You’ve heard you should be advertising on social media and you’ve seen everyone doing it. But is it really worth it? How much does advertising on social media cost? How much do companies spend on social media advertising on average? And should you go with an agency or go the in-house route?
Here’s everything you need to know about advertising on social media. We’ll make the whole thing simple for you and make a case for why advertising on social media is worth it.
How Social Media Channels Make Money On Advertising
Social media channels make money on advertising by leveraging their vast user bases and sophisticated data analytics to offer targeted advertising solutions.
Here’s a closer look at how they do it:
- Targeted Ads: Using algorithms to deliver ads based on users’ interests, behaviors, and demographics.
- Ad Formats: Offering various ad options like sponsored posts, display ads, and video ads to suit different marketing goals.
- Auction Systems: Running ad auctions where advertisers bid for ad placement, maximizing revenue.
- Data and Analytics: Providing detailed performance metrics to help businesses optimize their campaigns.
- Promoted Content: Allowing users to pay to promote their posts for wider reach.
- Subscription Models: Offering premium subscriptions with enhanced advertising features and better targeting tools.
Agency vs In-House
Should you go with an agency or do in-house social media advertising?
You might think you’re saving money by doing advertising the in-house way or going with consultants, but there are other costs to consider. In-house social media advertising will require constant training on evolving social media trends, recruitment, salaries, and management overhead. Your in-house team may lack the resources, experience, skills, and tools that agencies offer.
Hiring agencies offers several cost-saving advantages:
- Expertise: Agencies have skilled professionals who can create effective strategies quickly.
- Resources: Access to premium tools and software that enhance campaign performance.
- Scalability: Flexibility to scale efforts up or down based on your needs.
- Time Savings: Frees up your internal team to focus on other critical tasks.
So what should you expect as far as costs? Just looking at a one-month digital marketing campaign, you’ll either need to put in 40 hours of work in-house or spend around $6,000 for an agency to do it.
As you’re looking at the decision, factor in the upfront cost as well as the cost in terms of time and resources and the benefits of skilled strategies that bring total cost down in the long run.
Want a more exact quote? Send us a message at Wallaroo.
How Much Do Companies Spend on Social Media Advertising?
Companies spend varying amounts on social media advertising, with larger companies like Coca-Cola, Nike, and Procter & Gamble investing millions annually, while smaller businesses typically spend between $500 to $50,000 per month.
It’s commonly recommended that companies allocate 10-15% of their total marketing budget to social media advertising to effectively reach their target audiences. However, a survey in 2023 showed that marketers were commonly putting 17% of their budget toward social media marketing.
Overall, companies are spending billions of dollars on social media marketing. In 2023, social media ad spending was at 270 billion dollars, and it’s expected to to pass 300 billion in 2024. Facebook is where the majority of the money goes, followed by LinkedIn and Pinterest.
How Effective is Social Media Advertising?
Social media marketing is quite effective. As of mid-2023, social media platforms contributed an average global online shopping order value of $87.5 billion.
Beyond the dollar value, there’s a host of other benefits to social media advertising (most of which also lead to increased revenue):
- Increased Exposure: Reach billions of users with targeted ads on platforms like Facebook, Instagram, and Twitter. Algorithms ensure ads reach relevant audiences, maximizing exposure.
- Increased Traffic: Drive significant traffic to websites and online stores through engaging ad formats. Shopping features like Instagram Shopping and Facebook Shops streamline the purchasing process.
- Lead Generation: Capture leads directly through forms and call-to-action buttons in ads. Utilize promotions and contests to gather contact information and encourage conversions.
- Direct Communication: Engage with customers in real-time, addressing feedback and building relationships. Highlight user-generated content and customer reviews to enhance credibility.
Wallaroo Case Studies
How can an agency help a brand truly take advantage of the opportunities social media advertising offers? Here are some Wallaroo case studies to show you what’s possible and get you excited about social media advertising.
Vessi
Vessi, a brand that specializes in waterproof shoes and other outdoor gear, approached Wallaroo with a need to grow on Snapchat and TikTok to add to their presence on Facebook, Instagram, YouTube, and Google. Wallaroo created consistent high-quality content for Vessi, worked with influencers, organized giveaways, and more. These efforts led to the account going from 2k followers and 50k likes to 90k followers and 1.3M likes—not to mention that 25% of total revenue from that time came from Wallaroo’s efforts.
Even TikTok was thrilled about the success. TikTok Brand Partnerships Manager Katie DeNero said, “Our Product & Brand Strategy teams have been touting Vessi’s content with @kallmekris internally as best-in-class examples of ‘making TikToks, not ads.’ To say the least, everybody is hyped — they’re some of the best examples we’ve seen to date.”
Little Caesars
Little Caesars didn’t need help with brand recognition when they partnered with Wallaroo. They did need help with managing local social media ads for locations in Iowa and Washington to bring in traffic for local stores, get a stronger online presence, and alert locals to deals.
Wallaroo was able to reach over 3.9 million users on Facebook and Instagram which led to 1,000 extra monthly website visitors on average and a 79% decrease in the cost of bringing viewers to the website.
Let Wallaroo Guide You Through Social Media Advertising
Let’s work together to get your business scaled on social media and get all the benefits social media has to offer. We offer paid advertising services, SEO, design, content creation, and more.
