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Head Of Strategy Insight Increasing ROI From Social Media Advertising

Head of Strategy Insight: Increasing ROI from social media advertising

It is becoming increasingly difficult to drive organic results with social media. Facebook’s recent Zero update, for example, drives the platform back to its roots of primarily engaging family and friends instead of serving external content through its feed.

This hurts companies who have had plenty of success organically posting Facebook content to engage their audience. They need to move towards a heavier paid strategy to keep up.

Even Twitter has changed their layout in recent years to show more popular Tweets instead of just listing them by order of posting.

It is becoming impossible for companies to get eyes on their posts without either having a very large, established following, or paying for advertising – which take a lot of time and effort as well as money.

So the shift has started – companies are jumping into social advertising and most have no idea what they are doing. Since it is a relatively young space, it’s easy for those who don’t know any better to blindly follow a piece of advice and wonder why it’s not working.

In this article, I will explore some tips and hints for running social media ads by looking at misconceptions about advertising on social media, and what to do when presented with various common scenarios.

Common Misconceptions around Social Media Advertising

Misconception #1 – Infinitely scaling ROI

You see an ROI of 300% on your recent paid Facebook campaign, and what happens? Your boss doubles your budget and expects the results to double too. If only it was that simple…

This is a common misconception, even among experienced online advertisers

The reason this doesn’t work is that audiences are limited. If you target a specific audience with a potential reach of 1 million people, eventually all 1 million people will have been served the ad. Then what? Your results will drop and you need to look at a different audience. The more money you throw at this campaign, the quicker you chew through the available audience, and the sooner you need to make a change. Making the change is what generally doesn’t happen.

The trap that marketers fall into is looking at the raw numbers instead of ROI. If your ads are created to generate leads, the number of leads you generate is irrelevant. You have to look at the value of that lead to your company, and compare that to your ad spend.

Let’s say your lead value is $2 and you spend $100 which generates 100 leads. You have spent $100 for $200 worth of leads. A net profit of $100.

Now let’s double the spend. What will commonly happen is the number of leads you generate won’t exactly double. In this example you might see 170 leads for your $200 spend. Here you will generate $340 in leads for a profit of $140.

That’s fine right? You’ve now made an extra $40 profit!

Where it gets really interesting is when you throw an unreasonable amount of money into the ad. Let’s increase the ad spend to $1000 which may generate you 550 leads, Your profit is just $100. Yes you have generated a huge 550 leads, but you would have an extra $40 if you spent $200 instead. The extra leads are costing you more than $2 each, meaning it’s unprofitable when you hit a certain threshold.

You might think that the assumptions in this example may not always be right. You will be surprised to find how much more difficult it is to generate additional leads. See the below graph for a very realistic trend you will see when increasing ad spend.

ad spend vs leadsIf it’s still not making sense think about it being a quality scale. Out of 1000 people seeing the ad, the first 100 are 10/10 (the perfect target audience), the next 100 are 9/10, the next 100 are 8/10, and so on. Your ad will be served to the 10/10s first and you will see good success here. When you get down to the 3/10s it’s much less likely they will turn into a lead.

Advice: Understand how much a lead or action is worth to your company, and use that to find the sweet spot with your ad spend using my table above.

Misconception #2 – You’ve found the perfect ad campaign

After hundreds of ads and constant A/B testing, you finally found the ‘perfect’ ad. The success this ad sees is miles above the others, and no further adjustments will improve it. While many marketers find this unicorn, they make the mistake of getting complacent and assuming its success will remain constant.

In 99% of cases, something out of their control happens which eventually makes their perfect campaign ineffective.

For example, you might be advertising a specific product that is showing a slow but constantly increasing cost-per-click. You haven’t changed anything, but the CPC is getting more expensive each month. All that might be happening is that one of your key competitors has started advertising to the same audience, meaning there is more competition which is driving up the CPC prices.

