What Is Social Media Advertising? Definition, Costs, Best Practices, Benefits, and Examples

Social media advertising is the go-to advertising method for brands to reach their audience. Learn about its costs, benefits, examples, and best practices.

What Is Social Media Advertising? Definition, Costs, Best Practices, Benefits, and Examples

Last Updated: November 24, 2022

Social media advertising is defined as a form of digital advertising that serves paid ads to your target audience using social media platforms such as Facebook, Twitter, Instagram, LinkedIn, and Pinterest.

In this primer, we look at the basics of social media advertising, how much social media ads cost, their benefits, and five best practices to help you run successful social media ad campaigns.

Table of Contents

What Is Social Media Advertising?

Social media advertising is an offshoot of digital marketing where paid ad campaigns are run on social media platforms to reach target audiences. Marketers and advertisers can promote their brands and inspire sales through the social channels that users frequently use.

Consider the following social media advertising statistics:

  1. 26% of users who click on Facebook ads end up buying the advertised product (SourceOpens a new window )
  2. 7 million+ businesses use Facebook for advertising (SourceOpens a new window )
  3. According to the CMO surveyOpens a new window , brands will almost double their budget allocated to social media advertising by 2023.

These compelling stats provide a clear picture of how integral social media advertising has become for organizations to grow their business.

While scrolling through the Facebook news feed, you might have come across a post with a label that says Sponsored like this:

facebook ad

Example of Facebook Ad

This is social media advertising in action.

In the online world, it is getting increasingly complicated to get your message noticed, as user attention is increasingly becoming a scarce resource. Social media advertising is significantly impactful as it allows you to deliver your message to your ideal buyers throughout their purchase journey. For instance, before the release of a new product, a B2C brand can run a brand awareness campaign to garner pre-buzz. Similarly, a B2B organization can re-engage their audience through remarketing campaigns to sell a high-ticket product.

Social media advertising distinguishes itself from traditional advertising with sophisticated targeting capabilities. Traditional advertising adopts the carpet-bombing approach, wherein brands deliver ads to the maximum people possible, regardless of whether they’re interested or not. Social media, on the contrary, enables brands to connect with the ideal buyers based on their geographic, demographic, psychographic, and behavioral characteristics/traits.

5 Key Components for Social Media Advertising

A successful social media ad effort consists of the following five components:

1. Campaign Overview

The campaign overview throws light on the elements of social ad campaigns:

1. Campaign Outline: The campaign outline provides elementary details of the ad campaign. It contains the campaignOpens a new window name, ideas/inspiration, details (such as purpose and goals, how it will help meet your company objectives, etc.), hashtags, and any such information.

2. Objectives: What are you trying to achieve through the campaign? Here are a few ideas:

a. Brand awareness
b. Increase social media following
c. Increase sales of Product X
d.Drive website traffic
e.Push store visits

Quantify your goals/objectives as it will allow you to measure the right metrics and calculate the ROI for the campaign.

2. Target Audience

Be as specific as you can when it comes to choosing the right target audience. Dig into the analytics section of your social media accounts/pages to understand your audience and the type of content they are most receptive to. Visit your buyer persona templates to identify the most relevant characteristics and traits.

Finally, create test campaigns on different platforms to know what type of audience you can reach out to based on the filters applied to define the target audience. Most platforms give you an approximate number of people you can reach through an ad campaign. Tweak the characteristics accordingly, so your targeting doesn’t get too niche or too broad.

3. Campaign Creatives

Campaign creatives are ad copies (messaging) and visuals (images, gifs, and videos). The campaign creatives should be prepared by taking into account the target audience and platform guidelines. For example, visuals with too much text don’t perform well on Facebook. The same audience visits different platforms with a different mindset. Therefore, it is advised to customize the creatives for each platform. You can run A/B tests by tweaking the copy and visuals to optimize the performance.

4. Social Media Platforms

The most widely used platforms for social media advertising include Facebook, Twitter, LinkedIn, Instagram, Pinterest, Snapchat, TikTok, and YouTube. Different social networks serve different audience segments. For example, Pinterest may not be the best choice for a B2B business or a fast-moving consumer goods (FMCG) brand may not drive a successful awareness campaign on LinkedIn.

Choosing the right social media platforms will help you determine the budget, ad format(s), and tailor the campaign messaging for individual platforms.

5. Campaign Budget and Success Metrics

It helps to break down the campaign budget into two brackets to track the ROI effectively:

  1. Fees/Expenses: If you are working with a social media advertising agency, you need to keep their fees separate from the actual budget. You will, however, include the payments made to third-party individuals such as a copywriter, graphic designer, or video editor, and money that you spend to purchase stock images, videos, or software.
  2. Ad Budget: This includes the money that you’ll actually pay the platform to run the ad campaign.

