Social Media Advertising for Small Businesses
If you’ve experienced success with paid search, you may have given thought to social media advertising. Increasing numbers of small businesses are bringing paid social into their social media strategy, and the diversification of online advertising into social media channels can be seen everywhere.
Image credit: KDDI
However, if you run a small business, you might be wondering whether social media advertising is a good fit, especially if your current advertising budget is stretched thin. What ad types will be most effective for your business? Which network has the greatest potential reach? Which platform has the most competitive CPA? These are all important questions for people who are thinking about paid social media advertising, so in this post, we’re going to dive deep into the data and examine the pros and cons of each social channel from an advertising perspective.
We’re going to assess the strengths and weaknesses of four major social networks: Facebook, Twitter, Google+ and LinkedIn. We’ll be looking primarily at four criteria:
- Advertising reach
- Ad formats
- Advertising performance
- Targeting options
Facebook is the biggest player in social media. Boasting an enviable user base and a sophisticated platform, Facebook is an attractive option for advertisers hoping to increase their visibility – but is it a viable solution for small businesses?
Facebook Advertising Reach
When it comes to audience reach, Facebook is the undisputed king of the hill.
- 1 billion registered users (33% of ALL internet users worldwide)
- 699 million daily active users (23% of all internet users worldwide)
Facebook Advertising Formats
Facebook ads are broken into three categories:
- Online sales
- Local stores
- Mobile apps
However, there are numerous ad types that fall within these three categories.
Let’s take a look at an ad from within the “Online sales” category.
This type of ad is known as a Page Post ad, because it invites the user to “Like” a specific brand page. It looks similar to the type of post you’d share with your friends, but you have the option of “Liking” the Optimizely page. These ads appear directly in users’ News Feeds, which means they’re typically dispersed among posts and updates made by people you’re connected to.
You can create variations of these ads to include product-specific landing pages, as seen in the example below. Note that users can both Like the page and click on the “Learn More” or “Shop Now” buttons to be taken to a dedicated landing page:
Below is an example of the Local Stores ad format:
These ads look a lot more like actual advertisements. They’re also a lot smaller than Suggested Posts like the Optimizely example above. Finally, these ads appear to the right of users’ News Feeds, usually alongside at least a couple of other similar advertisements.
If you’re hoping to increase your potential reach on Facebook, you can also use the sidebar ad type to boost the number of Likes of your brand page. These ads can appeal to users based on their friends’ Likes, lending brands further credibility through Facebook’s built-in social proofing:
Facebook also offers ads that help promote app installs on mobile devices. These ads look like this:
These ads usually appear in groups that can be navigated by swiping horizontally on a mobile device, or by clicking a directional arrow. Placement of these ads can be affected by the app usage of people in your network, as well as your personal behavior on Facebook.
There are a number of other ad types available to Facebook advertisers that fall within the three main categories. They include:
- Inline Like ads
- Event RSVP
- Sponsored Page Like Stories
- Sponsored App Action Stories
- Sponsored Page Post Action Stories
- Suggested Place Check-In Stories
Facebook Advertising Performance
The performance of Facebook advertisements varies depending on the ad format in question.
The data below lists the average click-through rate (CTR) of Facebook ads:
- External Website Ads – 0.04%
- Event RSVP – 0.02%
- Inline Like – 0.03%
These CTRs align with typical benchmarks for display advertising campaigns on the Google Display Network. Although the CTRs themselves may be low, these advertisements can still benefit your business, as their placement within users’ timelines can significantly boost brand exposure and awareness.
However, other types of Facebook ads boast much more impressive rates of engagement. Note the average CTRs of the other Facebook ad types:
- Mobile App Install Ads – 1.72%
- Page Posts – 2.03%
- Sponsored Page Post Action Stories – 2.13%
- Sponsored Page Post Like Stories – 2.32%
- Sponsored Place Check-In Stories – 3.20%
To see how this data compares to the cost-per-click (CPC) and cost-per-thousand impressions (CPM), look at this data:
Data via Salesforce Social’s Facebook Ads Benchmark Report, 2013
As you can see, some Facebook ads offer remarkable ROI, such as the Sponsored Place Check-In Story ad type, which has the highest CTR with the lowest CPC. Other ad types, such as the Sponsored App Action Story, are the inverse, with high CPCs and low CTRs.
