Return on ad spend from social media advertisements has skyrocketed over the past couple of years. The main factor behind this surge is the time spent on social platforms. From brands to individuals, everyone spends 2 hours and 23 minutes per day.
This time isn’t for a particular social media platform. Instead, it’s an average of all social media platforms combined. However, experts social media marketers at Advertyzed, believe people spend most of their time on,
Based on the audience, you’re planning to target, the above numerical hierarchy may vary. For instance, you’ll find SEC B’s target audience with an age bracket of 20-45 on LinkedIn. This is because most US citizens within this age bracket are looking for professional networking. In addition, LinkedIn is dominated by C-level executives who have the money and power to make decisions.
Hence, B2B leads are acquired through LinkedIn if you offer services or products that make work-life easier. On the contrary, clothing brands and pet products receive better responses on Instagram and Facebook.
If you’re trying to figure out how many leads your digital marketing agency will acquire based on your social media advertising budget, you need not worry. When you sign up with an Advertising agency, they share the number of sales and other responsibilities in an SLA (Social Media Service Level Agreement) With that said, let’s understand how much does it cost for social media ads.
Cost of Paid Ads on Social Media in 2024
Cost of social media ads in 2024 can vary based on the following factors,
- Ad targeting
- Market competitiveness
- Product/service demand
- Social platform
These factors combined determine the actual cost of social media ads in 2024. However, we’ve curated a list of ad spend budget Advertyzed has utilized for client’s based on the platform. Breaking down social media ad cost based on product/service isn’t a realistic approach because your ad budget will be influenced by your ad account’s age.
1. Facebook Ads Cost in 2024
Meta business provides a variety of targeting options and filters that refine your ads for better placements. However, these options come at a cost of $0.95 per click, meaning your Facebook ad budget must be at least $1000 for sales
Here’s a quick example, if you own a clothing brand and your cost per click is $1, then an ad budget of $1000 will get you 1000 visitors. However, if your site’s conversion rate is 5% you’ll be gaining 50 sales. This might seem like very few sales, but clothing brand niche is competitive and the products are on the expensive side.
Therefore, if you manage to score 50 leads and sell one product for $50, you can score up to $2500 sales with a $1000 ad budget. As your ad account grows, you’ll be able to score more sales and click with less budget. This is because continuous ads boost your brand awareness, creating room for organic orders.
2. Instagram Ads Cost in 2024
Instagram ads are slightly expensive compared to Facebook with an average cost per click between $1.29 – $1.50. However, Instagram ads are highly profitable for clothes and food brands, and the longevity of instagram ads outweigh the high cost per click.
Consider a coffee shop owner running instagram ads with a budget of $1500 and manages to score 50 walk-in customers each spending around $30 in total. That’s $1500 sales due to instagram ads. While this number might not seem interesting, the benefits of brand awareness and regular customer visits is a strong reason for running instagram ads.
3. YouTube Ads Cost in 2024
Unlike instagram and Facebook, YouTube ads work on CPV (Cost per View) metrics. This means that the ad account will be charged if the ad video is viewed. The average CPV on YouTube is $0.20. If a product company spends $2000 on YouTube ads, the number of views generated would be 10,000. From here, if 5% viewers click and convert on the website, the sale of a $200 product would even out the ad budget.
If the product has a monthly subscription fee, the ad budget would remain the same but the revenue will keep increasing over time. That’s the power of social media advertising – especially YouTube!
4. TikTok Ads Cost in 2024
Tiktok is the number one spot for attracting Gen Z buyers through creative marketing. According to Statista, US citizens spend a staggering 52 minutes on average per day on TikTok. And most of the time spent on TikTok comes from a young audience.
The cost of TikTok ads is calculated through CPM (Cost per Milli) ; it means the amount paid by the advertiser for 1000 views. With a CPM of $10, a trendy fashion brand targeting Gen Z will acquire 1000 views. With a $3000 budget, the number of views will mount up to 300,000.
An average website click-through rate of 0.5% means 1500 clicks. Out of which if 60 visitors purchase an average product of $50 the cost of advertisement is covered. And that’s accounting for the lowest 6% sales from 1500 visitors. Needless to say, brand awareness from 300,000 visitors guarantees future sales with a lower budget.
5. Linkedin Ad Cost in 2024
Linkedin is a prime platform for B2B lead gen. Therefore, Linkedin ads are more on the expensive side of the spectrum benching at $2 to $5.While Linkedin impressions are pretty good for a high ad spend, most businesses target CPC for ROAS calculations.
Due to the high ad cost, mostly SaaS companies with a monthly recurring payment model invest around $4000 in Linkedin ads. By taking this ad budget as an example and $3 as CPC (Cost per Click) we can calculate 1,333 clicks. Out of 1,333 only 4% making a purchase would win a profit of $732 in the first month with a total earning of $3732. If the price of the product is $70.
Even if the price is lower, let’s say $40, the first month might not be profitable, but the sales acquired in the next month would compensate for the previous loss – as the previous customer would pay $40 as well.
The Final Takeaway on Social Media Ad Spend
As we’ve navigated through the dynamic landscape of social media advertising, it’s clear that the returns on ad spend are impressive across the board, albeit with nuances specific to each platform. The surge in ad effectiveness ties back to the average daily engagement—over two hours that users dedicate to their social feeds. Whether it’s the visually driven allure of Instagram, the professional networking power of LinkedIn, or the youthful vibrancy of TikTok, each platform offers unique advantages and challenges.
Given the costs associated with these platforms—ranging from affordable clicks to premium placements—it’s crucial for marketers to refine their strategies based on their target demographics and desired outcomes. Whether you’re a small coffee shop or a large SaaS company, the key lies in understanding these nuances and leveraging them for maximum impact.