How to Benchmark Your Social Media Advertising Costs
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An estimated 3,96 billion people globally use social media.
For context, that’s 51% of the entire world’s population.
That’s absolutely insane market penetration, and that means it’s no wonder that businesses around the globe are increasingly flocking to social media as the new standard for advertising.
Whether you’re just starting, or evaluating your existing expenses, it’s important to know roughly how much it’s supposed to cost you.
We’re here to demystify that.
In this article, we’ll go over rough benchmarks for how much advertising on each social media platform will cost you.
Please do note, however, these numbers are generally averages and your actual costs may vary quite a lot. We’ll be rounding most of these numbers upwards for your convenience.
When it comes to social media advertising costs, the most honest answer is simply ‘it depends”.
We also won’t be including the costs of hiring an agency to do it for you, but we have written an in-depth guide on digital marketing agency costs and overall digital marketing costs which cover that.
Facebook Advertising Costs
As we mentioned in the introduction, the most correct answer to “how much does social media advertising costs” is simply “it depends”.
That’s why in this article we’ll mainly be going over what it depends on, but we’ll still strive to give you benchmark figures from reputable sources.
When it comes to Facebook Advertising, the costs are especially variable.
In general, you’re looking at paying around R 8 to R 30 per click on Facebook ads.
As you can see, this is quite a big discrepancy. This is in large part because of the sheer volume of users on Facebook.
Popular and especially lucrative industries have a lot of competition on Facebook, which drives up the costs for some businesses disproportionately to others.
There are ways to mitigate this, however, as we’ll explore below.
Facebook Advertising Costs Benchmarks:
(Low end) ± R 8 ($ 0,5) Per Click
(High end) ± R 30 ($ 2) Per Click
As covered by Oberlo, existing studies show that the most concrete figures we can get for average CPC on Facebook are between R 8 and R 30, but this is highly dependent on the industry and many other variables.
- Impressions: ± R 20 ($ 1,3) Per Click
- Reach: ± R 16 (± $1) Per Click
- Lead Generation: ± R 10 ($ 0.60) Per Click
- Conversions: ± R 100 ($ 6,40) Per Click
- Link Clicks: ± R 2 ($ 0,12) Per Click
Since Facebook is such a large platform, we can also use this data from AdEspresso which breaks down CPC by the most common advertising objectives used on Facebook, to give us a slightly better benchmark if you know what objective you’re after.
The average cost per bidding model on Facebook:
- CPC (Cost Per Click) ± R 16 ($ 1)
- CPM (Cost Per 1000 Impressions) ± R 120 ($ 7)
- CPL (Cost Per Like) ± R 16 ($ 1)
- CPA (Cost Per Action, Downloads) ± R 88 ($ 5)
Lastly, another useful benchmark is using the average cost per bidding model on Facebook, which comes to us courtesy of WebFx.
Facebook Advertising Costs Factors:
Bid strategy is a big part of optimising your Facebook advertising costs.
Facebook’s ad system works on a per-bid basis, i.e. when choosing whose ad to show to a particular person the first thing their system looks at is who is willing to pay the most to have their ad shown.
This means that whilst it may be tempting, it’s often not a good idea to be the lowest bidder.
Higher bids can often cancel out the higher costs by allowing us to reach consumers who are more likely to convert.
This increased conversion rate is an important consideration, that can also translate into higher lead quality for leads-based campaigns.
- Ad relevance
Another key consideration is the relevance and quality of your Facebook ad.
Facebook wants to showcase the highest quality ads on their platform, so investing in having high-quality images and copy can often bring our costs down.
The second function of relevance we can use is making sure we’re targeting the right, most relevant, groups of consumers.
Like with any form of marketing, we want to reach the right people with the right message at the right time.
- Your chosen objective.
Different objectives have different costs attached because of how Facebook optimizes around them.
Generally speaking, objectives closer to the end of the sales funnel will cost more than higher-level marketing activities like creating brand awareness.
This is mainly due to competition. Your competitors also want to invest in marketing to consumers that are ready to convert now, and so they’ll likely also be bidding on these people.
Some businesses find value in investing in higher-level marketing at first, to build up custom audiences through creating a following or just by generating brand awareness we can use later on.
How much competition is in your industry or niche?
As we mentioned above Facebook’s pricing uses a bidding system, so more competition means higher prices.
The main ways of working around this are creating our own audiences we can remarket to or by finding underserved niches.
Making your own custom audiences is easy with Facebook, once you start to gain enough of a following you can set up “lookalike audiences” of similar people that will be unique to your business.
It’s worth noting though this relies on having the right people follow you, so you want to think about how you can encourage that to happen.
