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Your Guide to Paid Advertising on Social Media

Paid Advertising on Social Media, Everything you need to Know

What is paid advertising? Paid advertising on social media has become essential for businesses looking to grow and increase brand awareness. Partnering with a Facebook Ads Agency or Instagram Ads Agency can help businesses leverage targeted ad campaigns to reach specific demographics and improve conversion rates. A skilled paid social performance agency can optimise ad campaigns and track metrics like click-through rates and cost per acquisition to improve ROI. Investing in paid social media advertising can be a game-changer for businesses looking to expand their reach and improve their bottom line. We’ll cover everything you need to know about paid advertising on social media and how to leverage it for your business.


Current State of Paid Advertising on Social Media

Social media platforms such as Facebook, Instagram, TikTok and LinkedIn have revolutionised the way businesses advertise their products and services. These platforms offer various advertising options that cater to different business needs and budgets.


1. Facebook Ads

Facebook Ads remain a dominant force in social media advertising, providing businesses with a powerful platform to connect with their target audience. The platform’s sophisticated targeting options enable businesses to refine their focus and hit the bullseye when it comes to demographics and interests. With a range of ad formats constantly being updated and refined, from engaging carousel ads to immersive video ads, there are plenty of opportunities for businesses to test and refine their advertising strategies. However, as with any advertising platform, it’s crucial to keep a close eye on your budget to ensure you’re getting the best possible return on investment. 


2. Instagram Ads

One significant difference between Instagram Ads and Facebook Ads, which are both owned by Facebook, is that Instagram is more visually oriented, with a focus on photos and videos, while Facebook offers a broader range of advertising options, including newsfeed ads, messenger ads, and audience network ads. Instagram’s ad formats are diverse and engaging, including carousel ads and Instagram Reels ads, providing businesses with a variety of ways to promote their products. Using Instagram’s advanced targeting options, businesses can reach specific audiences based on demographics, interests, and behaviours. 


3. TikTok Ads

TikTok has become a social media juggernaut in recent years. With the launch of TikTok for Business, the platform has become an even more effective tool for businesses looking to advertise on social media. TikTok for Business provides businesses with a range of tools and resources to help them create and optimise their ads effectively. It offers a unique set of ad formats, including in-feed ads, branded hashtags, and brand takeovers, enabling businesses to create engaging and memorable content that resonates with their audience. In addition to its advanced targeting options, TikTok for Business also offers a suite of analytical tools to help businesses measure and optimise the performance of their ads. As TikTok continues to grow and expand, businesses must keep up with the latest trends and changes in the platform’s advertising options. 


4. LinkedIn Ads

LinkedIn is one of the most established social media platforms and has become a valuable resource for professionals across many industries. It provides businesses with a unique opportunity to reach an engaged and highly targeted audience through LinkedIn Ads. The platform offers a range of ad formats, including sponsored content, sponsored InMail, and display ads, giving businesses the flexibility to create campaigns that fit their specific goals and objectives.

One of the key advantages of LinkedIn Ads is its advanced targeting options. By using data from user profiles and behaviours, businesses can target their ads based on factors such as job title, company size, industry, and location, among others. This ensures that their message reaches the most relevant audience, increasing the likelihood of conversions and ROI. Additionally, LinkedIn Ads provide detailed analytics and reporting, allowing businesses to measure the effectiveness of their campaigns and make data-driven decisions to optimise their strategy. While LinkedIn Ads can be more expensive than other social media platforms, its audience’s high engagement and professionalism make it a worthwhile investment for businesses looking to connect with other professionals in their industry. 

Statistics and facts about the effectiveness of paid advertising on social media 

1. Social media advertising spending continues to grow: 

According to Statista, the global social media advertising spending is projected to reach US$207.10bn in 2023 and is expected to show an annual growth rate (CAGR 2023-2027) of 4.53%, resulting in a projected market volume of US$247.30bn by 2027.

