Social Media Advertising: How It Works & What It Costs

Social Media Advertising

Do you know that there are more than 4.62 billion social media users around the world in 2022? With the huge number of social media users, more businesses realize that advertising on social media is the surest way to drive traffic and sales. To many of us, social media advertising is something we see on every single day, but hardly we think of the ins and outs of it. In this article, we will discuss the basics of social media advertising, their benefits, the costs and some tips for running a successful social media advertising campaign.

What is Social Media Advertising

Social media advertising is a digital marketing strategy that uses paid ads to promote business on social networking channels such as Facebook, Instagram, LinkedIn and Twitter. It aims to engage your target audience and promote your products/services and brand using a wide range of ad formats, placement and media types, such as image, video and carousel.

There’s an obvious dropping tendency for the average organic reach rates across multiple social media channels. More businesses realize that social media advertising has become a necessity. As a result, they are looking to spend big on social media advertising. According to the data on Statista, ad spending in the social media advertising segment is expected to reach over $226 billion in 2022. The ongoing pandemic doesn’t slow down the global investment on social media advertising. Instead, it continues to push more people online, creating more opportunities for businesses to reach their potential customers.

Taking Facebook as an example, despite facing intensifying competition for advertising dollars, it still remains dominant. ZIPPIA’s research estimated that as of 2022, over 90% of US businesses use social media for marketing purposes, with a majority of these expenses coming from Facebook (80%), followed by LinkedIn (4%) and Pinterest (2%). Facebook now has approximately 10 million active advertisers across its services. Apparently, implementing Facebook advertising is still an essential part of marketing plans for many brands.

Instagram, another product owned by Meta Platforms, has also shaped the landscape of social commerce. As of 2022, Instagram reached 2 billion active users worldwide and has continued to grow at a steady pace. The estimated reach of Instagram ads is 1.8 billion people, which is more than half of Instagram users. Most importantly, Instagram has the highest engagement rate across all social media platforms. Nearly 130 million Instagram users engage with shopping posts every month. According to Instagram advertising data, 50% of Instagram users have visited a website to buy a product/service after seeing it in Stories and 44% of users shop for products on Instagram weekly. Apparently, Instagram is the perfect social network to increase brand reach and drive new business.

Types of Social Media Advertising


Image ads

Facebook image ads allow businesses to use single images to showcase their products or services, with a CTA button directly linking to the product page. They can be used across multiple placements supporting a range of aspect ratios. You may take a look at the Facebook Ads Guide to learn more about the recommended image ad specs and ratios.

Video ads

Just like image ads, video ads help to show off your product, service and brand using a video. Video ads tend to drive higher engagement than image ads. It is recommended to use videos that are 15 seconds or less to captivate your audience and keep them engaged. As compared to images, you can share a lot more information about products to drive the audience to take a desired action.

Carousel ads

Facebook carousel ads feature up to 10 images or videos within a single ad, each with its own headline, link, or description. They are great for highlighting multiple products and driving conversion as each image or video can have its own CTA button linking to the product page. Not only showcasing products, carousel ads also provide an excellent opportunity to tell a story across carousel cards.


Instant experience ads (formerly canvas ads) are mobile-optimized and designed to deliver rich content experiences to audiences. When users click on the instant experience ad, it expands to a full-screen content page that can be fully customized with different formats, including single image, video, carousel and collection. You can build an instant experience ad from scratch or use a pre-designed template based on your campaign objective.


Image ads

Instagram image ads are composed of images, a description and a call to action button, taking up the full screen of Instagram users. You can use images in various aspect ratios to create an image ad, but the platform recommends using square images (1:1) as other aspect ratios may be cropped to fit the placements. Image ads are best suited for product-based businesses that can show off their offerings with high-quality photography or design and illustration.

Video ads

Video ads are becoming more popular on Instagram as video tends to be more engaging with Instagram’s autoplay feature. There are a few different placements for Instagram video ads, such as in-feed, Stories and Reels. You should know the recommended ad specs for each placement to ensure the best appearance.

Carousel ads

Instagram carousel ads are made up of up to 10 images or videos in one single ad that users can swipe through. They can be useful if you want to showcase more than one product/service at once, or have multiple photos of one product from different angles. Each card can have its own link that leads users directly to the corresponding product page on your website.

Stories Ads

Stories ads make full use of the mobile screen, providing a fully immersive experience for viewers. With options to add stickers, emojis, GIFS and other creative elements, you can easily get viewers to the landing page or swipe to find more information. When placing the ad on Instagram Stories, the recommended aspect ratio is 9:16 to fit the full-screen, vertical format of Stories. Also, you should be aware that videos longer than 10 seconds in length will be split across separate Stories cards.

