How Effective Are Social Media Ads?

How Effective Are Social Media Ads?

With increasingly high competition, are social media ads still effective? It depends. Here's why a social media ad won't always pay off.

Social media advertising is a paid advertising method that companies use for marketing. It uses ads directly served to the target audience through social media platforms. These ads come in various formats such as video ads, image ads, carousel, etc.

The effectiveness of a social media ad depends on its execution and how focused the advertising effort is. 

According to Statista, the most popular social media platforms in 2021 are Facebook, Youtube, Whatsapp, and Instagram. These platforms have the highest number of monthly active users (MAUs).

Is advertising on these platforms effective?

Do companies get the desired ROI by spending on these social media platforms? 

Well, it depends.

But before getting into the effectiveness debate, let’s see what do the stats have to say about social media advertising:

What the Numbers Say

3.78 billion people use social media across the globe.

The average social media per day usage rose from 142 minutes to 145 minutes from 2019 to 2020.

Needless to say that the number of users will be increasing even more.

Along with the users, marketers also have picked up the cue. Today, the worldwide social media advertising industry stands at a whopping $48 billion total spend.

Small and medium businesses are adopting social media advertising as their primary advertising channel. For example, Facebook alone has over 8 million active advertisers, most of whom are small and medium-sized businesses.

An average business spends $6,000 to $10,500 monthly on social media advertising. However, only 17% of the CMO’s believe that they can truly quantify the ROI from social media advertising.

We know that social media is gaining popularity with each passing day. With that, marketers are putting advertising efforts on these platforms, but only a few advertisers know the numeric results.

The advertisers may not have the figures, but they can see the growth in their business. Social media users, however, have mixed sentiments about the social media ads they see.

They do not always have positive sentiments for social media advertising. Here's how the social media users see social media ads:

Are Consumers Tired of Social Media Ads?

According to a survey conducted by surveymonkey, 74% of the 1200 US-based consumers think that there are too many ads on social media.

The users find the number of ads to be overwhelming, but they are also tired of seeing the same ads repeatedly.

However, getting tired of the advertising efforts doesn’t limit the effectiveness of social media ads. 

31% of buyers search social media before making a final purchase decision.

So, users may not prefer personalized ads on social media; they will make their own searches to know about a product.

They will go through community-based discussions about products and will consider a social media referral. 

The Problem With Changing Social Media Algorithms

Social media apps run on algorithms to deliver relevant content to users.

The algorithms use user data to show what is most relevant to them.

For example, if you’re an avid social media user, you must know that your Facebook feed only shows the posts of the people you engage with the most.

In the past, Facebook, Twitter, and Instagram, all used chronological sorting of the feed. It means that the most recent stories will show up on your feed first and then the older ones.

Now, these social media platforms have changed their algorithm to show the most relevant content to the user.

The recent algorithm changes of Facebook, for example, emphasize on conversations rather than transactions, and they promote local video content more now.

While the algorithms make social media more convenient for the users, they are a problem for advertisers.

The brands struggle to keep pace with the changing algorithms.

Other than the pace, the algorithms limit the reach of the ads. A limited reach means that the advertiser will have to pay more to get more visibility on the platforms.

Advertisers are also under scrutiny for breaching the privacy of social media users to tailor their advertising campaigns.

Users believe that social media platforms breach their privacy to present tailor-made ads, and the notion is not entirely incorrect.

However, the privacy issues are much under control with implementing acts like GDPR and CCPA.

Which Platform is Best for You?

(Image Source: pewreserch.org)

The above image shows the demographic segmentation of social media users in the US.

The platforms shown include Facebook, Instagram, and LinkedIn.

Facebook

For Facebook, most men and women who use the platform lie under the age bracket of 30-49 years.

Thus advertisers who are targeting millennials and generation X should specifically focus on Facebook advertising.

Instagram

71% of the US Instagram users fall in the age bracket of 18-29 years. It means that the advertisers who want to target millennials and generation Z should hang around more on Instagram than on Facebook.