Instead of running a single ‘perfect’ ad, you could have been running two ads targeted at two slightly different demographics. If the second ad remained consistent while the first ad dropped, you are more likely to find the issue and adjust your ads accordingly. This quick reaction could save you a lot in ad budget and potential revenue.

Advice: Don’t stop A/B testing. It’s always better to have a few ads running to easily decypher changes and understand the best way to counter them.

Misconception #3 – ‘Well I wouldn’t interact with that ad so it’s a bad ad’

You MUST remove any emotion from your decision making when it comes to creating ads. As harsh as it sounds, your opinion doesn’t matter.

This is one of the most common reasons ads either take a while to generate results or just don’t work at all. You’re not the one interacting with your ads. Any decision you make should be backed by some kind of data and not personal opinion.

So what should you do? Initially, you might not have much data, but you will still have a lot of information. The information you might have is knowing the demographic of who you want to see your ad. This might not be much to go with, but it allows us to start strongly. You just need to make sure this isn’t where you stop. You need to analyse this data and make changes.

A/B testing is extremely important if you are serious about making successful ads. Run 2, 3, 20 ads (the more the better) and compare the results. Find out what works for specific ads and what didn’t for others. The more information you have, the more informed the decisions going into the next campaign will be.

Advice: Create user personas for people interacting with your brand, and make sure to constantly A/B test and apply the information you have, regardless of how much it goes against your instincts. Data always trumps emotion.

“Data always trumps emotion”

Misconception #4: You can calculate exactly how many clicks you will get for your budget

Advertising platforms are becoming much better at estimating your spend, but they cannot predict user actions.

Most people forget that the platform is in it to make money and they will do everything they can to spend 100% of your ad budget. A common example would be getting 80% of the way through the month, but having only spent 50% of your budget. The platform will adjust your ad placements – possibly to something less optimal – in order to ensure your budget gets spent.

On many occasions I have seen a campaign perform exactly as expected half way through the month, only for the end-of-month results to be way off. This is not saying that the platform changed your placements – it’s possible your ad performed better than expected in the first half of the month and corrected in the second half. Just make sure you are looking at complete data when analysing your ad’s performance.

Advice: Take the estimated clicks with a grain of salt and use your historic ad data to form more accurate predictions.

Misconception #5: Impressions help with brand recognition

Impressions mean your ad was shown, but does not mean your ad was seen. There is a huge difference here. It also doesn’t mean that someone who saw your ad will remember your brand name. People have short memories, and will likely forget about you without interaction.

Your primary focus with any kind of ad spend is to get engagement. You want people clicking, commenting, liking, and sharing your ad. They are more likely to end up a customer of some sort if they are engaging.

Most social ad platforms will have a cost-per-impression model, and some even suggest you use it. There is no problem with revolving your whole ad strategy around impressions, just make sure you are monitoring the results and adjusting to a CPC or CPA strategy if it’s not working.

Advice: Set a goal that requires a user to interact with your brand in some way or another.

Misconception #6: You HAVE to run ads

Running ads is not for all businesses. There are definitely effective ways to run ads for every business, but it doesn’t mean it will work out for you. It’s a very easy way to burn through your hard-earned profits. Here are some key points to remember:

  1. If you don’t know what you’re doing, don’t do it. Ads might be a something that your competition is doing successfully, but they likely know what they are doing. If you or your staff don’t have experience, explore whether an agency can fill the gap. If you do this, make sure you adjust your calculations from misconception #1 to include any fees the agency charges for running your ads.
  2. If you are a very cash-flow focused business, be careful with your ad spend. Most platforms require you to pay at the end of a month of service, or end of a calendar month of service. If you are relying on sales from your ad campaigns to pay for the ads themselves, you need to be very careful as slight performance dips can have a worrying impact on your business.
  3. If you don’t have time to A/B test, or to analyse the data, you shouldn’t be running ads. You might still show a positive ROI, but it’s likely you aren’t getting the most out of your ads.

