Social Media Advertising: The Key to Expanding Your Reach in 2024

For brands aiming to connect with new or existing audiences in 2024, social media advertising is essential. With organic reach steadily declining, there’s every chance even a large proportion of those who follow you might not be served your content.

Investing in social media advertising ensures your content reaches your desired audience. You can precisely target your market and control your spending.

What is social media advertising?

Social media advertising involves spending money to promote your content on social platforms, reaching your target audience more effectively. The number of people who see your ads is known as your “paid reach,” in contrast to “organic reach,” which is determined by social media algorithms.

Top 3 benefits of social media advertising-

1. Reach a specific target audience: Social platforms offer detailed ad targeting, allowing you to micro-target campaigns and reach those most interested in your products, maximising your ad spend.

2. Learn and revise in real time: Social ads provide instant feedback. You can assess the effectiveness of a sponsored post in real time and adjust your strategy, reallocating budget to your best-performing ads with just a few clicks.

3. Easily track ROI (return on investment): While calculating the ROI of your overall social strategy can be challenging, social ads reporting offers clear insights into the monetary value of your efforts.

How much do I need to spend?

This is the big question! First off, it’s important to say that when it comes to social media ads, you get out what you put in. Throwing £10 – £20 a day on your ads is simply not going to reap the rewards. 

Calculating your recommended social media ad spend

There are two very common and popular ways to help you determine how much you should be spending. 

1 One approach to calculating your ad spend budget is to view your overall marketing budget as a slice of your total revenue pie.

For many clients, the cost to acquire new customers typically ranges from 10 to 15% of their total revenue. This means 10% of their revenue is allocated to marketing, promotion, and customer acquisition, whilst the remaining 90% is spent on production, fulfilment, operations, and other expenses.

For instance, if your annual revenue is £500,000, you might allocate 10% (or £50,000) for marketing and customer acquisition. A portion of this marketing budget will then be used for social advertising.

Your overall marketing budget might include business development expenses, such as networking and professional organisation memberships, as well as costs for hiring freelancers or agencies to handle writing, graphic design, and social media management.

Your paid social media budget will likely be a smaller portion, typically 15-20% of your overall marketing budget.

2 Another way to determine your social ad spend budget is by calculating your website conversion rate.

For eCommerce clients, this is straightforward because sales typically happen online shortly after an ad is seen. Your ROI measurement tools should track how many visitors come to the website and what percentage convert into paying customers.

If your website conversion rate is 2%, for every 100 visitors, two will become customers. If your goal is 20 new customers, you need to attract 1,000 visitors. Here’s the formula:

Number of Customers Desired / Website Conversion Rate = Number of Website Visitors Needed

So, 20 customers divided by 2% (20/0.02) = 1,000 visitors

If it costs £2 to get a visitor from social media, 1,000 visitors would require a £2,000 ad spend, so the formula is:

Number of Website Visitors Needed × Cost Per Visitor = Ad Spend Budget

So, 1,000 visitors multiplied by £2 each = £2,000.

You might now be asking – “OK so my ad spend is £2k. Should I be spending that daily, weekly or monthly?” And the answer to this is simple – that depends on your growth goals. If you require 20 new customers per day, then that’s your daily spend. If you require 20 new customers per week, then that’s your weekly spend, and so on.

For lead generation clients (e.g. B2B consulting services), a conversion might be a prospect filling out a contact form. The formula remains the same but focuses on generating leads instead of immediate sales:

Number of Leads Desired / Website Conversion Rate = Number of Website Visitors Needed

Which of the two methods above feels more easy and intuitive to you? Do you have a different way of determining your ad spend budget for social media? 

If the world of social media ads just feels a little too much,we can help! We offer both a managed service where we can build and manage your ads throughout a campaign, or alternatively we can just get you set up and hand them back to you to manage. We manage effective advertising campaigns on all the major platforms, but most specifically on Meta and LinkedIn. Get in touch with us for more information on our paid advertising services.

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