Social media isn’t an option for businesses anymore, and this shouldn’t come as a surprise. With Facebook, Instagram, Pinterest, Twitter, and many other platforms competing for your customers’ attention, having a smart social media strategy in place will go far in helping you gain and retain customers.
But if you’re a small business or dealership with limited funds, how can you best use social media with a limited advertising budget? Say no more, my friends. Your social media and budgeting maven (aka yours truly) is on the scene, revealing some tips and tricks to help you get the best ROI for your budget.
1. Determining Your Budget
There are two ways you can come up with a social media budget; you can determine which types of ads you’d like to run and then price each one accordingly, or you can start with a set amount and work backwards, determining how many and what type of ads will fit into the total you have allotted for social media advertising.
Let’s pretend you’re setting up your social media budget the second way. Most dealerships will have a monetary amount they’re willing to spend before they develop a plan to implement that budget. If you have $2,000 to spend each month on social media advertising and want to play on the biggest social media platform available (Facebook), then you should start splitting that budget up into different ads.
2. How to Price Each Ad
After you determine your budget, you’re probably wondering “Now what?” There are many different ad types with differing objectives, and each one could be priced differently than the one before. A good rule of thumb is to price each ad between $5 and $10 per day. A simple Post Engagement ad to help build clout on your business’s Facebook page should be priced at the lower end, around $5, while a New Car Collection ad that highlights your brand-new models should be priced higher to out-bid ads from your competitors.
Keep in mind that your ad budget should also take into account your audience size. A rural dealer with a local population of 10,000 doesn’t need to compete for ad space like a dealership in a large metropolitan area does.
3. Look at Your Metrics
Once you set your ads up, take a look at how they’re performing. If you notice that your new car ad has a frequency score of 6, you may need to expand your targeting or move some budget to another ad. (A good frequency score should hover around 3.) If you notice that your ad has a cost per click of $2 to $3 dollars but has good click through rates and bounce rates, you may be in a highly competitive area and need to increase your budget. By the way, those bounce rates? You won’t find them in Facebook metrics… Google Analytics will be your best friend for that!
There are also times when it makes sense to increase your budget across the board – the holidays are a prime example of thousands of businesses competing for limited ad space on social media platforms. As a result, the cost per result can climb. Don’t let that scare you, but be prepared to expand your budget or cut down the number of ads you’re running so that you can reallocate your existing budget toward the ads that best serve your bottom line. Play around with your budgets and objectives until you reach a point of diminishing returns – then you’ll know you have an ad that’s fully optimized for your audience and priced to compete well within the platform.
Don’t Be Afraid to Experiment!
When you’re putting money, no matter how much or how little, into social media advertising, you want to be sure you’re getting the best bang for your buck. If you can, set aside some money in your budget to conduct some A/B testing. This will show you which types of creative engage your audience, which placements make your product shine, and what type of audience you should be marketing to.
Having a little extra money in the budget for this is a great way to gain knowledge about what works for your brand and what doesn’t. Get down and dirty into the “why” behind your strategy and you’ll have the answers you need to further hone your strategy.
Creating a social media budget sounds like it should be easy; however, it’s not always so once you get started. We’ve covered some of the high-level information here, but if you still have questions, don’t worry! Our team is here to help you determine the best plan of action, and we’d be happy to talk together and break down a social media advertising budget with you. From the types of ads used to the prices set for each, there are a lot of things to consider. If you’d like more information about setting up social ads or simply want to pick our brains about an idea you have, our social media budgeting wizards are here to help.