Deciding the ad budget can be a bit tedious, especially if you’re a beginner, so here’s how you can determine the budget to run ads. Let’s say you need to generate 20 leads through a lead generation campaign. Through research, you find out that the cost per lead (CPL) on Facebook is $10. So, the initial budget for the campaign would be $200. Considering the volatility of the bidding process, you can slightly increase the ad budget. As you execute the campaign, keep tweaking the bid to optimize the ad spend.

Once your ad campaign is complete, you will be able to see how it performed in all entirety. Map the goals achieved against the goals set, in terms of reach, engagement, link clicks, likes/follows, shares, profile clicks, etc. You can then measure how well the campaign performed and the ROI from it.

Top 5 Social Media Advertising Platforms

In this section, we will look at major social media platforms that you can use to run ad campaigns, along with some examples to inspire you.

1. Facebook

Facebook offers comprehensive advertising options for brands that enable them to run ads across awareness, consideration, and conversion stages of the buyer’s journey, with each stage offering multiple ad types to reach the goal.

  1. Awareness: Brand awareness, reach
  2. Consideration: Traffic, engagement, app installs, video views, lead generation, and messages
  3. Conversions: Conversions, sales, and store traffic
facebook ad types

Facebook Enables Different Ads Types Depending on Their Objectives

Facebook’s audience targeting allows you to target users based on criteria such as age, geography, income groups, interests, work/profession, and so on. Brands can diversify their audience base through custom and lookalike audiences.

Facebook currently supports the following ad formats:

  1. Video: Brands can promote video ads up to 240 minutes in length. However, top-performing video ads tend to be short.
  2. Images/Photo: Brands can drive engagement through photo ads.
facebook photo ad

Example Photo Ads on Facebook

  1. Engagement Posts: These ads help you drive brand awareness, wherein your posts are boosted to garner more likes, comments, and shares.
  2. Page likes: You can run image and video ads to increase likes to your page and build your online community.
  3. Collection: Collection ads feature a primary image/video along with four images arranged in a grid below the primary media. After clicking on the ad, the user is taken to the product page. The post-click sequence is powered by Instant Experience, and therefore, the user can view the landing page without leaving Facebook or Instagram.
  4. Carousel: Allows brands to feature up to 10 images or videos within a single ad, with each image/video consisting of a different link.
facebook carousel ad

Example Carousel Ad on Facebook

  1. Slideshow: Using Facebook Ad Manager, brands can create a slideshow video from a bunch of photos. Facebook allows brands to add motion, text, and sound to these videos.
  2. Instant Experience: Previously known as Canvas, Instant Experience ads are interactive, mobile-exclusive ads that can have 20 images or videos up to 2 minutes long.
  3. Lead generation: Lead gen ads enable brands to collect information from users who are interested in their offerings. These ads are available on Facebook and Instagram and can host the image, video, and carousel formats.
  4. Offers: Businesses can offer discountsOpens a new window to their customers using image, video, collection, and carousel ads.
  5. Event responses: Brands can drive awareness and boost RSVPs to their events posts using image and video ads.

How Much Do Facebook Ads Cost?

According to 2018 data by AdEspresso, the average cost per click (CPC)Opens a new window is $0.94. The CPC will vary depending on the industry and competition. Here is the detailed breakdown of the CPC based on campaign objectives:

facebook avg cpc

The Average CPC for Facebook Ads Was 0.94% In 2018 (source: AdEspresso)

2. Instagram

Instagram offers ads that are similar to Facebook, and you can manage ads for both platforms through the same interface – Facebook Ad Manager.

You can target people on Instagram based on their location, demographics, interests, and behavioral characteristics. Instagram also lets you create custom and lookalike audiences to find new users that share similar characteristics to your ideal buyer.

You can target users across their buyer journey through the following ad types on Instagram:

  1. Awareness: Reach, frequency, brand awareness, and local awareness
  2. Consideration: Website clicks, video views, reach, and frequency
  3. Conversion: Website conversions, dynamic ads, mobile app installs, mobile app engagement

Instagram allows you to run ads in the news feed and the Explore tab. Here are the five ad formats currently available on Instagram:

1. Stories ads: You can use images or videos to run ads on Instagram stories. Users are redirected to the landing page after swiping up on the ad.

instagram stories ad

Example Stories Ad on Instagram

2. Photo ads: Like Facebook, Instagram photo ads help you drive specific actions such as engagement, link clicks, or conversions.

instagram photo ad

Example Photos Ad on Instagram (source: Instagram)

3. Video ads: You can run video ads that are up to 60 seconds long in the square or landscape format.

4. Carousel ads: These ads let brands feature multiple photos or videos in a single ad that users can swipe through.

5. Collection ads: Collection ads showcase a primary photo or image along with secondary images arranged in a grid. These ads are similar to the collection ads on Facebook.

instagram collection ad

Example Collection Ad on Instagram (source: Instagram)

How Much Do Instagram Ads Cost?

