How much would it cost you to advertise on social media in 2023? We take a deep dive into the costs of running ads on the top social media platforms so you can make better decisions for your business.
When considering the cost of advertising on social media, there are several factors to take into account, such as the platform you choose, your target audience size and reach the type of ad format you use (video vs. image), and any additional costs associated with setting up or running ads on each platform.
Factors That Affect the Cost of Ads on Social Media
The most important factor when determining the cost of an ad is usually the minimum ad budget required by each platform. This will vary depending on which network you’re using. Prices on the major platforms typically start from $1 per day or more, depending on your campaign goals and objectives.
There are other several factors that can influence the cost of ads on social media platforms:
1. Ad placement:
The placement of the ad can have a significant impact on its cost. Ads that appear in prime positions, such as at the top of the newsfeed, are generally more expensive than those that appear lower down or in the sidebar.
2. Target audience:
The target audience you choose for your ad can also affect the cost. If you choose a highly specific audience, it may cost more to reach them than a broader audience.
3. Competition:
The level of competition in your industry or niche can also impact the cost of your ads. If many advertisers are targeting the same audience, the cost of reaching that audience may increase.
4. Ad format:
Different ad formats, such as image ads, video ads, or carousel ads, may have different costs. For example, video ads tend to be more expensive than image ads due to their higher engagement rates.
5. Ad relevance and quality:
Social media platforms prioritize relevant and high-quality ads, which means that ads with a higher relevance score and better performance may have lower costs than those with lower scores.
6. Ad objective:
The objective of your ad can also affect the cost. For example, if your objective is to generate website traffic, you may pay more per click than if your objective is simply to generate brand awareness.
For example, Facebook Ads require a minimum daily budget of $1 while LinkedIn Ads require at least $10 per day to run ads successfully. Twitter Ads also require a minimum daily budget of $5. For Instagram Ads, there's a minimum daily ad budget of $1.
Although this will depend largely upon whether or not you are utilizing influencer marketing as part of your strategy; if so, then expect to pay anywhere between $20-$500+ per post/ad depending upon who you partner with.
Cost Per Click and Cost Per Impression
Cost per click (CPC) and cost per impression (CPM) are two important metrics used in digital advertising. Here's how to calculate your CPC and CPM for your ads campaign:
Cost per click (CPC):
CPC is the amount an advertiser pays each time a user clicks on their ad. To calculate CPC, divide the total cost of the ad campaign by the total number of clicks. For example, if an advertiser spends $100 on a campaign and receives 50 clicks, the CPC would be $2 per click.
CPC = Total cost of campaign / Total number of clicks
Cost per impression (CPM):
CPM is the amount an advertiser pays for every thousand impressions their ad receives. To calculate CPM, divide the total cost of the ad campaign by the total number of impressions, then multiply the result by 1000.
So if an advertiser spends $500 on a campaign that receives 50,000 impressions, the CPM would be $10.
CPM = (Total cost of campaign / Total number of impressions) x 1000
The actual cost-per-click (CPC) or cost-per-impression (CPM) for any given ad campaign will depend heavily on what kind of targeting options are being used. Demographic data like age groupings and gender can influence pricing significantly along with other criteria like interests and behaviors.
But overall, CPCs tend to range from about 0.1 cents up to $1.5 across all networks, regardless of targeting parameters set in place by advertisers. Additionally, certain types of creative formats may incur higher costs due to increased competition within those specific areas, such as video ads versus static images.
However, these prices can still remain relatively low compared to traditional forms of advertising like television commercials or print advertisements where CPMs often exceed several dollars.
Platform | Minimum Daily Budget | Cost Per Click | Average Cost per Mille (Reach) |
$1 | $0.01 - $1 | From $2.5 | |
YouTube | $1 | $0.1 - $1 | From $3 |
$1 | $0.3 - $1 | From $3 | |
$10 | $0.75 - $1.12 | From $3.36 | |
$5 | $0.35 - $1.5 | From $6.5 | |
TikTok | $5 | $0.13 - $2 | From $3.5 |
$5 | $0.5 - $1.5 | From $3.2 |
As you can see from this table, Facebook is the cheapest when it comes to CPC rates, while TikTok tends to have the highest cost per click. With LinkedIn, the minimum cost per click is higher because the platform is usually more expensive due to its professional user base.
It's important to note that although CPM may appear cheaper upfront compared with CPC campaigns, if your ads don't generate enough clicks, then they won't be effective at driving conversions or sales, so make sure you consider both options carefully before deciding which type of campaign will work best for your business goals.
Cost of Social Advertising by Platform
When considering the cost of social media advertising, several factors come into play, including platform selection, ad format, and targeting options. The average costs associated with each platform vary widely depending on these factors.