Facebook Targeting Options
Facebook is also a strong performer in terms of the options available to advertisers for demographic targeting.
Advertisers can target audiences based on:
- Likes and interests
- Relationship status
Businesses That Can Benefit From Facebook Advertising
The diversity of Facebook’s audience means that many different types of businesses can benefit from advertising on Facebook. However, some businesses can tap into Facebook’s primary strength – the prevalence of images – more than others.
Businesses that may benefit the most from advertising on Facebook include:
- E-commerce retailers
- Travel agencies
- Craft businesses
Pros and Cons of Facebook Advertising
For small businesses, Facebook represents an unparalleled opportunity to increase their reach. With unsurpassed audience reach and strong targeting options, Facebook is a great choice for businesses hoping to increase foot traffic to stores, web traffic to their site, or maximize brand exposure. While the organic reach of Facebook traffic has fallen steadily, there are numerous opportunities for paid search advertisers to get their messages in front of Facebook’s vast audience.
However, Facebook appreciates its position as the top dog in social media. As such, the expense of Facebook ads may be prohibitive to some businesses, and certain ad formats may not offer the kind of ROI to justify their cost.
Twitter users seem to fall into one of two camps – those who love it and use it frequently, and those who really don’t get it or see the appeal. For social media advertising, Twitter can be very effective, but it is not without its drawbacks.
Twitter Advertising Reach
Twitter has a dedicated and loyal user base, making it an option worth considering for advertisers who want to target a reliable audience.
- 271 million active users across mobile and desktop
Twitter Advertising Formats
Twitter’s ad formats are much more straightforward than those offered by Facebook.
The first type of ad offered by Twitter is the Promoted Tweet:
These ads appear in users’ timelines just as “organic” tweets do. All that denotes these tweets as ads is the “Promoted by…” label. Promoted Tweets can make use of hashtags and include links to dedicated landing pages, just as regular tweets do.
The second ad format available to Twitter advertisers is the Promoted Account:
These ads appear in the left-hand sidebar of Twitter.com alongside other algorithmically suggested accounts that users can follow. Advertisers can choose to have their accounts promoted to users based on a wide range of targeting options (see below). Again, all that separates Promoted Accounts from those suggested algorithmically is the small “Promoted” label.
The third and final advertising format offered by Twitter is the Promoted Trend:
Similarly to Promoted Accounts, Promoted Trends appear in the left-hand sidebar of Twitter.com on desktops. They will often appear at the very top of the list of topics currently trending on Twitter. This placement makes them an ideal opportunity to reach vast numbers of users, and dominate the conversation around a given topic.
Twitter Advertising Performance
Unfortunately for advertisers hoping to gain insight into how well each of Twitter’s ad formats performs, Twitter remains notoriously tight-lipped about how its ads stack up against the competition.
However, Twitter ads have an average CTR of between 1-3%, which is considered reasonably standard in the social advertising space for these kinds of ads. As they are primarily text-based, these ads perform comparably to text ads on the Google Search Network.
Twitter Targeting Options
What Twitter lacks in audience reach it more than makes up for with its targeting options.
Advertisers using Twitter can target users based on the following criteria:
- Existing followers
- Users like your followers
- Tailored audiences (cookie IDs, email addresses, Twitter user IDs)
- Keyword (Search and Timeline options)
- Interests (more than 350 subtopics)
- TV show (integration with live broadcasts, push/pull functionality)
Businesses That Can Benefit from Twitter Advertising
Believe it or not, Twitter is far more than just angry updates about sports teams and pictures of cats. Publishers and B2B companies can gain significant brand exposure and user engagement by advertising on Twitter.
According to a recent infographic by Neil Patel:
- 53% of businesses in the information and communication verticals reported the highest rate of blog and microblog (Twitter) usage
- 85% of B2B marketers use Twitter
- 50% of B2B marketers see Twitter as an effective social media channel
Pros and Cons of Twitter Advertising
Though its user base may be relatively small in terms of global reach, Twitter has a strong dedicated fan base who use the service frequently.
Twitter ad performance at least mirrors that of traditional paid search ads, but leverages the power of mobile in a way that is not overly intrusive to users, which is a major plus. The service’s extensively customizable targeting functionality enables advertisers to tailor their messaging to highly specific demographics of their target market, and integration with televised broadcasts offers excellent brand awareness opportunities.