A 2017 study by AdEspressoOpens a new window reported that the average CPC on Instagram across different industries was $0.94, and it saw a continual rise in the CPC as the year progressed.

3. Twitter

Similar to the platform, Twitter’s advertising solution is pretty straightforward. It currently offers the following types of ads:

  1. Tweet engagement
  2. Promoted video/GIF views
  3. Brand awareness
  4. Website clicks or conversions
  5. In-stream video views
  6. Build followers
  7. App installs
  8. App engagements

Besides this, brands can also promote a specific hashtag to drive brand awareness. This feature is suitable for large B2C corporations and entertainment brands as a pre-launch and awareness tactic.

Ads on Twitter appear in the news feed and the search section. Here is an example:

twitter promoted ad

‘Promoted’ Appears Below Paid Ads

How Much Do Twitter Ads Cost?

Here are the average costs for different types of Twitter ads:

  1. Tweet engagement ads: $1.35 for a click, retweet, or reply
  2. Build followers: $2-$4 per follower
  3. Promoted trends/hashtags: $200,000 per day
  4. Promote Mode: This feature automatically promotes your tweets and profile to get more followers at a flat rate of $99 per month.

4. LinkedIn

LinkedIn is a business-oriented platform and brings opportunities for brands and individuals alike to promote themselves. The targeting options on LinkedIn are different compared to Facebook and Twitter and primarily revolve around professional criteria such as education, organization size, sector, job title, etc.

Here are three main types of promotions on LinkedIn you can run on LinkedIn:

  1. Sponsored ads: Sponsored ads appear in the news feed of LinkedIn users on desktop and mobile devices and offer similar ad types similar to Facebook across the awareness, consideration, and conversion stages of the journey.
linkedin ad newsfeed

A LinkedIn Sponsored Ad in the News Feed

  1. InMail: This feature is available to premium LinkedIn users, where they can send individual emails to users who are not in their network. Premium users can send 5 to 30 InMails per month depending on the plan, and each response restores one InMail credit in their account.
  2. Sponsored InMail: Sponsored InMail combines the best of email marketing and LinkedIn’s targeting capabilities. Sponsored InMails land straight to inboxes of the active LinkedIn users. This feature is useful to drive conversions such as boosting content downloads and increasing conference attendance.

How Much Do LinkedIn Ads Cost?

The average CPC for LinkedIn’s sponsored ads revolves around $2-$5. Higher the click-through rate (CTR), cheaper the CPC

The average cost per send for Sponsored InMail is $0.75-$0.80

5. Snapchat

Snapchat is famous among the millennials and Gen Z audience and therefore favors content that is casual and fun. The social media platform supports the following ad objectives:

  1. Awareness: Branding
  2. Consideration: App installs, app traffic, website traffic, engagement, video views, and lead generation
  3. Conversion: Website and app conversions, catalog sales

Here are six types of ads on Snapchat that help brands achieve their objectives:

  1. Snap ads: These ads appear in the stories and can drive users to your website, app, app store link, or video after swiping.
  2. Collection ads: These ads are like those on Facebook and Instagram where the ad showcases four thumbnails with one distinct link per thumbnail.
  3. Story ads: Story ads appear in the discovery tab among other stories.
snapchat story ad

Example of Story Ads (source: Snapchat)

4. AR lens: Brands can create customized AR lenses to deliver unique experiences to Snapchat users.

AR lens

Example of AR Lens

5. Filters: Filters add an overlay of a sticker or some creative design to the image and video.

6. Commercials: There are six-second, non-skippable videos within Snapchat’s premium content.

snapchat commercials

Example of Snapchat Commercials

5 Social Media Advertising Best Practices

In this section, let’s look at some best practices to optimize your social media ad campaigns:

1. Experiment on Organic Content First

Before trying something new in your ad campaign posts and creatives, experiment with it on your organic posts. If something works on the organic posts, we can assume that it will work with paid ads too as the target audience is fairly the same.

Once you know what works, you can experiment with the finer details while you’re running the campaign through A/B tests.

