While the benchmark is to spend 2% of small businesses revenue on advertising, in reality, it's really around 1%. The problem is that there are a lot of options when it comes to how and where to spend that money.
One place to allocate funds is for social media ads. That's because 42% of the global population is on social media, and that figure is much higher in advanced economies like the United States (79%), Germany (58%) and Japan (50%). And let’s face it, they’re younger, more affluent and more engaged than the rest of the population. That’s what advertisers call a “choice demographic.”
For instance, those 3.2 billion people globally spend an average two hours and twenty two minutes per day interacting in various ways social media. If you target those consumers in the right way and they have a good experience with you, the “network effect” means many will recommend your brand to friends and family.
Of course, deciding how much to spend on those social media ads can be tricky. At Targetable, we have done extensive research on industry “best standards” for advertising budgets. Because Targetable exists to maximize the impact of marketing spend, we have done an extensive review of the literature out there on how to match advertising dollars with the goals of small business.
Keep reading to learn how to create the perfect social media budget strategy.
Why You Need to Set a Social Media Ad Budget
The goal of any social media marketing effort is to get the greatests return on investment (ROI) with the absolutely minimum in both cash and labor expended.
Setting a budget rather than shooting from the hip (a too common practice, in our experience) helps you avoid impulse marketing decisions. A budget also forces you to compare your results versus how much you spent. Again, approximately $1-to-$2 for every $100 dollars in monthly revenue is a good starting point. By and large, ad industry standards say you should expect after a year of doing this well to have brought in $4 for every $1 you spent. It’s not rocket science. But any benefit that falls much short of that is telling you to adjust your strategy. Here are some elements of a successful small business strategy to consider:
Determining how much money to spend is only one part of a successful social media advertising strategy you need to consider. Equally important is identifying your target audience.
No company has everyone listed as their target market. Even companies like Amazon and Pepsi have detractors they know will never buy from them and so they wisely don’t bother trying.
Start by considering who – realistically – your customers are. Your target market will share certain attributes such as:
You can use this information to determine which social media sites to invest your advertising dollars and how to build a campaign that captures and holds their attention. If you’re a huge global conglomerate with a giant sales force, social media is probably more about brand recognition and thought leadership than finding specific individuals. LinkedIn is the lever of choice for that job since it’s about business-to-business relationships.
As a small business entrepreneur, that’s probably not your best play. You can become a titan in the restaurant industry without a global brand or enterprise clients. Your ideal customer, after all, is someone – perhaps a couple, perhaps a circle of friends or a particular nearby neighborhood – who comes to your restaurant, enjoys it, comes again, and spreads the word to their larger social network. That’s why Facebook and Instagram make the most sense. These are person-to-person platforms. That’s why Targetable leverages the complex advertising capabilities of Facebook and Instagram. Wrangling with their ad platforms is a great way to spend a lot of time and money learning something Targetable already knows: a simple interface will get you to your ideal customer more quickly and waste a lot less of your time.
Knowing what you want to get out of your advertising campaigns helps you develop a successful strategy that stays on budget.
Start by figuring out what your goals are such as:
You may want to determine the exact percentage you'd like to increase your goals by. This will help you tell how successful your campaign really is.
It's imperative you check out what your competition is doing. You want to see what they're doing right and what isn't working for them.
Also, it's a great way to see what area(s) of the market they're neglecting. For instance, if you run a bar in northern New Jersey, there is a constant flow through your business of customers who are fans of the region’s nine professional sports franchises. You can then use that information to create your own specific specials targeting these groups; ½ priced wings for anyone wearing a hometown jersey; special pricing for the 9th inning of every Yankees and Mets game. Creating a niche in your industry and targeting those customers will distinguish you from competitors and create brand loyalty, too.
You want your content to be eye-catching, smart, funny and useful – all at the same time. That’s no easy order. Start with “useful,” because meeting customer demand should be the priority. It’s why your audience bothers to pay attention.
Then you need to transform “useful” into interesting.
Copywriting also includes using specific keywords that your target market are using to find companies like yours. It's not easy capturing and retaining people's attention, especially since they're being bombarded with thousands of ads every day. You may find it's best to hire a professional copywriter to help you send the right message. That may only need to be for a month or two if you’re a quick study but the cost is not great even if you creating a long-term relationship.
Graphics help back up your words. They help to establish you as an expert in your field. Charts, graphs and animations are just what the eye is drawn to on social media.
A picture is worth a thousand words. It's also going to capture someone's attention much faster than the written word. Avoid posting content with bad photography or you're just throwing money down the toilet so you'll need to hire a professional. Also, learn a bit about “rights.” You can’t just take a photo owned by, say, TIME magazine and use it in an ad. They’ll eventually send you a nasty “cease-and-desist” letter because they own those photos. The good news, however, is there are plenty of websites that specialize in “rights free” images, and others where a huge database of slightly better images is available for a small subscription cost.
By 2022, 82% of all internet traffic will be from videos. That's one million videos per second. If you have an awesome nephew who is a videography major at UCLA, good for you. But don’t go half-assed on this. A videographer can be hired for a day to turn out a half dozen or more YouTube videos that will serve your purposes for a year or more. These are resources you can use again and again via the Targetable platform to build campaigns that set your business apart.
Not everyone has the time, the skills or the desire to master social media platforms. That’s why Targetable exists. We find that clients who previously had a professional ad agency on retainer were able to let them go once Targetable was in place.
Targetable uses Artificial Intelligence (AI) to combine lessons. Learned from thousands of individual restaurants. With our innovative tools and proven data, plus the support and service of a customer-driven organization, we provide an affordable way to produce effective localized marketing for restaurants and other small business – all without expensive and time-consuming ad agencies.
It's hard to tell if your allocated spending plan is actually working unless you take a look at the analytics. This way you can optimize your campaigns, measure success, and make necessary changes immediately if something isn't working the way you intended.
You'll want to take notice of how well you're doing with online engagement. If no one is responding, your campaign isn't working effectively.
With Targetable, this is taken care of automatically with Insights. Updated in real time, our Insights are accessed from your phone or laptop and provide clear, actionable data on how your ad campaigns have performed as well as suggestions on what you might do to improve them.
If this all seems like a lot, do not worry: Targetable’s got your back. With our inexpensive solution optimized for your business, we streamline the process of finding new customers and honing your unique business message, at the same time eliminating expensive and time-consuming line items like ad agencies and social media consultants. Let Targetable fuel your growth.
Start advertising smarter, give us one meeting and we'll buy your first ad!