Is Your Paid Advertising Spend Optimized?

Oct 22, 2021

Paid advertising

"Big ideas come from the unconscious. This is true in art, in science, and in advertising. But your unconscious has to be well informed, or your idea will be irrelevant. Stuff your conscious mind with information, then unhook your rational thought process.” – David Ogilvy

Paid Advertising is booming. Paid ad spend in 2019 itself was as high as $135.9 billion. That's only meant to increase as Statista predicts a YoY growth of 11% through 2021.

Around 58% marketers consider social media advertising to be an important part of their marketing strategy. That's understandable, as 71% of customers who had a positive experience with a brand on social media are likely to recommend them.

We're here to discuss if your paid advertising spend is a success for which we will understand the dynamics of paid advertising backed with solid stats. What are the dynamics?  

  • Amplifying content through paid advertising to increase engagement and drive leads.
  • What is the ROI of your paid advertising efforts?
  • How does that ROI compare amongst different channels? 

Every B2B agency takes a unique road to success. Similarly, every agency has a unique need for their marketing success, which is why what works for one business might not work for the other. Let’s discuss what are the various channels for paid ads and how ad spends can be optimized for better ROI.

Ideal Budget for Paid Advertising

A CMO survey broke down the percentage of budget spend on social channels for B2B companies: 15% to 25% of the digital marketing budget. 

Most businesses spend $200 to $350 per day on social media advertisements.

But what is the ideal spend on paid advertising on social media? A ratio of 5:1 will be called a good spend. For every dollar spent on marketing, five dollars earned in sales is a good paid advertising ratio. 

LinkedIn: Go-to Product for B2B Marketing

With 660 million professional users, LinkedIn has emerged as the go-to product for B2B marketing. With around 10 million C-level executives, LinkedIn is the preferred choice of 80% B2B marketers to generate marketing leads.

LinkedIn provides two advertising options: self-serve ads and LinkedIn partnered solutions, both very efficient. The LinkedIn self-serve ads, which come with different types of ad formats, are cost-effective starting at around $10 a day.

Paid advertising on LinkedIn differs as per the type of advertising campaign you choose. A PPC campaign may cost up to $2 to $6, depending on your budget and keyword competition. If you have a budget of $10 for five days, LinkedIn would charge you up to $60 as ads aren’t reported in real time.

The best way to optimize your agency's LinkedIn paid advertising spend is to set your goals, use concise headlines, include CTA, use high-quality images, and run A/B tests. 

Facebook: The Biggest Social Channel

Facebook takes the biggest social channel with over 2.24 billion users, which is why it is most popular among marketers when it comes to gaining ROI. About 86% of marketers are using Facebook for their marketing efforts. How to optimize the Facebook ad spend? 

The average CPC (cost per click) on Facebook in 2016 was between $0.20-$0.80. Engagement and relevance have a direct impact on your Facebook advertising costs. Higher the relevancy, lower the CPC and higher the click-through rate.

Demographics play a vital role in Facebook’s ad pricing. Analysis finds Facebook ads cost more to target the 55-64 age group than to target people between 18-24. Also, women on Facebook are costlier to target as compared to men.

Another important factor that decides your ad performance is the ad frequency. Though the frequency of an ad depends on the budget of your ad campaign, it is an important metric that offers answers to ‘why’ an ad has performed the way it has. It also helps avoid banner blindness and ad fatigue. 

One might also want to look into the type of Facebook ad. An important observation is that Facebook is the most popular channel for 81% of B2B marketers to share business videos.

Twitter: Creative Emphasis

With 330 million users and only a handful of characters to play, Twitter puts the emphasis on creativity. Twitter is an economical social platform for advertising with 50% YoY increase in ad engagement and 14% YoY decrease in cost per engagement.

An Ad Age survey ranks Twitter as the third most popular social channel for online advertising in terms of ROI. Twitter stats for small and medium business are especially encouraging as 93% of users who are following an SMB are planning to buy from them.