Advice: If you’re going to do it, do it right.

Common social media advertising scenarios and how to navigate them

Scenario #1: Performance drop without anything changing

Inevitably, all social media advertising campaigns will show a drop in performance. This is covered in misconception #2 earlier in this article.

This is due to the fact that every target audience is finite. There are no exceptions to this rule. It might take you a long time and a lot of advertising cash to get to a point where your ad has been seen by your whole target audience, but it will happen.

This is where retargeting comes into play. Running a separate ad campaign targeting people who have previously seen or interacted with your ad is an effective way to market to them.

You’re constantly reminding them of your brand, and giving them another opportunity to convert into a customer. It also allows you to target them with some deeper-funnel content.

Scenario #2: Short campaigns with a lack of data

This is the trickiest type of situation to navigate. A lot of guesswork will go into these campaigns, but that’s okay.

The best way to counter this issue is to have a perfect knowledge of who your target audience is. If you can get this right (or close to right) from day 1, you will only need to make minor edits to your campaigns when you have available data.

You should also make sure to research your industry and whether others have seen success from social media advertising. You will be surprised how much content is out there explaining how to run ads for your niche. If you have none of your own data to go on, this is a great start.

Scenario #3: Seeing results on one social network only

You might have ads running across Facebook and LinkedIn but only getting decent results from Facebook. This is quite common.

The mistake that is commonly made is creating the ad and target demographic on one network then simply copying it to the other network. While you might get lucky and see similar results, in many cases you won’t.

It’s important to understand how different each network is, and the types of people who use them. The above example of Facebook and LinkedIn is a good demonstration.

Facebook is used to connect with friends and family, and share more ‘fun’ content. LinkedIn is more professional and used by people in the corporate world.

It’s fine to run similar ad campaigns across various networks, just make sure to make changes based on who uses them.

Scenario #4: You’re getting better results from an organic social media strategy

While you may be experiencing strong organic social performance right now, this is about to change quite dramatically.

As mentioned earlier in this article, changes like Facebook’s Zero update will mean that your organic strategies will go out the door. If you rely heavily on organic social media, you need to act now and get a plan in place. In most cases this is going to be a move to paid strategies, but that doesn’t mean you can’t simply replicate your organic strategies to a paid audience.

User-generated content has always been an extremely powerful way to generate content organically. A simple post like “take a photo of your ice cream and tag us with #LoveIceCream” would generate excitement, and have your users create content for you.

In this example, the switch in strategy would simply be to turn a previously organic post into a paid post. You will still need to apply strategies around demographics and A/B testing, but getting on to the ‘paid’ train is a good start.

Aligning your Content Marketing strategy with your Social Media Ads strategy

It’s one thing to write a social post and promote it, but having some valuable content behind it makes the ad much more powerful.

Some of the most popular social posts are images where the only user action is to like, comment, or share the post. If your objective is simply to increase your social following, then there is some merit to this strategy.

For most businesses however, this isn’t going to make you money.

Without going into the hard-sell style of ad (offering discounts etc.), there are generally 3 key types of content you should align with your social ad strategy:

1. Blog posts

Blog posts are the most common type of content accompanying social ads. It’s very easy to whip up a blog posts and push it out over social media with a campaign to boost the engagement.

As a strategy this is fine, as long as the website is set up to properly convert these visitors (relevant CTAs etc.).

2. eBooks/whitepapers

eBooks and whitepapers generally contain valuable information people want to get hold of. They are high quality and cover topics in a great deal of depth.

Since the type of asset itself has high demand, it’s quite easy to turn it into a lead generation social strategy.

The method most likely to generate results is to gate the asset behind a form which requires users to leave their details. The key is making sure the asset is something your audience would be willing to leave their details to get.

3. Infographics

Graphics and social media are a match made in heaven. People are visually responsive and something that catches their eye will make them stop and look.