However, for small businesses, the costs of Twitter advertising may be prohibitive. The cost of a Promoted Trend, for example, recently surpassed $200,000 per day, putting this ad format out of reach for all but those with the deepest pockets.
For B2B advertisers, LinkedIn – the world’s largest professional social network – offers valuable opportunities to get their message in front of the right people. With a growing audience and excellent targeting options, LinkedIn Ads are worth considering for advertisers who know exactly what type of professional they want to reach.
LinkedIn Advertising Reach
LinkedIn’s audience is comparable to other social networks.
- 300 million active monthly users
It’s worth noting that LinkedIn is growing quickly. Two professionals join LinkedIn every second, and the service is becoming wildly popular in emerging markets such as India, making it a solid long-term bet in terms of consistent audience growth.
LinkedIn Advertising Formats
Similarly to Twitter, LinkedIn offers three main advertising formats.
The first is the LinkedIn Sponsored Update:
These ads appear alongside organic content in users’ news feeds. The only thing that differentiates Sponsored Updates from typical updates is the small “Sponsored” label in the top-right corner.
The second ad format offered by LinkedIn is the LinkedIn Display Ad:
Again, much like traditional PPC ads displayed on search engine results pages or Twitter ads on the Twitter desktop client, LinkedIn Display Ads appear on the right-hand side of a users’ screen. These small, compact ads are typically displayed alongside other ads.
The third ad format available to LinkedIn advertisers is Direct Sponsored Content:
This relatively new ad format is not yet available to all advertisers, and is still in the pilot phase being tested by a select few major brands. However, initial reports suggest that engagement with these advertisements is strong, which indicates that this ad format will soon be made available to all advertisers. One of the major benefits of this ad format is the ability to include more interactive content than that of a typical display ad, further boosting user engagement.
LinkedIn Advertising Performance
The performance of LinkedIn ads varies by type.
The network average for LinkedIn Display Ads is 0.025%, which aligns with paid search benchmarks for this ad type.
Sponsored Updates’ performance varies widely depending on the publisher and the targeting options selected, and no data is yet available for the Direct Sponsored Content advertising format.
LinkedIn Targeting Options
LinkedIn offers unique targeting options to advertisers that leverage the platform’s strengths as a professional social network. These options are ideally suited to B2B companies, as advertisers can target audiences according to:
- Job title
- Job function
- Company name
- Company size
- Membership of LinkedIn groups
Business That Can Benefit from LinkedIn Advertising
Companies in the B2B space have it hard. After all, selling to the public is one thing – selling to other companies is another matter entirely. Fortunately, LinkedIn advertising is an excellent way for small businesses to connect with companies seeking their services.
- 65% of B2B companies have acquired a customer through LinkedIn
- 91% of B2B marketers use LinkedIn
- 40% of B2B buyers stated that researching prospective vendors on LinkedIn was important
Pros and Cons of LinkedIn Advertising
The two biggest advantages to advertising on LinkedIn is its growing worldwide audience and the breadth of options available for user targeting.
However, LinkedIn ads suffer from two significant drawbacks. Firstly, the minimum CPC of a LinkedIn advertisement is $3.50, making advertising on the platform very expensive compared to other channels. Secondly, there are currently no remarketing options available, meaning that advertisers could be missing out on significant conversion opportunities.
It’s hard to imagine the internet without Google’s search engine, but what about its social network, Google+?
Google+ Advertising Reach
It can be tricky to calculate the reach of Google+ as an advertising platform due to its integration with many of Google’s other products.
- 300 million monthly active users
Advertisers who are considering using Google+ as part of their social advertising strategy may want to bear in mind that Google describes active users as those being “in the stream.” This means that the true audience of Google+ as a social network may not necessarily be 300 million, but an aggregate of users taking advantage of Google’s other products such as YouTube.
Something else that makes Google+ unique as an advertising platform is that its single ad format, the +Post ad (see below), can be displayed across the entire Google Display Network, significantly expanding advertisers’ potential reach.
Google+ Advertising Formats
Google+ offers just one advertising format, which is known as +Post ads:
However, while Google+ may only offer one ad format, +Post ads are remarkably flexible. For example, any content a company posts to Google+ can be turned into a +Post ad, including images, video, and text.
