ROI In Social Media and PPC: When Should You Expect Peak Returns?
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One of the questions we get asked at Embryo by all clients is how long it takes to reach peak ROI in social media, PPC, and other forms of paid marketing. For this, there is never a set answer as so many variables come into play ranging from business type, business model, margins, location, frequency, and budgets. That doesn’t mean, however, that you can’t learn more about return on investment (ROI) and at least have some gauge as to when you can roughly expect your channels to become revenue-driving.
In this blog, we’ll be furnishing you with context about ROI in social media and PPC and looking at the factors that can affect the amount of revenue you can receive from any given paid marketing channel. To help you maximise ROI we’ll also be briefing you with some tips that can help you maximise your investment in paid channels.
If you’re dissatisfied with your current returns on your investment and want to work with an agency that has new ideas then get in touch with us by email at [email protected] or call us at 0161 327 2635. For now, though, we will focus on paid media and specifically paid social to review how to measure ROI effectively when acquiring new users.
Using Paid Media to Reach New Users and How This Benefits Your Business
Whether you are placing ads on Google and Bing using PPC methods to reach your audience or creating engaging ads on social media platforms such as Facebook, Instagram or LinkedIn, it is important to understand what these channels are for before turning them on, so you can measure them effectively against your goals from day one.
Paid Social can be used at all stages of the marketing funnel. To find new users, you can use video and image content in feeds, stories and posts to capture your audience’s attention. You can then continue retargeting web visitors to keep them in the funnel and aware of your brand. If you need a boost in sales, you can offer promotions and exclusives to your engaged segments to bring them back to the site.
Similarly, with PPC, you can target a range of campaigns that have multiple uses to find new users or bring back your regular visitors. Our PPC team at Embryo are experts in all campaign types on Google Ads and Microsoft Ads, including Search, Shopping, Performance Max and Display.
Paid Social Channels and Their Best Application
Paid social media channels, such as Facebook, Instagram, and LinkedIn, are an effective way for businesses to reach their target audience and drive revenue. The most appropriate network to use depends on the audience. Instagram has been the fastest-growing social media platform in recent years, particularly among those under 30. Many celebrities and influencers have dominated the space, and Instagram has become an influential part of young people’s lives that can impact what they buy. In a survey by Meta, 83% of people said Instagram helps them discover new products, and 81% said it helps them research products and services, so you can see the value that Instagram has at working at the top of the funnel.
Factors in Your Paid Social Strategy That Affect ROI
Before we dive into how long it takes to reach peak ROI on paid social channels, it is important to understand some factors that can affect ROI. Some of the factors to consider are:
- Ad targeting: How well ads target the ideal customer can impact the effectiveness of campaigns.
- Ad creative: The design and messaging of ads can significantly affect engagement and click-through rates.
- Bidding strategy: Bidding strategy will determine how much you pay for each impression, click or conversion.
- Landing page experience: The user experience of a landing page can impact conversion rates dramatically, so always best to make sure these are well-optimised.
- Competition: The industry and the level of competition in the market can also impact ROI.
There are more factors to consider than these highlights at a top level, in a study by Hootsuite, they highlight many more individual factors that affect performance and ROI on Facebook in particular.
Tips to Maximise ROI on Paid Social
While there is no guaranteed timeline for seeing ROI from paid social channels, there are several tips which can help you maximise ROI and see results more quickly. Here are some tips to consider:
- Set clear campaign objectives: By setting clear objectives for your campaigns, you can ensure that you target the right audience and use the right messaging to drive results.
- Test and optimise your campaigns: Continuously testing and optimising your campaigns can help you identify areas for improvement and maximise your ROI.
- Use data to inform your decisions: Use data from your campaigns to make informed decisions about your targeting, bidding strategy, and ad creative.
- Be patient: It is important to remember that paid social media is a long-term strategy. While it can take time to see results, investing in your campaigns can lead to significant returns over time.
You can read further into social media budgeting and scaling in a blog by one of our Paid Social Managers, where we cover how to scale a paid social strategy and optimise for a longer-term return on investment.
How Long Does It Take To See ROI from Paid Social Channels?
The time it takes to see ROI from paid social channels can vary depending on a range of factors, including the size of your budget, the level of competition in your market, and the effectiveness of your ad targeting and creative, as outlined above.
According to a study by AdEspresso, it takes an average of 2-4 weeks to see the start of positive results from Facebook ads. However, this timeline can vary depending on your campaign objectives and the complexity of your targeting. Instagram can be a faster platform to see results due to the visual nature of the network and the high engagement rates. However, the level of competition on Instagram is also higher than on other channels, which can impact the time it takes to see results.
On LinkedIn, it can take longer to see results due to the higher cost of advertising on the platform and a more limited user base. According to LinkedIn, it can take up to six months to see ROI from a LinkedIn campaign.
At Embryo, we have seen results achieved on Facebook and Instagram for our clients in 6-8 weeks and over 3-4 months on the same platforms, depending on their business goals, offering and market position and pace the client wants to move at. Embryo generated impressive ROI results in the education sector with our client Kaplan in just two months.
Lifetime Value and Paid Social
Understanding customer lifetime value is crucial when running paid social campaigns to acquire new customers. LTV is a metric that calculates the total revenue a customer will generate for your business throughout their lifetime. By knowing this metric, you can determine how much you can afford to spend on acquiring new customers through paid channels.
Knowing this information will help you determine the most effective bidding strategies and allocate your budget appropriately. For example, if you know that a customer will spend £900 over three years, you may be willing to spend up to £100 to acquire that customer through a paid social campaign. But if you look at them purchasing only once at £150, you may be willing to pay no more than £20 to acquire them. This knowledge can help you set your bids more strategically, target your ads to the right audience, and increase your chance of reaching additional high-value customers, who are more likely to generate significant revenue over time.
When applying a lifetime value strategy to paid social channels, you will target the customer at all points of their journey and across all mediums to encourage them to return and prevent them from being drawn to a competitor. In the account, you will have new customer campaigns, and retargeting campaigns, which will have very different measurement metrics and results assigned to them. Each will work alongside your organic, PPC, email and other digital marketing strategies to achieve success.
Still Have Questions on ROI from Paid Social, PPC or Any Other Digital Marketing?
While there is no guaranteed timeline for seeing ROI from paid social channels, remember that investing in your campaigns can lead to significant returns over time. By setting clear objectives, testing and optimising your campaigns, and using data to inform your decisions, you can maximise your ROI and see results more quickly.
If you’d like to understand more about paid social or any other paid media channel, including PPC or affiliate marketing, reach out to Embryo for a free consultation and health check on your paid marketing efforts.
We will show you what we can do for your business.
