Social media advertising is becoming more of powerful marketing tool for American based brands, as more of the country’s consumers continue to join social networks. When you know what you want to achieve and what advertising options are available to you, your marketing message can potentially reach hundreds of millions of people.
Facebook (170 million), Twitter (81 million), Instagram (121 million) and YouTube (126 million) had the most users of all social media networks in America in 2018. Other platforms such as Whatsapp (68 million) and Snapchat are becoming more popular.
Advertising on these networks can be affordable if you have a thorough understanding of your brand’s marketing strategy and campaign objectives. Here are the advertising options these platforms offer, and how the adverts are priced.
How the pricing of social media advertising works
There are two things to understand when it comes to social media advert costs:
1.) What the advertiser is charged for
2.) How social media networks decide on the price
What the advertiser is charged for: Most of the time, advertisers only pay for the views, clicks or other actions that users complete when they see an advert. Social media networks allow advertisers to create advertising campaigns on their platforms. When advertisers set up their campaigns, they have to choose what they want users to do when they see their advert. Some marketers want users to click on the advert, while others want people to watch a video. They are only charged for each of the actions a user performs.
How social media adverts are priced: Many social networks rely on ad auctions to determine what an advertiser will pay for a click, view or other action. The cost of actions can be influenced by other advertisers in the auction. These auctions happen each time before a user sees an advert on a social media platform. In each of these auctions, the social network’s auction system weighs up a number of adverts from various advertisers before one is chosen and displayed to the user.
* Advertisers can choose to bid automatically or manually. With manual bidding, which is also called maximum bidding, an advertiser selects how much they are willing to pay for each user action.
* When the advertiser wins in the auction, they don’t always have to pay the amount they set manually. Instead, they only pay slightly more than the bid that came second in the auction, which, in Twitter’s case, is one penny above the second place advertiser’s bid. This is called a second-price auction. Twitter sells adverts in second-price auctions. YouTube also provides this option.
* On Facebook, adverts win auctions based on their highest total value. This is a combination of the advertiser’s bid, the quality and relevance of adverts and the estimated action rate of the audience.
Summary: Food start-ups either handle social media account management themselves or higher out to small to medium sized agencies who manage accounts and post marketing campaigns and updates for the client. The Lemonaders Team is available to help in anyway relating to the subject of social media.