TikTok:
On TikTok, the average cost per impression (CPM) ranges from $3.5 - $6 USD, while the cost per click (CPC) ranges from $0.13 - $2 USD. However, due to its growing popularity as an effective marketing tool, CPMs have been increasing over time and could continue to do so in 2023 as more brands begin using this platform for their campaigns.
Facebook:
Facebook remains one of the most popular platforms and cheapest when it comes to social media advertising and offers various ad formats, such as video ads or sponsored posts that can be targeted based on user demographics or interests.
The starting CPM on Facebook is around $2.5 USD, while CPC averages between $0.01 - $1 USD, depending on how competitive your industry is and how well-targeted your campaign is towards potential customers/clients.
Twitter:
On Twitter, advertisers pay higher with an average CPM ranging from $6.5 - $12 USD, while CPC averages between $0.35 - $1.5 USD, depending on targeting criteria used in campaigns. Additionally, Twitter allows you to use promoted tweets, which are typically cheaper than other forms of paid promotion since they don't require any additional creative work or setup fees.
Instagram:
Instagram offers a variety of different ad formats, including stories, carousel ads, videos, etc. The average CPM varies greatly depending on what type of ad you choose but generally falls within the range of $3 - $8 USD, while CPC averages around $0.3 - $1.5, again dependent upon targeting criteria used in campaigns.
LinkedIn:
LinkedIn offers sponsored content, display ads, and recruitment campaigns with varying pricing models based on objectives like clicks versus impressions. Generally speaking, though, prices tend to be higher than other platforms, especially when it has to do with recruitment campaigns. Overall the cost of 1000 impressions starts at $3.36.
YouTube:
Google's YouTube provides many different types of advertisements, including pre-roll commercials before videos start playing, skippable TrueView Ads during playback, as well as non-skippable bumper Ads at the beginning/end stages, respectively, all priced differently according to the budget size and goals set out by the advertiser but usually costing anywhere between 3-9 USD per thousand views (CPM).
Pinterest:
Pinterest also offers various types of advertisement formats like Promoted Pins & Video Ads, along with Shopping Ads, allowing users to purchase products directly through the app itself, making them an attractive choice among retailers looking to engage customers quickly and efficiently without having to leave the page/app itself.
The average costs range anywhere between $3.2 CPM all the way up to $11. CPC may begin at $0.5 respectively for you to see results from your ads campaign.
The Benefits of Social Media Advertising for Businesses
When compared with TV and Print Media, social media ads cost is still considerably lower and even more effective as people spend more time online. Here are some key benefits that businesses can gain from investing in social media ads:
• Increased brand awareness and visibility
By running targeted ads across multiple platforms simultaneously, companies have the potential to significantly increase their brand recognition amongst consumers who may not have heard about them otherwise.
Ads appear in news feeds alongside organic posts from friends and family so users are more likely to take notice than if they were scrolling through a newspaper page filled with unrelated stories.
• Targeted audience reach
With sophisticated targeting capabilities available on many social networks, advertisers now have unprecedented control over who sees their messages by selecting criteria such as age range, location, interests, etc.
This allows them to pinpoint exactly which demographic groups they want their message delivered to, resulting in higher conversion rates since only those interested in what is being offered will see it, rather than wasting resources trying to promote something irrelevant or unappealing to audiences outside of this group.
• Improved customer engagement and loyalty
By regularly interacting with customers via comments, replies, messages, etc., brands build relationships based on trust which encourages repeat purchases from these loyal followers while also attracting new ones due to increased word-of-mouth recommendations from satisfied customers.
Furthermore, when done correctly, these interactions give companies valuable insights into what works best for each individual customer, allowing them to tailor future offers accordingly.
• Increased website traffic and sales
Studies show that paid search engine results tend to generate twice as many clicks compared to free listings, making it one of the most effective ways to drive qualified leads directly back to the company's website where hopefully conversions occur. Similarly, using retargeting tactics to display relevant ads to previous visitors after leaving the site increases the chances of them returning to convert later down the line.
• Cost-effective compared to traditional methods
While the exact cost varies depending on factors like industry size, competition level, and budget allocated, there is no denying the fact that digital advertising is far cheaper than other forms of advertising.
For example, the average cost of ads on radio per week starts from $200 in the United States, whereas the same amount of impressions on Facebook costs just $21 -$35, meaning smaller businesses can access a wider pool of potential customers without breaking the bank.
Wrapping things ups
It is important to note that the choices you make when setting up your ads can increase or reduce your total ads spend significantly. Therefore you should pay attention to key parameters like objectives, demographics, and placements when planning your ads.
Overall, with the right approach, businesses can maximize their return on investment (ROI) better with social media ads, than they will organically. With the right approach, social media advertising can be a powerful tool for driving growth and reaching new customers in 2023 and beyond.