Benefits of Social Media Advertising

Reach wider audience

The use of social media has become a part of everyday life for people all over the globe. Advertising on social media gives you an opportunity to reach your target audiences. By using the targeting options provided by these platforms, brands can easily find the right audience based on demographic information including age, gender and income level, interests and location. The more audience you reach, the higher your chances of gaining potential customers who are interested in your product and service.

Build brand awareness and recognition

Due to the large number of users on social media, social media advertising is a great way to build brand awareness by showcasing your products or services to audiences. While there is a decline in organic reach on social media, ​​regular advertising allows brands to keep their target audience engaged and stay top of mind with them.

Low cost

Staying on budget is a difficult endeavor for many small companies, especially when planning to invest in traditional advertising. However, in comparison to traditional marketing channels, the cost of social media advertising is relatively low. Signing up social media accounts is free for most platforms. When creating the ads, you can set your own budget and control the overall spend for a campaign. Also, the targeting options allow you to reach the audience who are most likely to be interested in your brand, to improve the efficiency of marketing efforts. With its enormous reach and flexible budgeting, social media advertising is one of the most cost-effective ways to market your business.

Drive traffic to your website

Social media can be a great source of website traffic to help you establish a successful online business. By adding a link to the ad, you can send people to your website and increase your visibility. Make sure your content is easy to share and all links from your social media advertising work. Increasing social media engagement is very crucial when it comes to driving traffic to your website. You should create engaging and useful content that encourages users to share and click on your ad.

Generate leads

Generating leads from social media can benefit both B2C and B2B business as it helps to connect to people who are already looking for your brand. Many social media offer lead generation ads that allow you to collect data about people who clicked on them. To capture their interest, you can target them with relevant content, testimonials and special offers on your ad that include pre-populated forms, allowing them easily finish signing up without spending too much time filling out personal information.

Which Social Media is best for Advertising?

When considering which social media platform to advertise on, keep in mind that each platform has its own audience. Your choice of advertising platforms depends on where your target audiences are. Basically, all the major social media offer advertising options, but that doesn’t mean that you need to invest in all of them. It is important to identify the social media channels they use the most. Let’s look at some of the most popular social media platforms for paid marketing.


With over 2.8 billion active monthly users, Facebook is the largest social media in the world, making it a reliable choice to advertise. Brands can easily find their target audience on Facebook, no matter how niche they are. Also, its powerful audience target options allow you to define the audience that will see your ads for each campaign based on their demographics, interests and behavior patterns, making sure your ads reach the right users.

Advertising on Facebook is considerably affordable. The cost of Facebook ads depends on multiple factors, including campaign objectives you set and who you’re targeting. But you can decide how much you want to spend on Facebook ads. For small businesses, this is one of the most appealing benefits of advertising on Facebook as it offers them greater access to potential customers even on a small budget.


Instagram is a visual-based platform, making it an ideal tool for brands with visually appealing products or with ability to create aesthetically pleasing visual content. Users on Instagram tend to actively visit business profiles and engage with their content. It is no secret that image and video posts usually receive more likes, shares, and engagement than text. That’s why the engagement rate on Instagram is higher than other social media platforms. If your goal is increasing brand awareness, you should consider Instagram advertising.

As Instagram is owned by Meta, it offers many of the same ad types as Facebook. You can use the powerful targeting options and manage your Instagram ads on Meta Ads Manager. Many businesses, especially ecommerce stores, may worry about the conversion rate of their ads. But with Meta’s ​​advertising system, Instagram advertising helps you to drive traffic to your ecommerce website and generate sales.


With over 800 million users, LinkedIn is the most popular professional network in the world. Unlike other social media platforms, users on LinkedIn regularly update their profile information. Its massive professional user base and reliable user data allows businesses to connect with audiences based on their employment history and job qualification. LinkedIn is an essential channel for B2B brands as they can easily reach qualified and high-value users coming from various industries by using the platform's ad targeting options.

Building your thought leadership on LinkedIn can help you foster trust and credibility, providing you a chance to connect with elite industry leaders and potential partners. To make your business stand out from the competition, you should regularly share insight and company news on LinkedIn as a way to highlight your expertise to your network. When used properly, you can establish yourself as a recognized thought leader in your fields on LinkedIn.

How much does Social Media Advertising cost

The cost of running ads on social media platforms depends on how much you want to spend. You can set a budget for each ad and the platforms will spend your budget evenly throughout the time your ads run. However, as businesses are increasing their investments in social media, there are limited advertising placements for businesses to sponsor. As a result, social media platforms use an auction system to determine which ad to show to the audience. This ad auction is basically an algorithm looking at a number of criteria including ad quality, maximum bid and performance. Here are some factors that determine what an ad will cost you.


