I get this question all the time from small business owners… should I run social media ads to my business?

Of course the answer isn’t going to be a straight yes or no. But there are some things you need to understand if you decide to run ads.

That’s what I’m gonna cover here today.

I’ve mentioned before that I currently don’t run ads. 

This is not because I think they are bad or don’t work – in fact, I think ads are great if you know what you are doing. They are just not part of my digital marketing strategy and don’t need to be, because the primary aspect of my strategy is to publish free content which gets shared or found by search engines.

This in turn drives discovery, drives traffic and creates leads. It is more a long-term consistent strategy which doesn’t just stop suddenly like ads do. 

With ads you can only run them for a specific period of time while you are paying for them – this happens whether or not they work.

The thing is though, I know a lot of people are impatient or feel like they don’t want to or can’t put in the work of creating appealing content. They are seeking quick results and are willing to throw money at ads. So if you are gonna do it anyway, here are 3 things to consider.

1. The goal – what outcome are you actually looking for?
2. The call to action – what would you like people to do and why?
3. The investment – how do you determine how much is worth spending?

Let’s dive into this a bit more.

Point 1 – The Goal

What do you want to accomplish with your ad campaign? Typical answers might be, I want to increase revenue or make more sales. Sure, you want to do that, but what will that look like in actual numbers.

You need to determine what success looks like to you otherwise you are just having a stab in the dark just to see what will happen – not a great strategy.

Put a number to it so then you can use that to measure the results.

For example, if you say you need 5 new customers from your ad campaign. Considering that the conversion rate is quite low on Social Media at around 2-3%, you’ll probably need to have at least 200 leads coming through in order to stand a chance of getting 5 paid customers. It could even be more if these leads are cold (meaning they haven’t heard of you before). 

You see, this is a numbers game and that’s why the word funnel gets used a lot to describe how it works. A lot of people come in at the top at the wide end and only a small few come out at the bottom. 

Point 2 – Call to action – What do you want people to do?

You need to give the prospect clear instructions on what to do next. This should tie in with the goal. 

There are two ways by which I would approach this:

1. Send them to a piece of relevant content that is going to a) give them some value up front by helping them solve their problem and build up some trust with you.
   
   And b) It gives you an opportunity to capture their detail by offering a free item which allows you to build your email list and remarket to them later.
   
2. Send them to a dedicated sales page – don’t just have people visit your site’s home page where they can get distracted or confused and just leave, send them to a targeted page that funnels them to take the action you want like to buy a specific product. Your chances of converting them increases significantly when you do it this way.

Point 3 – The Investment

Here’s the thing. You have to know the level of ad spend required to get the result you want and determine where or not it is worth it or whether you can afford it.

So how do you work this out?

Well you have to determine what a customer is worth to you. 

You can work this out based on the average amount a customer spends with you on an annual basis and then use that. Or maybe you have some other way of doing it but you need to come up with a number which is connected with revenue.

Now there is this thing called Customer Acquisition Cost (CAC) which is basically how much you spend to get a customer. A typical amount would be 8-10% of your customer value. So if your customer is worth £1000 I would think spending £100 to acquire them would be reasonable.

So based on the earlier example where you need to convert 5 customers (£5000 value) you should probably expect to spend at least around £500. 

Of course you could spend more, or less, but you need to figure out what’s reasonable for the result you are likely to get. 

If you can do this and acquire those 5 new customers, then it is fair to say your campaign was a success.

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In addition to all the points I’ve made, I’m assuming that besides running the ad itself everything else you need are in place and working effectively such as your ad copy, your website and landing, your email marketing and sales system. In other words, a complete funnel.

If you are not sure how to implement a marketing and sales funnel, check out my free checklist that shows you the 5 key things you need to create an effective digital marketing strategy:

Click here to get the checklist>> [coming soon]

In summary here are the things you need to consider before you run online ads:

1. What’s your goal? Make it measurable
2. What’s the call to action?
3. How much should you spend to get the results you need?

Reach out if you have any questions or if you need help with your web strategy.