LinkedIn

LinkedIn has 36% of users falling in the age bracket same as Facebook users. However, LinkedIn appears to have a much more diversified (age-wise) audience as compared to the two social media platforms.

As such, LinkedIn may prove to be a challenging platform for age-based advertising.

(Image Source: pewresearch.org)

The image above shows the demographic breakdown of three other social platform users of the US. Here are some more insights:

Twitter

Just like Linkedin, Twitter also seems to have a diversified user age. However, if you want to advertise on Twitter, make sure your target audience falls under 18-29 years of age.

Pinterest

While most of the platforms have a pretty head-to-head male-to-female ratio, Pinterest seems to be dominated by women aged 50-64 years.

This makes it easier to predict their creative preferences. So if you have something to sell to older women with great creative sense, use Pinterest for advertising.

Snapchat

Snapchat’s audience coincides with Instagram’s.

The platform’s major age bracket is 18-29 years, so advertisers are looking at millennials and Generation Z overlap.

We have considered only two demographic factors of age and gender. There are other ways of classifying and identifying your user persona, such as income, nationality, education, etc. Make sure whatever factors you consider while setting up your social advertising campaigns should match your user persona.

How to Make Social Media Ads That Sell

Now that we have discussed what platform is best for you, let’s discuss the secrets to making a successful social media ad.

  • Set a Goal

Before running your social media advertising campaign, ask yourself, “what’s the objective of this ad.” For example, do you want to get a high reach on a specific post? Or do you want to promote your business? Or do you simply want to get more traffic on your website? This will help you formulate your advertising campaign, and you’d be able to make a relevant ad.

  • Set Your Target Audience

The next step is setting your targeted audience. Decide what audience will be the most relevant for your ad. Whether it’s for kids, teenagers, homemakers, athletes, or any other person.

  •  Make a High Quality and Eye-Catching Post

Seriously, what use is your advertising campaign if your post is absurd and irrelevant? If you’re posting a picture, make sure its quality is up to the mark and not vulgar. Also, make sure it delivers some message and is relevant to your audience. Be mindful that users are likely to report your ad if it’s vulgar or irrelevant.

Social Media Campaigns That Took The Internet By Storm

Here are some examples of the most engaging social media campaigns that companies came up with:

1. Distance Dance

distance dance

(Image Source: insider.com)

One of the pandemic’s most viral social media campaigns was initiated by P&G. The FMCG giant decided to create awareness about social distancing excitingly. So they hired a TikTok star named Charli D’Amellio, who encouraged people to stay home and maintain social distance with her dance moves.

The social media campaign also had a fundraiser attached to it that helped countries that got hardly hit by the Pandemic.

2. Starbucks What’s Your Name

starbucks gender diversity campaign

The coffee giant Starbucks UK came up with a heartfelt social media advertising campaign in collaboration with an organization named Mermaids. The organization works for transgender and gender-diverse people.

The ad campaign shows a teenager’s struggle, Jemma, who wants to reveal to the world that he is James. The kid finally declares it in a Starbucks outlet by writing his name on his coffee cup from Starbucks.

The ad campaign won the Diversity in Advertising award 2019 due to the brilliant execution of inclusiveness of gender diversity.

Bottomline

Social media is a hardcore reality of the digital world. With staggering numbers representing the usage, no marketer can deny its importance. However, while social media platforms are excellent advertising platforms, they can have their set of challenges as well.

There are no sure-shot estimates of how social media ads are effective, but the companies using the platforms correctly reap the benefits. They currently may not fully gauge the results, but they can see the growth that comes with correct social media advertising strategies.

Mandy Schmitz is a freelance consultant and project management expert with 10+ years of experience working internationally for big brands in fintech, consumer goods, and more. Join her on Changeaholic.com to learn how to optimize your business operations and find the latest reviews of ad targeting tools.

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