2. Instagram and Facebook are popular ad platforms: 

Facebook and Instagram are two of the most popular platforms for social media advertising, with Facebook owning Instagram. In 2021, Facebook and Instagram were estimated to have a combined 61.4% share of the global social media advertising market. Another study from Statista records that Instagram accumulated $17.4 billion in ad revenues in the United States in 2020 and is projected to reach roughly $40 billion in annual ad sales in 2023. 

Whilst another report by Statista states, Facebook’s advertising revenue surpassed 114 billion U.S. dollars in 2021. Facebook has a 19.3% share of the total US digital ad spend. The average cost per click (CPC) on Facebook across all industries is $1.722. 92% of social media marketers are using Facebook for advertising. Facebook (and ads on Facebook) contribute to 80.4% of social referrals to E-commerce sites, based on a report from Small Business Trends.

3. Video ads are becoming more popular: 

Video ads have been gaining popularity on social media platforms like YouTube, Instagram, and TikTok.
They offer a visually engaging way to capture an audience’s attention and deliver a message. They have higher engagement than other ad formats, can be placed on a variety of platforms to increase visibility, offer advanced targeting options for better audience reach, and provide detailed metrics to track performance and optimise spending. 

In a study made by Statista, online video ad spending amounted to almost 75 billion U.S. dollars worldwide.

4. Influencer marketing is growing: 

Influencer marketing is a popular form of social media advertising, and it is expected to continue to grow in 2023. According to a report by Markets and Markets, The global influencer marketing platform market exceeded $6.0 billion in 2020 and is projected to grow at a Compound Annual Growth Rate (CAGR) of 32.0%, reaching an estimated $24.1 billion by the end of 2025

5. Targeting and personalisation are key:

With the amount of data available on social media platforms, targeting and personalisation are becoming increasingly important for social media advertising. Advertisers can use data to target specific audiences and create personalised ads that are more likely to resonate with them.

6. Ad-blocking remains a challenge:

According to Statista, the number of ad-blocker users worldwide is expected to reach 763.2 million in 2023. This is a significant increase from the 615 million ad-blocker users in 2019. Ad-blocking remains a challenge for advertisers as it limits their ability to reach their target audience. However, there are ways to work around ad-blockers such as creating native ads that blend in with the content of the website or using influencer marketing to reach audiences through trusted sources.

Predictions for Paid Advertising on Social Media in 2023 

Social media advertising is a constantly evolving industry, and businesses need to stay ahead of emerging trends to remain relevant. Here are some predictions for paid advertising on social media in 2023:

Emerging trends in social media advertising 

1. The rise of social commerce: 

Social commerce is the integration of social media and e-commerce, and it is expected to become a significant trend in the next few years. Social media platforms are already rolling out new features, such as Facebook Shops, Instagram Shopping, and Pinterest Shop, to help businesses sell their products directly on their platforms.

2. Increased use of augmented reality (AR): 

Augmented reality is a technology that overlays digital content onto the physical world, and it has the potential to transform social media advertising. Businesses can use AR to create immersive experiences that allow customers to try products virtually before making a purchase.

3. More focus on video content:

Video content has become increasingly popular on social media, and it is expected to continue to grow in the next few years. Businesses can use video ads to capture the attention of their target audience and increase engagement.

4. More emphasis on personalisation: 

Personalisation is a crucial aspect of effective advertising, and it is expected to become even more important in the coming years. Businesses can use data and analytics to create personalised ads that resonate with their target audience.

Changes in consumer behaviour that will affect advertising strategies 


One study explored the importance of various media advertisements on consumer behaviour stages such as awareness (AWR), interest (INT), conviction (CON), purchase (PUR) and post-purchase (PPUR). The consumer expectations of information from various media such as TV, radio, newspapers, magazines and the Internet are entirely different. Another study found that advertising has a great capacity to influence and persuade, and even the most innocuous can cause changes in behaviour that affect the consumer’s purchase intention. A third study aimed to determine the features of social media advertisements that influence consumer perception and their effect on purchase intention.

The success of an advertising campaign is largely dependent on how well it is tailored to the consumer behaviour of the target audience. By analysing consumer behaviour and catering to their needs, advertisers can create ads that connect with their audience on a deeper level, ultimately leading to greater engagement, brand loyalty, and sales.