Twitter ad spending depends on your campaign objective. Each campaign has a different billable action. The revenue per visitor for Twitter is $0.44 compared to Facebook, which is $0.93. The engagement rates on Twitter are quite higher at 1-3%. Though the upside of Twitter ads is that ads are in stream and are not pulled aside, the downfall is that CPM for Twitter is much higher at around $3.50 and that Twitter doesn’t release an ROI.

Your Twitter ad spend optimization begins with how creatively you generate an ad. Twitter emphasizes on unique ad texts, images and hashtags, including keywords for better interaction with the target audience. 

And, Twitter rewards constant engagement. 

Instagram: The Most Engaging

It is safe to say by now that your audience is using the image-sharing app. Whether it is at work, home or the beach, over 1 billion people around the world are using Instagram. How is it relevant for B2B agencies, you might ask? Instagram is completely relevant for B2B agencies given that their largest engagement ratio comes from Instagram. Nearly 55% of Instagram users check their feeds multiple times a day, making the social channel the second most engaging platform after Facebook. 

And, around 77% U.S. businesses are using Instagram for their advertising efforts all because it brings in higher interactions per follower.

Instagram ads CPC cost on an average around $0.70-$1.00. Same as Facebook, the cost differs for various demographic groups. As less men use Instagram, getting clicks from them is costly.

As for ROI, Instagram gives out a higher return on investment. Though the CPC for ad placement is costly, it has a high conversion rate of 1.08%, which is more than Twitter and Pinterest.

For B2B brands, the cost is higher as people are less likely to be on Instagram to buy software. But, if a brand is still looking to optimize their ad spend on Instagram, a good hack would be to use Facebook’s automatic placements option and Instagram campaign reports to see if it’s a good place for showing your ads.

The amount of time Instagram users spend on the app is staggering. This makes it one of the major channels for brand awareness and increasing website visits, and there is your ROI. An overwhelming 83% of users say they discovered new brand products and services through Instagram.

Pinterest: The Photo-only Channel

Around 82% of users say that Pinterest helps them decide what to buy, which is why major B2B companies like Salesforce and Marketo are using Pinterest for audience engagement.

Being a picture-only platform, the demand is for high-resolution and engaging picture-ad formats. Bring on those whitepapers, ebooks, and guides and turn them into entertaining and informative infographics. Infographics are a great resource for audience engagement; they're crisp, visual and informative. 

The best way forward for B2B agencies is, of course, Pinterest ads. Promoted Pins and Carousels are the two types most commonly used for engagement. To optimize your spend, it is critical to be highly visual and engaging backed up by relevant keywords and hashtags. 

What’s the expected ROI, you ask? Increased website traffic, brand awareness and building customer trust by showcasing expertise through infographics. 

Quora: Answer to Earn

An unlikely source of advertising for B2B marketers. But with 200 million monthly visits, Quora keeps questioning. It’s a pretty good channel to start off by answering questions from your target audience.

Quora ads are only available on an auction basis, meaning there is a bidding system in place which requires advertisers to bid for the value for a click, while performance of the ad decides the cost of the click.

There are a few ways to optimize your Quora ad campaign:

  • Quora Pixel: This allows you to unlock Audience Targeting, track conversion and performance data.
  • Ad Set Level: Helps in topic targeting, monitoring weekly impressions, identifying the context of your ad including keywords, topics and questions and allowing separate ad sets as per desktop and mobile traffic, the cost for both differ. It also allows you to build location-specific ad sets and track performance by location, increasing your bids to win more ad positions. 

The best thing about Quora is that your target audience is out there discussing their problems in the open and looking for answers. And it’s a good place to show off expertise by answering questions, which eventually builds trust.

On concluding thoughts, whatever your paid advertising strategy is, make sure you choose platforms that align with your brand's needs. And use these simple hacks to optimize your paid advertising spend.

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