73% of marketers believe that social media marketing has been “somewhat effective” or “very effective” for meeting their business objectives1. With more than 3.3 billion daily active users, it’s easy to see why social media plays such a significant role in guiding the consumer journey. Having a social media presence is no longer optional: If companies want to expand their reach, increase conversions, and improve sales performance, social media must be part of their overarching marketing strategy.
However, being present on social media isn’t enough on its own. Companies need to understand how to develop a social media marketing strategy that’s effective and earns them the results they seek. By taking a strategic approach to social media marketing, brands can make a greater impact on their bottom line.
Working Backwards from Your Goals
Before companies can move forward with their social media marketing efforts, they need to work backward from their end goal. This is the basis of objective-based marketing and begins with identifying the target audience, which requires companies to have experienced marketers on-hand to facilitate efficient research efforts. When researching the target audience, marketers need to consider the following key demographics:
- Income Level
- Life Events
- In Market Signals
Developing a buyer persona doesn’t just help brands understand their audience, it also provides key insights about the specific platform members of their target market use. According to market research2, different social media platforms appeal to different demographics. For instance, more females than males aged 18 – 50 use Facebook. Facebook users are also more likely to belong to urban households and make at least $75,000 annually. Marketers can use the information gained through their buyer persona development exercises to identify the best platform for reaching their target audience. In recent years the average age of users on Meta platforms has risen, with the younger crowd opting for platforms like TikTok.
Identifying the target market can also help companies better strategize about how to present marketing materials to their audience. For example, a toy company may wish to run a highly visual campaign on Instagram to boost sales since children aged 13 – 17 prefer the platform over Facebook, Twitter, and other social media.
Factors to Consider for Social Media Campaigns
In addition to defining the target audience, brands need to consider budget, competition, conversion rate, and customer lifetime value when developing their social strategies. To start, companies need to do the math to determine the cost for generating each lead compared to the profit gained from each customer. Use the following formula for eCommerce:
(Ad Budget / Avg CPA * Avg Order Size * Margin) – Advertising Budget = Gross Profit before shipping
For service-based businesses, use the slightly modified formula:
(Ad Budget / CPL * CLV * Close Rate) – Advertising Budget = Gross Profit (before commissions and costs)
A company spending $5,000 per month on social advertising typically acquires 20 leads and ultimately produces 10 new clients monthly, making their CPL (Cost Per Lead) $250. If the company’s average customer lifetime value is $10,000, and with the closing rate around 50%, the company has a profit of $95,000 before the cost of fulfillment, commissions, etc. By defining the customer lifetime value first, companies can better strategize their budgets to determine how much they’re willing to pay for each new lead.
Conversion rate is another key factor to consider: Of the customers coming to a company’s site, how many actually follow through by providing their contact information or making a purchase? If the conversion rate is high, then a brand may think about increasing its total ad budget since they have a natural appeal and its products or services are more in demand. The opposite holds true for lower conversion rates: Typically, a low conversion rate is associated with either a high-ticket item or a long-term informed purchase. Companies that have a low conversion rate must have a high profit per acquisition in order to be profitable with their digital advertising efforts. Companies may be willing to pay more for their social advertising, even if they have a low conversion rate, because the customer acquisition value tends to be much higher, thereby earning them a stronger return on their ad spend despite the low conversion rate.
Lastly, platform competition should be carefully evaluated. If a specific channel is oversaturated with competitors, marketing efforts can easily go to waste as brands struggle to stand out from the crowd. In these circumstances, it’s in the company’s best interest to explore alternative spaces where its target market exists but its competitors do not. This will help save money on advertising spend as well: The higher the competition, the more expensive marketing becomes as brands compete to have their message heard.
Understanding When to Use Each Targeting Method
It’s not enough to simply understand the target audience: Brands also need to understand when one targeting method is the better choice compared to another. Many mistakenly believe that a lookalike audience always makes sense to use. Why wouldn’t you want to target the people similar to those who already know and love your brand?
The problem with this strategy lies solely in how you built your existing following. If you’re a small business owner whose following largely consists of paid followers, friends, and family members, your lookalike audience probably doesn’t match your ideal buyer persona. Instead of reaching customers that meet a specific demographic, your ad spend gets wasted delivering materials to a large group of unrelated individuals that may not be in the market for your products or services.
Likewise, interest-based targeting can present its own set of problems. In order for this method to work effectively, companies need to have an airtight understanding of their target audience. The more granular and detailed your parameters, the more likely it is your ad will be delivered to the right individuals.
Final Tips on Social Media Marketing Strategy
Learning how to develop a social media marketing strategy takes years of experience and practice. From target audience analysis and budgeting to determining customer lifetime value and comparing platform competition, there are many factors to consider in order to ensure social media marketing efforts make the right impact. By securing services from a skilled digital marketing agency, however, companies can achieve a stronger return on their ad spend and generate meaningful results that boost their bottom line.