campaign is setup correctly, it allows people to develop a personal relationship with you by providing feedback, insights, and empathy that can in turn be used throughout the product development, implementation and retirement stages. Your customers can become the greatest source of new ideas and strategic, long-range directives.
Ultimately, it’s best to take a test and learn approach with social media ads. Social Media Examiner suggests: “Look at your initial activity as an investment in learning the platform and gathering data about costs and conversion rates. These are things you can use to optimize your future campaigns.”
This article has been edited and condensed.
Matt “Handshakin” Holmes is an entrepreneur, speaker, author, and world record holder. He is Founder of the Handshakin Video Series, featuring top entrepreneurs on networking and personal branding strategies.Connect with @handshakin on Twitter.