Credits: Marketing Quotes
Three months ago, a client of ours – then a prospect – spent N500, 000 on a radio ads on a popular station in Lagos.
They were promised a reach of 12 million listeners are peak period!
What does that even mean?
In case you’re wondering, the radio station meant the following:
- “We will bring you on air when most of our audience listen.
- Our audience is undefined and all inclusive – men, women, children, employed, unemployed, under-employed, who may or may not need your products.
- We cannot track the impact of the N500, 000 you spend.
- We cannot guarantee you any sales.
- Our strategy to sell your product is just to hope people will hear and buy, goodluck!”
Is that how you would want to invest your advertising budget?
Well, first of all hope is NOT a strategy!
Secondly, with traditional advertising platforms like the billboards, flyers, radio and TV, returns on ad spend, ROAS are difficult or next to impossible to measure and John Wanamaker and other advertisers knew that….but not anymore.
Today, by just inserting tracking codes from a social media platform on to your website and sending targeted traffic from the platform to the sites, conversions of any type can be tracked and every kobo or dollar of your advertising budget can be measured and necessary changes made.
Despite this amazing feat, the cost of Social media ads have kept going up gradually.
The question on the minds of those advertising on these platforms is “How much do Social Media ads cost in 2018?
My agency helps companies with digital marketing and social media advertising is one of the key pillars and we always get the question above.
Clients want the best Return on Ads Spend, ROAS and always wonder if they’re paying the right amount for each click or impression – forgetting that digital ads are by far cheaper than traditional ads like TV and radio ads.
In this post, we have taken up the challenge to get data from different sources to answer this question and find out the average cost of ads is on the FANTASTIC 4 – LinkedIn, Twitter, Facebook and Instagram.
This article will break down benchmarks for what an average social media advertiser should expect to pay in Cost per click (CPC) and Cost per mille or 1,000 impressions (CPM) on each member of the fantastic 4 in the remainder of 2018.
Enjoy the read!
I assume that the reader understands how to use these platforms to advertise – especially to target your audience well and how to bid because get the right results on each of these social platforms are based on an auction process and proper targeted.
Other General Cost Determining Factors
The other factors that will influence what an ad will cost you on LinkedIn, Twitter, Facebook and Instagram are:
Ad relevance to Target Market
Quality of Ad Copy/Images
Number of users
Time of Day
So for example, if you work in the retail or travel and hospitality industry, expect to pay to pay the lowest CPC on Facebook.
If you are in the customer services or finance industry, expect to pay the highest CPC.
See the graph below for a rough estimate of what marketers in various industries are paying on Facebook.
Meanings of CPC and CPM defined on LinkedIn, Twitter, Facebook and Instagram
LinkedIn CPC and CPM
LinkedIn has its way of calculating CPC and CPM.
An impression on LinkedIn is counted when an ad is “visible for at least 300 milliseconds with at least 50% in view on a member’s device screen or browser window.”
On the other hand, if you’re paying for your LinkedIn Ads on a CPC basis, you will be charged for clicks on the content of your ad, your logo and your company name.
Twitter CPC and CPM
Image Credits: Twitter
Facebook CPC and CPM
On Facebook, most ad costs are measured in CPC or CPM.
If you are running ad campaign objectives like traffic to your website, you would pay per click.
For objectives like brand awareness, payment will be per one thousand impressions.
Instagram CPC and CPM
As you can see, each social media platform counts clicks and impressions differently. This determines how CPC and CPM are calculated and gives some clarity on the differences in average CPC and CPM across LinkedIn, Twitter, Facebook and Instagram.
E’g. if LinkedIn requires at least 50% of it to be visible while on Twitter any part of your ad being on screen counts as an impression, then it is understandable for LinkedIn to charge a little more per mille (or thousand impressions) since they’re selling impressions that are more defined aka more value for brand awareness on average.
Keep these variations in mind when viewing the graphs below—higher average ad costs don’t necessarily mean lower ROI.
What is the Average CPC on LinkedIn, Twitter, Facebook and Instagram?
From the above, LinkedIn at $5.61, has a much higher CPC than the other three Social media Ads platforms.
This doesn’t mean that LinkedIn’s ads are too pricey however.
Instead, it reveals that because of the highly educated professionals available to advertisers, clicks are highly valued on B2B-professional platform.
Facebook has the lowest median CPC of all four platforms at $0.51, followed by Twitter at $0.53.
What I find amazing is that at $1.28, every click on Instagram is more than 2X the price of a click on Facebook or Twitter.
This likely shows the high value of and major competition for clicks on Instagram.
What is the average CPM on LinkedIn, Twitter, Facebook and Instagram?
Interestingly, the median CPM on each social media platform has little relation to its median CPC.
Impressions on Twitter are cheapest on average at $5.76. This might not be unrelated to their wide definition of what they count as an impression.
CPMs on LinkedIn and Instagram come second and third respectively at $6.05 and $6.70.
Facebook’s ad costs have been increasing significantly since I placed my first ad in 2011. it seems that their ad space has become more limited.
That may be why they’re focusing on monetizing Instagram and Facebook Messenger to increase their network of potential ad placements and consequently increase ad revenue.
Squeeze Every Cent (or Kobo) from Your Ads Budget
Now back the story of my client.
After poor returns from radio ads, they finally decided to give us a call. Now, note that this company, we had pitched earlier in the year!!
Within a month of investing a quarter of their N500,000, they had increased sales by 7 times!
4 Quick Steps to Reduce Ad Costs on LinkedIn, Twitter, Facebook and Instagram
Now that you have a sense of what a typical advertiser with a broad audience pays for clicks and impressions on each social media platform, you’re probably wondering about something else: how can you get away with paying less?
LinkedIn: See that you use the matched Audiences feature. This enables you to target users who have been to your website, are in your contact lists, or work for a specific company. When you target with Matched Audiences, you can raise CTR 30 to 40% on average compared to standard targeting. This makes your ads more efficient in terms of cost.
Twitter: Set a manual bid for your ad. With automatic bidding, Twitter will surely help you win ad auctions but you risk paying a higher price than you’re likely to pay. So start with a low maximum bid like $0.50 per click, then increase it gradually if your ads are delivering. Of course this figure varies based on who you are and what you’re advertising.
Facebook: Cap your bids on Facebook. The FB algorithm does not know what a click or an impression is worth to your brand – that is for you to evaluate, so don’t bid so high that you’re getting negative ROI. When you lower your maximum CPC or CPM bid on Facebook, the alogrithm attempts to find cheaper clicks and impressions for you so it can keep delivering your ad.
Instagram: With Instagram set a lifetime budget rather than a daily budget for your ad campaign. This lets Instagram’s ad algorithm find the cheapest times and days to show your ads. This will lower your CPC/CPM.
Olusegun Adedokun is a student who learns by mainly by observation and trial and error. He is also a social media advertiser, trainer, and content creator.