by Kirsten Hodgson
Image courtesy of Stuart Miles
This is the second in a two part series about whether advertising on LinkedIn and Facebook is something professionals should consider. I asked Anna Gervai, owner of Orchid Web Design (a full-service digital agency based in
What sort of budget will you need?
The budget needed for all three channels is based on an auction process rather than a set cost per ad.
So how much you pay is determined by how much other advertisers are willing to pay for the same targeting you’ve chosen at the time you’re running your campaign. This is why you’ll have a bit of trouble at first working out much you will need to spend.
What are the set-up fees?
You can use any of the platforms yourself to place your advertising with no set-up fee other than your time, or you can get a professional to take care of everything for you.
If you have the time to educate yourself then try the DIY option, however expect a large learning curve and poor results until you ‘learn the ropes’. Many who try the DIY option complain of poor results and being unsure how to improve them.
A professional is the best idea if you don’t have the time and money to learn as you go and want excellent results from the start, especially for smaller budgets where every dollar counts.
A professional will normally charge a set fee for the creative and set-up and often ask a monthly fee for time spent on optimisation (depending on the platform you’re using). The creative / set-up is typically a one-off fee, so once it’s done you don’t have to pay again unless you change your targeting.
Normally as part of set-up they will research the best targeting for you, do the copywriting for your ads, suggest or provide any images you require, set-up your ad campaign and account and set your budget. They may monitor and optimise your ads weekly, fortnightly or monthly while they are running. You may also get a performance report each month. No matter what platform you’re using, it’s very important to run multiple ads to test which achieve the best results. Even small changes in copy can have a major impact on your click through rate.
Here are a few questions you should ask anyone you look to engage in this role:
- Will we get a report of our results and how often? Many will charge extra for this which is normal, however be wary when there’s no report option provided – the beauty of online advertising is how measurable it is.
- What are you doing for the set-up fee and how many ads will you be running for us? Some companies only run one ad, a common and costly mistake. Also make sure you’ll be approving the ads before they go live. Some professionals will charge a percent on top of your ad spend, others will only charge you for exactly what you spent.
- Will we be charged for the actual ad spend or a set amount per month? (i.e. what happens if our budget is not spent for the month – will you charge us anyway or will you just charge us for the actual ad spend?)
All three advertising channels give you the option to set a maximum budget and all give you the ability to set a maximum CPA (the maximum you’re willing to pay for a click). If you use a professional they will be able to advise you on the appropriate budget to help you decide.
There is no minimum budget set by any of the platforms, but do keep in mind too small a budget will mean your ads may not show, or may stop showing part-way through the day (if your daily budget limit is reached before the day ends).
There are different types of ads on each platform, but for big budgets, Facebook and LinkedIn offer a premium level of advertising (ads that appear in the most trafficked areas of both sites). Facebook premium ads require a minimum spend of US$10,000 and LinkedIn display ads require $25,000 minimum spend. You can still advertise on both platforms with much smaller budgets.
What’s the average cost per click?
For Google Adwords, many keywords in NZ are still under $2 per click, but certain industries have higher demand and advertisers willing to pay a high CPA (Cost Per Acquisition) that push the CPC (cost per click) up.
Make sure you’ve had a Market Demand Report run before you start Google Adwords so you can select the most relevant but also affordable keywords with a lower CPC. This helps you avoid spending your budget on expensive keywords, limiting your results. If you haven’t had a Market Demand Report run before, you can get one for free until the end of February (see offer details at the end of this post).
If you wanted to target absolutely all New Zealanders on Facebook with no niche targeting – Facebook ads are currently NZ$0.66 CPC and $0.23 CPM (cost per impression).
Again for targeting all New Zealanders on LinkedIn with no niche targeting – LinkedIn ads currently range from US$3 to $4 CPC and the estimated CPM is around $2.
What sort of Click Through Rate (CTR) results can you expect?
The best return on investment if you’re measuring success based how many people will click on your ads, is usually gained from Google Adwords. This is because your ads only show when someone is looking for the services for which you want to attract new clients. You’re advertising to a motivated, pre-qualified audience.
Since your ads are therefore highly relevant to what the person is looking for, your CTR will be a lot higher. More clicks = more potential clients.
The average CTR for Google Adwords should be at least 1% in a healthy Adwords campaign.
The reason Facebook and LinkedIn get such poor CTRs in comparison is because people are not on those platforms looking for a product or service, so your ad is interrupting them (think of them more like TV ads). This is the main reason it’s unfair to compare Facebook and LinkedIn with Google Adwords. An excellent result for Facebook Ads would be considered a failure in Adwords.
Facebook ads average 0.05% CTR with 0.1% considered excellent. Facebook tends to average the lowest CTR, lowest CPC and lowest CPM (Cost Per Thousand Impressions) depending on your targeting and the budget of competing advertisers).
LinkedIn ads are also a form of display advertising (like those banner ads you see when you’re on sites like www.nzherald.co.nz) and the reported average of around 0.1% for display advertising is considered a very good result. Many report a lot lower results from LinkedIn ads.
Knowing these average costs, your daily budget should be set based on the usual considerations, such as the response you want to get, the CPA (cost per acquisition) you're willing to pay to gain a new client and so on – just as you'd take into account with any advertising you might be considering.
How can you determine the best platform on which to advertise?
This will depend on your product or service and who you want to reach. Briefly:
Google Adwords is the best way to reach people already looking for the service/s you offer and is as relevant for selling to consumers as to other professionals. The CPC tends to be higher but your CTR and the quality of leads you get (given they are already searching for what you offer) is also likely to be better.
Facebook Ads are the better choice if you want to be seen by people of a certain age, gender, relationship status or who have interests that match your services. With over 2 million New Zealanders on Facebook you’ve got a big potential audience. Facebook Ads are favoured by companies selling to consumers.
LinkedIn Ads are favoured for B2B (business to business) services when you want to be seen by people of a certain profession or job position, especially if you want to reach the decision maker, or when people may not yet know about your product or service, so search may be low. Yes, the CPA will probably be higher at the end of the day, and fewer people will probably click through, however the ability to target by industry and job title often means each person who clicks represents a high-value lead. There were 259,000 New Zealanders on LinkedIn as of March 2011.
Hopefully this (and the previous) post has given you a lot of helpful insights into the merits and considerations for each platform.
If you’d like free advice on the right platform for you and the sort of budget you need to consider based on your product, service and target market; feel free to get in touch with Anna.
FREE OFFER for New Zealand Professionals reading this post:
Avoid making expensive mistakes with online advertising by having your Market Demand Reports (a set of 2 reports) run before you commit to your spend.
Normally $99+ GST, your set of reports is FREE if you contact Anna and mention this article before the end of February 2012.
You’ll need to be a professional working within
Your report will tell you:
- The average number of searches made by New Zealanders each month for up to 300 search terms relating to your products and services.
- The estimated CPC (cost per click) per search term if you were to run a Google Adwords campaign.
- The trend in demand per search term over the last 10 to 12 months.
- The best in which to advertise – which months see market demand peak?
You’re welcome to share a link to this post with others so they can take advantage of this offer as well.
Do you agree with Anna's tips? What other tips would you give to professionals looking to advertise online?