Secondly, by refining our targeting down and experimenting with what works we can very often find segments of the market that aren’t being used to their full potential.
This lets us cater to messages specifically towards them and benefit from the lower CPC costs.
Who Should Use Facebook Advertising?
Most businesses can stand to benefit from Facebook ads.
As you probably already know, Facebook is the world’s largest social media platform by far, and as such it has an absolutely enormous reach of 2.7 billion active users.
This, combined with their sophisticated targeting and segmentation tools, lets you target almost any market imaginable over their platform.
It’s rare to see a business that can’t benefit from some form of Facebook ads.
How to Bring Down Facebook Advertising Costs
- ABT – Always Be Testing
When it comes to the world of social media advertising, your motto should be “always be testing”.
The only way to know for sure what works for your ad strategy is to try out many different things and see what works in practice.
In general, we give campaigns a week or two to run and adjust them from there if they’re not working.
The following are good places to start if you’re wondering what to experiment with:
The content of your ad is very important because it affects their performance on two levels.
Firstly, having good and relevant content makes your target market more likely to interact with your ads. This can dramatically improve your conversion rates.
Secondly, as we mentioned previously Facebook prioritises showing users high-quality ads over low-quality ones, so it can bring down your CPC.
Your audience is another very important variable to consider.
Highly sought-after audiences are the most expensive to target, but usually for good reason (because they’re the most profitable).
As we mentioned earlier, the best ways around this are by creating your own audience that your competitors can’t access or drilling down to high performing more niche audiences.
You also need to balance reach with relevance.
Not everyone is going to be your customer, so you need to make sure that you’re targeting the right people.
Showing your ads to someone with no interest in your business’ offering is just wasted money.
On top of this, we need to make sure not to make your audiences too niche either, or you may be losing out on potential customers.
- Think About Landing Pages
Lastly, you want to consider your landing page.
After you’ve done all the work to get users to come to your site from a Facebook ad, the last thing you want to do is lose them right at the end.
That’s why having a well-optimised landing page is crucial.
How does this relate to costs though?
Having a good landing page is crucial in boosting conversion rates, meaning you earn more money overall for the same ad spend.
Instagram Advertising Costs
Since they’re now part of the same company, Instagram’s ad system is very similar to Facebook Ads.
If you know how to run Facebook ads, you can run Instagram ads. They’re even handled through the Facebook Business Manager platform.
Again, we’d love you to give you a concrete number or formula but there are just too many variables to consider.
In general, you can expect to pay an average of around R 12 per click and R 110 per thousand impressions.
Do remember though that these numbers are an average.
The cost varies wildly according to variables like the industry, the amount of competition you’re up against and the target market.
People who are skilled in digital marketing can bring costs down considerably, by optimising your targeting and message to bring down the CPC.
Instagram Advertising Costs Benchmark:
Just like Facebook, Instagram uses a bidding model that charges on either a CPC or CPM basis.
CPC ± R 12 ($ 0,80)
This cost is highly variable and can be as much as R 47 ($ 7) per click in highly competitive industries, according to a 2020 guide by Sh1ft Digital.
CPM ± R 110 ($ 7)
Average Conversion Rate: ± 1 %
This number is taken from a 2014 study by Shopify. According to their data, Instagram has the fourth-highest conversion rate of all the popular social media platforms.
Instagram Advertising Costs Factors:
There are four main factors we can control that determine how much our Instagram ads cost us.
Namely: how much you choose to bid, how relevant your ad is to its intended target, the overall objective you choose on Facebook Business Manager and the amount of competition around the audiences you’re targeting.
These factors are very similar to those used by Facebook ads because they’re run through the same systems.
We’ll go over each of them briefly below:
The first, most important, factor is the bid.
I.e. how much are you willing to pay to show your Instagram ads to each consumer.
It may seem like we want to set this to as low as possible or leave it on automatic bidding, but that’s often not the case.
Instagram will always prioritise highest bids because it’s in their best interest, so if you’re looking to reach the high-quality prospects you need to be “on top of the list” of bidders to reach them.
That’s why it’s often worth manually setting your bid amount to slightly more than the recommended amount, to ensure your business is always the highest bidder.
If your competitors all use automatic bidding, or the lowest costs possible, this means your ads will always be shown before theirs.
The increase in conversion rates from reaching the high-quality prospects will, more often than not, offset the additional costs.
- Ad relevance
Instagram assigns a “relevancy score” to each ad uploaded to their platform, which can also determine which ads get prioritised.
The purpose of Instagram is fundamentally to serve consumers with content that’s relevant to them, and they maintain this policy with adverts.