New features and updates from social media platforms

1. Facebook Community Chat Feature for Messenger and Groups

Facebook has introduced a new feature called Community Chats for Messenger and Groups. This feature allows group organisers to create curated live Messenger chat groups. Community Chats will allow you to browse chats organised by announcements, topics, events, and more to connect with group members beyond just feed posts and comments. You can start a chat straight from your group or right in Messenger. Admins can now start a conversation about a topic and get in touch with their community in real time around the topics they care about in multiple formats, including text, audio and video.

2. Instagram now has native content scheduling

Instagram now has native content scheduling. This means that you can schedule your post and reels directly via Instagram for free. You can select the photo or video you want to post and schedule it on Instagram. You can also insert all your Instagram content details and choose “Advanced Settings” at the bottom. Enable the “Schedule this post” toggle and start planning your Instagram Post & Reels. 

3. LinkedIn has added post templates

LinkedIn has added post templates. This feature allows you to create posts that are visually appealing and engaging. You can choose from a variety of templates that are designed for different types of content such as job postings, company updates, and more. These templates are customizable and allow you to add your text, images, and links. This feature is available on both desktop and mobile versions of LinkedIn.

4. TikTok Series and Keyword Insights Tools

TikTok Series is a new way for creators to monetize their content with videos hidden behind a paywall that individual creators can set. This feature allows creators to offer exclusive content to their followers for a fee. This feature is currently available in the US and Canada.

The Keyword Insights tool is a new tool that helps advertisers uncover top-performing keywords and phrases in TikTok ads. This tool allows advertisers to explore “trending script keywords” and “trending music keywords” to help them create more effective ads. This feature is available globally.

Tips for adapting to the changing landscape of social media advertising


1. Stay up-to-date with the latest trends and changes in the industry to remain relevant.


2. Experiment with different ad formats to find the ones that work best for your business.


3. Use data and analytics to optimise your ads and improve their effectiveness.


4. Focus on creating personalised ads that resonate with your target audience.


5. Building a strong brand can help your business stand out from the competition and increase engagement with your target audience.

Analysis of potential challenges and drawbacks

The changing landscape of social media advertising presents several potential challenges and drawbacks. Advertisers need to be creative and adaptable to navigate these challenges and continue to reach their target audience effectively.


1. Ad-blockers: With the rise of ad-blockers, social media advertising has become less effective. Many users are now able to block ads on social media platforms, which can limit the reach and impact of advertising campaigns.


2. Ad fatigue: As social media platforms have become more saturated with ads, users are becoming increasingly immune to them. This can lead to ad fatigue, where users ignore or tune out ads altogether, resulting in lower click-through rates and conversions.


3. Privacy concerns: There are growing concerns around privacy and data protection, particularly in the wake of recent scandals such as the Cambridge Analytica scandal. This has led to increased scrutiny of social media platforms, and advertisers may need to be more careful about how they collect and use data from users.


4. Changes to algorithms: Social media algorithms are constantly changing, which can make it difficult for advertisers to keep up. Algorithm changes can impact how ads are displayed and who sees them, which can have a significant impact on the success of advertising campaigns.


5. Ad transparency: With the rise of fake news and disinformation, there is a growing demand for transparency around social media advertising. This includes information about who is paying for ads and how they are being targeted. Advertisers may need to be more transparent about their advertising practices to build trust with users.


6. Increasing costs: As social media advertising becomes more popular, the cost of advertising on these platforms is likely to increase. This could make it more difficult for smaller businesses to compete with larger ones and may lead to a consolidation of the industry.

Start planning for 2023 Paid Advertising on Social Media


Navigating the ever-changing landscape of social media advertising can be daunting for businesses, but it doesn’t have to be. To get started, get a custom proposal from us and steal our ideas. We will take the time to get to know your brand inside and out, so we can craft scroll-stopping campaigns that are sure to resonate with your target audience. Don’t let social media advertising hold your business back; drive growth with expert help from a paid social performance agency today.

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