The Business of Paid Social Media

Nowadays, paid social media is absolutely essential for businesses. Almost every business invests in Facebook ads, Instagram ads and other types of digital media buying. It’s the only way to scale your marketing quickly and get the results you need from your efforts. But it’s easy to make mistakes which could end up costing your company millions.

In 2018, CMOs spent more than 21% of their marketing budget on advertising with 66% of that going to paid social media digital channels. That’s a lot of capital, especially since marketing budgets have been decreasing since 2016. Although CMOs are expecting a budget increase in 2019, there’s also an increased expectancy to prove ROI and justify their spend.

So, how can brands be prudent and a successful paid advertising strategy simultaneously?


Define Your Paid Social Media Objectives and Core KPIs

Define your key business objectives first so you know what you want to achieve – Is it to increase brand awareness and start conversations? To spend budget with more efficiency and drive fans to your website? To increase purchases that can be directly attributed to your social efforts? 

Once you’ve set your objectives, start defining your core KPIs. Let’s say one of your objectives is to increase ROI from your paid advertising and save budget. A key KPI to track would then be Cost-per-Click (CPC), which you would try to lower by designing ads that are personalized to your audience, and then targeting those ads more precisely.

You can see in the graph below that CPC has been on the rise, while Click-through rates have been falling. Ideally, it should be totally the opposite way.

For more information on what’s really impacting your social media success, take a look at Socialbaker’s full social media trends report here.


You’ll be testing ad designs and copy, targeting, the time of day you serve the ad, etc, trying to find the sweet spot where the cost comes down and the clicks go up. If you’re going in the right direction, your KPI results will signpost it for you: “Keep Going This Way”.

You might need to tweak strategy along the way, but hey, that’s what data analysis is for.

Connect All Your Owned Ad Accounts in One Place

Stop analyzing data in a silo. Unfortunately, many businesses still struggle with connecting their ad data and seeing the bigger picture. And the bigger, connected picture is always where the brightest, most insightful insights are found.

As with most things in the marketing world, a bit of structure goes a long way to starting brands on the right path and keeping them there.

Marketers spent a sizable 21% of their entire budget on advertising in 2018, so it comes as no surprise that 61% of marketers also ranked improving the ability to measure and analyze marketing impact as a priority.

One of the core challenges facing marketers is proving marketing ROI, it’s vital to have a system in place that allows you to overview accounts together so you can connect the dots and see the full advertising picture and develop a holistic strategy before a budget is unnecessarily wasted.

Align Teams on One Hub For Effective Collaboration

It’s tough to keep local, regional, and international teams aligned on spending when ad budgets are spread across different branches, locations, departments, etc. Communication is difficult and there’s no agility or consistent insight sharing.

If teams are able to analyse and oversee ad accounts in the same place, and have their cost-related data in one currency only, then they can also collaborate smoothly and be totally aligned on spending and actionable insights provided by the connected ad data. It’s easy yet effective way to customize analysis too, and break the data down from a variety of perspectives and make comparisons.

This is how to get your ads teams actually working as one team – get them working together on one unified place, everyone pulling in the same direction towards having successful paid social media.

But what is success? Is success a standalone entity in business or is it relative to what other brands are achieving? Clue: it’s relative.

Use Competitive Benchmarking to See the Bigger Picture

All metrics are vanity metrics when seen in isolation. Nothing exists in a vacuum and that is why businesses need to benchmark, particularly against competitors.

Being able to see and benchmark against your competitors is absolutely invaluable because while you may be hitting performance KPIs, which looks like success, you may be falling behind in the bigger picture.

With paid analytics you can benchmark your performance against your industry, region, or competitors, allowing brands to set performance expectations, identify areas in need of improvement, and tweak strategy in a meaningful way.

Optimize Paid Social Media With AI and Reduce Errors

Budget decisions cannot be made on hunches. Today, with accurate AI prediction models, you can easily gauge where your budget will be best spent, and when you’re running a large multi-platform, multi-regional strategy, it’s really the only way to scale.

The Takeaway

As with most things in the marketing world, a bit of structure goes a long way to starting brands on the right path and keeping them there.

The key things to strive towards with paid social media ads are transparency, clarity, and ease of control. You need to be able to understand your performance in the context of your objectives, overview it all clearly, and control strategy going forward.

In 2018, marketers wasted around 25% of their budget on poor strategy decisions or by using the wrong channels to communicate with their audience.

It’s about getting transparency into your ad data, being able to overview it all with clarity, joining up the dots, and getting the insights you need to have a truly robust and agile strategy that will serve you well into the future.

Charles Tidswell

Charles Tidswell

Charles is Vice-President JAPAC at Socialbakers

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