Give people a teaser of the full infographic instead of letting them access it all from social media. Make them click through to your website (which again is set up for conversions) to see the full infographic.

Tips for using social media ads on each network

Facebook Ads

Facebook has created a very user friendly ad interface to help you run your ad campaigns. They also have the best demographic data to help you target your audience extremely specifically.

Theoretically, it would be possible to have your ad shown to one specific person!

The trick with Facebook Ads is to know as many details as possible about your target audience. That might sound easy, but maybe I’m not being clear enough – you really need to get into their head.

Let’s say you are wanting to advertise to plumbers who run their own business and will be using a humorous ad. The easy way would be to target people who have ‘plumber’ listed as their profession and leave it at that. Unfortunately that is too wide an audience to target.

Instead, you can look up some plumber meme pages (yes, there are MANY) and target people who are plumbers, and like one of these meme pages. This one small change means you are much more likely to get engagement on your post since it’s not just the profession you are targeting, but also their sense of humour.

You really need to put yourself into your ideal audiences’ shoes and think about how they use Facebook. Remember, most people don’t want to be sold to on Facebook, so you need to take the softer approach.

Twitter Ads

Twitter is used in Australia and New Zealand much less than other social networks. This is an important point to consider when forming your social ads strategy.

Twitter advertising generally comes in 3 types:

  1. Promoted Tweets: These are Tweets that are placed in front of a wider group than your followers. The aim is to drive engagement by a wider audience commenting and retweeting to their followers.
  2. Promoted Accounts: Your account is regularly added to the ‘suggested people to follow’ section in order to drive more account followers.
  3. Promoted Trends: You can purchase a ‘trend’ which appears at the top of the currently trending topics section of Twitter. This is only used by larger corporations and isn’t available through the standard ad platform.

The key to successfully advertising on Twitter is the content you are Tweeting (for type #1 at least, which is the most common type). If you have a large following and they aren’t engaging with your Tweets, it is unlikely that promoting them will do you much good.

People still need to WANT to interact with your Tweet, so making sure your post is engaging is a must.

LinkedIn Ads

LinkedIn as a social media network is very polarised. You have the professional side who only use it to get updates which are more professional or formal. The other side use it similarly to Facebook and are posting memes, birthday updates, and jokes while tagging their friends.

This is something to be careful with when advertising on LinkedIn.

My advice is to stick to the professional side, as people are happy to attack posts (especially from companies) that they don’t deem to be professional.

The audience information you can get from LinkedIn is generally focused around job titles. It’s the piece of information that is most likely to be accurate, especially from active users.

The best types of ads are targeted towards a specific job title where there is a common problem they face day-to-day. Your ad helps them solve that. If you are a PR agency, there are people with very specific jobs who would find a PR agency very useful. Your ad can literally say “Are you a marketing manager who needs help with PR? Check us out” and it will outperform most poorly thought-out ads.

Instagram Ads

Since Facebook owns Instagram, you can easily advertise on Instagram through the Facebook Ads platform. It’s as simple as ticking a box.

Unfortunately, this is what a lot of marketers do – they just tick the box.

Instagram is a very visual network and you have to keep that in mind when running your ads. Ads that work on Facebook don’t always work on Instagram.

If you are an Instagram user already, think about how you use the app and what you interact with. Most people scroll very quickly through their feed until they see something that catches their eye.

Your ad needs to be the image that catches their eye. You will see much stronger results with powerful imagery that can make a user stop scrolling to see what your image is all about.

In conclusion

It is becoming increasingly difficult to generate ROI through organic social media strategies so make sure you consider how paid social media advertising will help your business. Whether you are a small, medium, or large business, these trends will have an effect on your social media ROI.

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Trent Paul About the author

Trent is Castleford’s top SEO expert and Head of Strategy for the business. His monthly Head of Strategy Insights column digs deep into SEO, UX, CRO and the world of social media and Google Ads campaigns.

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