Any YouTube video can be easily imported into Google+ and transformed into a +Post ad, and users can join live Google Hangouts on Air simply by clicking on the ad. This flexibility makes +Post ads much more engaging and social than traditional display ads. Basically, people can interact with +Post ads just as they would with a typical Google+ post from wherever the ad is displayed without having to visit Google+ itself. This means anyone who sees a +Post ad displayed on a Google Display Network can +1 the ad, leave a comment, and interact with the ad, all from another site - functionality that makes +Post ads radically different from any other social advertising format.
However, although flexible, +Post ads cannot be created by just anyone. To qualify as a Google+ advertiser, you must:
- Have at least 1,000 followers
- Ensure that your +Post ad contains content relevant to your audience
- Have opted in to shared endorsements for Google+ pages
Google+ Advertising Performance
The potential performance of Google+ +Post ads varies the most of any social advertising solution. However:
- An average CTR of ~0.4% is considered the typical baseline for a Google Display Network campaign
Factors such as impression volume can affect the CTR of +Post ads considerably. If you’re an experienced GDN advertiser, you will likely have a better idea of the kind of performance you can expect from a +Post ad campaign.
Google+ Targeting Options
Again, it can be difficult to pin down the precise targeting options available to Google+ advertisers due to +Post ads’ dependence on the Google Display Network. However, the following options are starting points for Google+ advertisers:
- Contextual targeting (show ads on sites related to specific keywords)
- Placement targeting (show ads on specific sites)
- Remarketing (show ads to users who have previously visited your site)
- Interest categories
- Topic targeting
- Geographic and Language targeting
- Demographic targeting
Businesses That Can Benefit From Google+ Advertising
It’s no secret that marketing professionals love Google+, simply because of the additional ranking factors that the platform may (or may not) offer. However, while big brands often maintain a strong presence on Google+, that doesn’t mean there’s no room for the little guys.
According to Patel’s infographic, 68% of Google+ users are male, making Google+ an ideal platform for small businesses targeting a predominantly male demographic. In addition, businesses that cater to marketing and B2B professionals can benefit from using Google+ advertising due to the prevalence of professionals in these industries on the network.
Pros and Cons of Google+ Advertising
Google’s remarketing options make Google+ ads a strong choice for advertisers who want to recapture missed conversion opportunities. The potential control offered by the Display Network’s Contextual and Placement targeting functionality also makes +Post ads a contender for businesses that know where and when they want their ads to appear. Finally, the highly interactive nature of +Post ads can significantly boost user engagement, thus improving ROI.
Of course, restrictions on who can create +Post ads is a major drawback, particularly for smaller businesses or those new to social advertising. The potential costs of ads with high impression volumes may also create problems for advertisers with limited budgets.
Other Social Networks
So, we’ve covered the Big Four™ social media platforms, but they’re not the only players in the game.
Love it or hate it, Instagram is big business when it comes to social. Facebook’s acquisition of the image-sharing social network propelled Instagram into the big leagues, but it was popular with the cool kids long before Zuckerberg and his crew got their hands on it.
Instagram marketing has a potential reach of approximately 200 million active users. However, the platform’s integration with Facebook means that advertisers hoping to leverage the power of Instagram may be able to reach significantly more potential customers.
The biggest drawback for small businesses hoping to advertise on Instagram is its sheer popularity. Instagram operates on a CPM advertising model, meaning that advertisers are charged per 1,000 impressions their ad receives. The problem is that due to the number of Instagram users, and the platform’s popularity with major brands, the costs involved are likely to be prohibitive for the average small business.
A relative newcomer to the social media advertising party, Pinterest could prove an interesting platform for advertisers in the future.
Although Pinterest’s user base is much smaller than those of its peers (with just 70 million registered and 20 million monthly active users), many Pinterest fans are highly loyal to the platform. Major brands such as Etsy have experienced tremendous exposure thanks to Pinterest, meaning that for the right businesses, the platform could be worth looking at from an advertising perspective.
However, Pinterest has just one advertising format – Promoted Pins – and it’s too early to say how effective they are, as the advertising program is still in a closed beta testing phase. As such, no performance data has been made available.
Before choosing a social channel on which to advertise, consider your needs and budget carefully. Is audience segmentation more important to you than CPA? How will you calculate the ROI of a social campaign compared to a traditional paid search campaign?
Social advertising has transformed the ways in which brands interact with their customers. Just because big brands were early adopters of social advertising doesn’t mean that smaller businesses cannot benefit from leveraging the power of social media in their promotional efforts.