This means that if you and a competitor are offering identical bids for the same audience, the more relevant ad will get chosen.
How do they determine relevance?
The basic component is simply user engagement with the post.
The more people in a particular group view, like or comment on your ad, the more relevant Instagram assumes it is.
As such, we always want to make sure our ads are relevant and speak to the people we’re trying to target with them.
Having a high ad relevance score drives down bid costs.
The objective you choose in Facebook business manager can also have a big impact on cost.
Depending on the objective, Instagram will optimise how they show your ad around the different goals you selected.
So, for instance, if you chose “Traffic” and “Page Visits” as the objective, they will prioritise showing your ads to the people most likely to click through to your landing page.
The way they determine this is by working out an “estimated action rate” based on how likely a given user is to take the action we optimised around when choosing an objective.
Changing the objective can often have a huge impact on driving costs up or down because different groups of consumers engage differently with social media advertising.
If you find one objective isn’t working at all, it’s often worth playing around with the offer and objective you’re putting out there.
High estimated action rates can also drive down your bid costs.
The last important factor we need to consider is the amount of competition around the groups of people we’re targeting.
The most popular or profitable groups of people will usually cost the most to reach since Instagram uses a bidding system to determine costs.
The more people bidding, the higher the cost per bid goes.
You don’t have a lot of control over this, but there are things we can optimise around.
The most effective method is often to go after smaller niche groups within our larger target market.
By doing this we can sometimes find high performing groups our competitors haven’t tapped into yet.
Secondly, we can try creating our own unique audiences. This is one of the big benefits of getting customers to follow you on Facebook and Instagram.
You can use the kinds of people who choose to follow you as a template for lookalike audiences of similar people and try to find an untapped market that way.
Who Should Use Instagram Advertising?
Instagram ads are the ideal solution for companies looking to expand their market reach or reach a younger audience.
Instagram is the world’s fourth-largest social media platform by the number of monthly users, with over 1 billion people visiting the site each month.
Instagram’s demographics tend to skew younger than that of Facebook, which makes it appealing for reaching certain market segments despite having a significantly smaller reach.
A big reason to use Instagram ads is that they’re incredibly easy to set up if you’re already using Facebook ads.
It’s an entirely new platform with different demographics and approaches for you to explore, and you can set up all your campaigns using the same tools you’re already using for Facebook.
Some sources have also found that Instagram users are more likely to engage with branded content and recall ads on their platform.
All this means that it’s great for reaching certain harder-to-reach demographics, like younger people, who are increasingly ad-sensitive.
How to Bring Down Instagram Advertising Costs:
- Always Be Testing
Just like with Facebook, and all forms of social media advertising, the philosophy of “ABT” or “Always Be Testing” is a good one to follow.
The only way to know for sure if something works in the world of digital marketing is to actually run your ads and see what works, and what doesn’t.
There are ways to do this more, or less, efficiently though which can bring down your overall costs.
For instance, don’t launch a single campaign with one big audience and try to figure out what’s working.
Rather, split your audience into sub-categories so you can home in on the people who are actually most likely to convert.
Optimising your conversions this way is one of the best ways to manage costs because it allows you to identify friction areas and resolve them.
A/B testing is natively built into the Instagram platform, so it’s also a great way to compare the performance of different creative elements or copy for your ads.
- Create Good Ad Content
Speaking of ad content, you want to make sure your ads match the tone of the platform for maximum success.
Consider the best ways to showcase your product visually, since Instagram is an entirely visual platform, and how you can fit in with the rest of the content on the platform.
You want to stand out from the crowd, naturally, but not too much.
Invasive hard-sell propositions generally won’t work, because people aren’t looking for them when they go to Instagram.
Instead, you should focus on visually showcasing the features of your products to create interest in it, either now or later.
Having good content will improve your relevancy score, which can noticeably bring down your costs, so it’s work investing in.
- Optimise Your Audiences
As we mentioned previously, different audiences can have a huge impact on your CPC costs, and overall costing for Instagram ads.
Industries with a lot of competition like fashion, beauty or food can be hard to get started in because of this.
The most effective ways around this are to either create your own audiences by establishing a following on the platform, or remarketing to other platforms, and mining down to niche audiences.
For instance, bidding on users interested in just “swimwear” may be prohibitively expensive for a new business, but what if you established a page for your brand and remarketed to all the people interested enough to follow you?
Or, what if you tried to find a niche in the swimwear industry by targeting people with an interest in both swimwear and water sports. This way you could sell a performance swimwear line more effectively.
