The following article was published in BRW last month … and we are quite proud.
In 2014 the word on every entrepreneur’s lips is social media advertising.
With online advertising spend overtaking TV advertising spend for the first time, knowing best practices when investing money into social media has never been more important.
The big question is, how much should you spend and where will it take you?
Social media campaigns are attractive for two key reasons – cost effectiveness and laser-sharp customer targeting.
In essence, each cent you spend will go to potential customers who are interested in your brand. No wastage. No big bill production costs. No huge spend.
For instance, $500 in traditional advertising could buy a small print ad or perhaps a few radio ads with limited ways to track your return.
It could also buy you a month of an entry-level SEO package or perhaps one to six weeks of Google advertising, depending on your market.
The same $500 in social media could be effective for up to 14 weeks and will result in an engaged audience where the return on investment can be tracked in real-time.
Facebook is the most effective social media tool to engage your business with prospects.
One new like will set you back between 20c and 40c, which in comparison to traditional media is significantly cheaper.
Vast Interiors – Australia and New Zealand’s largest retailer of recycled furniture – relies solely on Facebook advertising and e-mail marketing to promote.
“We run Facebook-only sale events and it’s proven so successful all our franchisees have created their own Facebook pages to speak directly with customers,” says director Ross Clayton.
“It costs Vast Interiors approximately 21c per like, in comparison to $2.50 per customer using traditional advertising, so $500 on Facebook results in more than 2,300 new likes from people that are genuinely interested.”
Importantly, your rate of spend will vary depending on the size of reach.
For example, a page with 100 likes may struggle to spend $5 per day, whereas a page with 1000 likes may spend $15 per day, but with significantly better results.
Twitter charges on a cost per engagement (CPE), so you only pay when someone clicks, retweets, replies to or ‘favourites’ your promoted Tweet.
Costing is usually between 75c and $2.50 per click.
If you are promoting your whole account, Twitter will feature it on ‘Who to Follow’ more or less often depending on how much you bid.
The average currently is $2.50-$4.00 per follower.
Instagram introduced advertising in the United States in late 2013 and will undoubtedly debut in Australia in the coming months.
Working similarly to Facebook, ads will target the most relevant based on Instagram and Facebook activity. Watch this space! This is predicted to be hot in 2014.
Based on these numbers, $500 will last between six and 14 weeks and result in 125 to 2500 clicks, impressions, retweets, replies, favourites, likes or followers, although the average is in the lower half.
Social marketing is the new word-of-mouth and is an effective method for all businesses alike – from start-ups to established multi-national companies. It has proven successful in building brand awareness, trust and a loyal community around your business.
It also allows you to test an idea, gauge a market or solicit feedback, with instant feedback available through open conversation with your prospect and customer base.
Social media is also important for small or new players in hugely competitive markets, for instance car loans.
Competing head-to-head with pay-per-click advertising at up to $18 per click with less than 1 per cent of clickers converting to a sale is not viable for small businesses.
Social media marketing on the other hand can help the smaller players compete online.
For instance, Anyfin, a small car-loan firm, began with 169 Facebook Likes in September 2013 and through Facebook advertising and sponsored stories gained almost 3,000 new Likes in 16 weeks.
While the potential for social media advertising is endless, it is important to start small and build up from there.
Get to know where your market is online and test and measure the results.Posted by Chris Garrett on 7 February 2014