2. Get Ultra-Specific With Audience Targeting

Social media advertising is powerful because of its targeting capabilities. You can target people based on where they live, the type of content they consume, the places they visit, and so on.

Since paid campaigns are highly goal-oriented, you can maximize results by getting ultra-specific with the audience. Get as granular as you can. The narrower you go, the better the performance will be. Once you start getting results, you can increase audience numbers using the lookalike audience feature.

3. Create Multiple Ad Creatives

The success of your campaigns depends largely on the ad creatives. To maximize the chances of success, hedge your opportunities by creating multiple ad creatives. It isn’t about running A/B tests. You can create two (or more) entirely different creatives for the same campaign. You can use distinct ad copies and visuals altogether. The social media platform will push the ad that is bringing results to optimize the ad spend.

4. Design Attention-Grabbing Creatives

Social media users are often passive scrollers. They keep scrolling through their news feeds until something catches their eye, which means you’ve got a split second to catch their attention. This requires you to design something so striking that they’ll be compelled to scroll back to view your ad.

You can play around with colors, icons, or fonts to grab their attention. Similarly, you can write irresistible but relevant headlines that will entice them to click on your ads.

5. Harness the Power of Remarketing

It’s unlikely that people will remember you in a single interaction. A visitor may have landed on your blog post to solve their problem but could be completely oblivious to your brand. In such cases, you can use remarketing to reintroduce yourself. Remarketing campaigns are effective not just to serve as a reminder but also to build trust and strengthen the brand recall.

5 Benefits of Social Media Advertising

Social media advertising helps marketers drive brand awareness, engage their audience, and drive conversions. One of the biggest advantages of social media advertising is the precise audience targeting. Here are five other benefits of social media advertising:

1. More Control Over Your Ads

The problem with traditional advertising is that you can’t control the outcome once your ad goes live. With social media advertising, you have control over the campaign on a granular level. You can tweak the budget, targeting, creatives, and delivery on the go. This gives marketers a higher sense of control and provides multiple opportunities to optimize the campaign on the fly.

2. Innovative Ad Formats

The social media advertising landscape is constantly evolving. New targeting capabilities and ad formats are frequently introduced. Carousel ads, lead gen ads, canvas ads, etc. were non-existent a few years back, but brands now largely rely on these ad formats. This innovation allows marketers to experiment and iterate.

Also, different ad formats support different goals. For instance, carousel ads are useful in the brand awareness stage, while lead generation ads are effective to gauge the receptiveness of a lead.

3. Reach Qualified Customers

You know who your buyers are. It’s not feasible for brands operating on a shoestring budget to spend an exorbitant amount of money on running paid campaigns. Although social media is not exactly cost-effective as many claim, it certainly allows you to run ads to a specific segment of your audience. Using features such as custom audience or remarketing, you can run ads that are visible exclusively to users that are aware of your brand and need only a nudge to buy from you. Oftentimes, social media advertising is that nudge.

4. Boost Conversion Rates

Every business is trying to optimize its conversion rate. They implement various growth hacks to do just that. A surefire alternative to boosting conversion rates is social media advertising. Designing social media ads that tell users what to expect on the following landing page is proven to increase conversion rates.

5. Sophisticated Tracking Mechanism

Social media advertising tracks every single impression, click, and conversion on your ads. This tracking mechanism quashes the need for the spray-and-pray approach, where your actions are often based on your intuition. Social media advertising thrives on data; therefore, the decisions are guided by what’s working and not by your gut feelings.

Closing WordsSocial media advertising is a rapidly evolving field, with newer and more effective ways to target and influence your audience. There is no doubt that it is one of the most impactful ways to drive genuine engagement and conversions.

The majority of your customers are on social media, and that allows you to adopt a more nuanced approach to advertising – one that tailors the content based on individual preferences, interests, and behavioral traits.

How do you plan to approach social media advertising in 2020? Share your thoughts with us on LinkedInOpens a new window , FacebookOpens a new window , or TwitterOpens a new window .

Indrajeet Deshpande
Indrajeet is a Marketing professional with 6+ years of experience in managing different facets of Digital Marketing. After working with SpiderG - a Pune based SaaS startup, he is now ready to work as a freelance marketer with different SaaS startups helping them with marketing strategy, plan and execution. His love for old-school hard rock and metal music culminated in taking up guitar and starting www.guitargabble.com. He is studying Stoic philosophy, experimenting with productive habits and documenting the progress. Get in touch if you are keen to know how you can implement pro-wrestling tactics in your marketing, community building and storytelling
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