There are lots of opportunities on the platform that may not be immediately obvious, so it’s worth sticking to our first suggestion and experimenting heavily with your audiences.
- Good Landing Pages
A common mistake we see businesses make is having a good social media strategy but failing “right before the goal” because their website’s landing pages are bad.
Optimising your landing pages is essential, we want to remove any friction that might prevent people from converting.
You want to make sure the landing page is consistent in terms of the offer and feel of the ad that brought people to your site, and that it’s as easy as possible for them to take whatever action you want them to.
Things you can experiment with are the creative elements, emphasising the path you want users to take or the overall UX of the page.
LinkedIn Advertising Costs
LinkedIn, the “social media network for professionals”, is a popular fixture in the B2B marketing space because of its positioning.
It’s known for being a great platform to quickly generate high quality leads for your business, because of the ability to precisely target people by seniority and position inside different companies.
The infamous downside, however, is that LinkedIn is the most expensive social media platform to advertise on.
You can expect to pay an average of around R 80 per click, R100 per 1000 impressions and R 12 per sponsored message send.
These prices are again highly variably, but they tend to skew much higher than platforms like Facebook as we can see by the averages.
Whether these high prices are worth it is mostly up to your strategy and as with all the other platforms, there are ways of mitigating costs to improve your overall ROI.
LinkedIn Advertising Costs Benchmark:
Like Facebook and Instagram, LinkedIn uses a bidding model to determine how ads are charged.
They have the standard CPC (cost per click) and CPM (cost per thousand impressions) options as well as a CPS (cost per send) option for LinkedIn Message ads.
From WebFx again, we can find the following figures as a rough benchmark for Linked ad costs:
CPC: ± R 80 ($ 5.3) per click
CPM: ± R 100 ($6.6) per 1000 impressions
CPS: ± R12 ($ 0.8) per send
LinkedIn Advertising Costs Factors:
If you’ve been reading along, you’ve probably recognised a pattern by now.
The factors influencing how much we’re charged are highly similar across the big platforms because their pricing models and ad systems have become somewhat standardised over time.
This means a lot of our advice is applicable across platforms and follows the same general structure.
There are still some subtle differences though which are worth noting, which is why we’ve still included this section.
Following the previous structure, we’ll briefly go over the main elements that impact how much your LinkedIn ads cost:
The first element is again, how much you’re willing to bid.
As we mentioned in the introduction LinkedIn tends to have very high bids, because many b2b companies operate on higher margins than consumer goods industries.
I.e. a law firm is willing to spend more to get a big corporate client than a lone-practice lawyer looking for an individual client.
The important thing to consider with LinkedIn ads is making your bid high enough to be competitive, but still as low as possible to maximise your ROI.
Sometimes this isn’t possible, and we have to work to bring down costs in other ways.
- Ad Relevance
As a network for professionals, LinkedIn obviously wants their advertising content to match the overall tone of the site.
This means they have a stricter ad policy and review process than many other sites, and they also prioritise ads by their relevance and how good they are.
Investing in high-quality ads is also a good idea for LinkedIn, and they offer lots of different mediums to experiment in.
A particularly effective tool is LinkedIn message ads, which allow you to send personalised messages to your target consumer’s inbox.
They see a much higher engagement and open rate than normal display ads, but this means your messaging and ad relevance is even more important.
LinkedIn, like Facebook and Instagram, lets you optimise around different objectives.
This can also play a huge role in your costing as again, targeting consumers nearer to the end of the funnel is generally more expensive because of the increased competition.
I.e. optimising your ads for leads rather than impressions is much more expensive, but can be worth it if you’ve set your campaign up well and you’re getting high-quality leads.
This is largely a question of experience and your overall goals, as there are ways to optimise your costs around any goal.
Lastly, competition is another huge factor in cost due to the bidding model being used by LinkedIn as well.
Popular industries can get prohibitively expensive to advertise on, especially if you’re up against big corporate b2b enterprises.
The same general advice applies for how to get around this.
You can either build your own network by pursuing a content strategy that provides professional value to your target demographic or try to find people your competition aren’t targeting.
For instance. there are likely a lot of people targeting “managing directors” with all kinds of offerings, but they may not always be the primary decision-maker.
Targeting specific department heads relevant to your industry instead could be much more profitable then.
Who Should Use LinkedIn Advertising?
LinkedIn is primarily useful as a B2B platform because it’s so professional by nature.
Consumer goods almost look out of place on their site.
This is not to say you can’t use it for that purpose, but it’s much harder.
That’s why our general recommendation is to use LinkedIn purely as a B2B platform for creating high-quality leads.