When advertising on social media, you can define your target audiencce based on demographics, interests, behaviors and other criteria. However, if the target group is too broad, your ad may be delivered to people who are not interested in your products. Other advertisers, even from other industries, will also try to reach the same group of audience. Targeting too broad of audience may result in waste of budget and a low ROI.

A large audience size generally works best for businesses selling a product or service that appeal to a broad market, especially when the campaign goal is to increase brand awareness. If your target market is too small and niche, you should consider narrowing down your targeting. This can help attract high-intent customers and drive sales.


There are various social media platforms to choose from, each offering the potential for high rates of return. The cost of advertising varies depending on the platform you choose. According to WordStream, the average CPC on Facebook is US0.97. The cost of each click on Instagram is at US3.56, more than double that of on Facebook. LinkedIn has a much higher CPC than other social platforms because it generates more valuable leads. For brands who want to build a strong online presence on various social media platforms, you should consider whether your budget is sufficient to advertise on each one.

Ad quality and relevance

Higher ad quality generally leads to better performance, including better ad positions and lower cost. Ad quality is determined by how interested the platform thinks a user will be in seeing your ad. For example, Facebook’s Relevance Score is a rating from 1 to 10 that estimates how well your target audience is responding to your ad. The higher the relevance score, the lower the cost.

5 Tips to Successful Social Media Marketing

1. Know your target audience

With so many users on each social media platform, it is impossible to target all users and create content that can cater to everyone. When creating your social media marketing strategy, you should know your target audience at first. Think about who your product will appeal to, who are more likely to interact with your brand and what pain point they have. Your product will satisfy the needs of certain segments of the population, and may not be relevant to other segments. You can create a buyer persona based on the characteristics of your current customers, including their age, gender, income, interest, and overall lifestyle. Better understanding of your target audience can help you identify what type of content they want to consume and reach them with the right content at the right moment.

2. Select the best platforms

Being active on every social media platform might seem like a good idea, but this can be a waste of time and resources. Instead, you should be where your audience is. Once you identify your target audience, you can begin selecting the ideal social media platform to help reach them. Look at the demographics of the users on each platform and consider how active your audience is on each platform.

The choice of social media platforms you use is also determined by your business nature. For example, Instagram is the most powerful channel for ecommerce brands with stunning product visuals thanks to its ecommerce features, such as adding product tags on posts, allowing you to drive traffic to your website. For B2B business, LinkedIn gives you an opportunity to form meaningful connections with decision-makers and generate quality leads.

Just remember, each social media platform has its own personality and ways of communicating. Select a network that aligns with your business goal and focus your efforts on the right channels.

3. Be Consistent

Maintaining a consistent voice is key to your social media marketing strategy. Being consistent allows you to grow audience engagement, instill a sense of trust as well as build strong brand recognition. Your content is the best way for strengthening your brand personality. Having a consistent posting schedule gives your audience an expectation of what type of content your brand is going to provide so that your brand can stay top of mind with your audience. For visual content, you can develop a social media brand style guide that defines your brand’s visual identity. It will make sure that everyone on your team represents the brand in a visually consistent way.

4. Track and Analyze Metrics

The importance of tracking the results is often underestimated. Instead, it is probably the most important part when you are executing your social media strategy. Social media metrics are the data you use to determine the effectiveness of your campaign .By looking at these metrics, you can get a better idea of how your ad is performing and how you can optimize your strategy.

5. Outsourci​​ng social media marketing

Managing a successful social media campaign takes time and effort. The expertise, skill and time required may be more than most companies can handle. Hiring a marketing agency for your team can be a great way to kickstart your social media marketing ideas. An outsourced social media agency will help you utilize social media to improve your business reach with its experience and access to all the necessary analytical tools. You can guide them in the right direction to ensure they are meeting your business goal.

How SDMC can help

Executing a proper social media advertising strategy is vital for your business success. If you’re not taking advantage of social media, you are missing out on potential customer and business opportunities. Start running social media ads today!

If you are looking for a social agency that drives results, SDMC can help. As a full service digital marketing agency, we work with clients of all shapes and sizes across every industry. Whether you’re starting from scratch or building on an existing profile, we can tailor social content based on your brand’s tone of voice to meet your business goals.

Contact us today to learn how our social media management services can bring you success this year and beyond.

This site uses cookies to offer you a better browsing experience. By browsing this website, you agree to our use of cookies.