Its main selling point as an advertiser is being able to precisely target decision-makers and you should take full advantage of this if you are in the B2B industry.
How to Bring Down LinkedIn Advertising Costs
- Always Be Testing
LinkedIn’s platform also allows for easy testing and manipulation of every aspect of your ads to fine-tune their performance, much like Facebook.
You should take full advantage of this and conduct regular A/B testing or comparisons of different ad elements to find out what works.
The only way to know is to experiment, as every industry and target demographic is slightly different.
- Find the Right Creative
You want to make sure your creative elements are optimised for the platform and the industry you’re selling to.
Because it’s such a business-focused platform, any ad content needs to immediately speak to the need your product or service fulfils and why the person you’re talking to should care about it.
Try to also think about what your ideal decision-maker, or consumer, values and focus on that.
In generating leads, softer selling can also often work wonders.
Phrasing things as less of a time commitment can cause engagement rates to spike because people feel less pressured if they click on your ad.
E.g. phrasing your CTA as “Apply Now” implies they’ll have to fill out a form, which nobody likes doing. “Enquire Now”, however, implies you’ll do the work for them if they give you their contact details, so it may be more effective in certain industries.
- Choose the Right Audience
LinkedIn can be very expensive, and we need to do whatever we can to mitigate that to extract value from the platform.
One of the most effective ways of doing that is refining down your audience to reduce the amount of competition you’re bidding against.
Our general advice for Facebook and LinkedIn ads hold here too, the two easiest ways are to create your own custom audiences or to find a group that your competitors aren’t targeting yet.
Split test different audiences and focus on what works.
- Optimise Your Sales Process and Landing Pages
Since LinkedIn is so expensive, you want to optimise your sales funnel outside of it as much as possible to make sure you’re still extracting value.
High-quality leads are worthless if your sales team aren’t “on the ball” and converting them at a high rate.
Landing pages can also play a very big role if you’re directing people towards a website.
Overall, think holistically about your sales funnel to identify weak points and improve on them, just like any other platform.
YouTube Advertising Costs
YouTube is now the second most used social media platform in the world, tied with WhatsApp, and the premier source of video entertainment amongst younger audiences.
This makes it an ideal platform, then, to reach a wide variety of people when they’re engaged with video content.
Since they’re a Google property, you can also manage YouTube ads through the Google Ads platform, and access their rich targeting options to help you show your ads to the right people.
This does mean their ads also use a bidding basis to charge you, and as such the costs are variable like all the other platforms on this list.
You can expect to pay anywhere from around R 2 to R 5 per click and R 120 for 1000 impressions of your ads as a benchmark.
There are two major downsides to YouTube ads, though.
First that creating high-quality video content can get expensive quickly, and secondly it can be difficult to get people engaged with your content once you’ve made it.
Still, YouTube has in many ways replaced prime-time TV as the go-to slot for high impact video advertising, so it’s worth considering at least for many brands.
YouTube Advertising Costs Benchmark:
It’s worth reiterating that like all the other platforms on this list, YouTube’s costs vary dramatically by industry, target market and message.
CPC: ± R 2 ($0.1) per click to ± R 5 ($0.30) per click.
WebFx gives the above range as their general estimation for the average CPC on YouTube’s platform.
CPM: ± R 120 ($7,5) per 1000 views.
This figure comes from a blog by IMPACT as their experience on the average CPM on the platform.
YouTube Advertising Costs Factors:
- The Type of YouTube Ad
YouTube offers several different formats of ads, which are all charged differently. The main ones are in-stream ads, in search ads and in-display ads.
In-stream ads display in between, or before, videos consumers are watching on YouTube, in search ads display in the search results when consumers are searching for something on YouTube and in-display ads display alongside the video player (just above the recommended videos).
Playing around with these formats can be a great way to optimise costs, because you may find that what doesn’t work as an in-stream ad works better as a highly targeted search ad targeting people much like you would a long-tail keyword on Google.
Next, your chosen bid amount also has a big impact on cost.
YouTube also uses a bidding system to determine which ads get shown, similar to the Google Ads system.
Like all the other platforms, you want to find a good balance of cost and reach to ensure you’re staying above the competition.
- Ad Relevance
YouTube doesn’t directly promote ad relevance, unlike the other platforms, other than disallowing certain types or categories of ads.
This doesn’t mean we can skimp on the quality of our ads though, as having a high-quality video ad is absolutely crucial if we want to see any decent ROIs on the platform.
YouTube users are notoriously fickle about viewing ads, so you need to grab their attention within the first few seconds and hold it there if the ad is going to have any impact at all.
This means investing in video production, which as we mentioned above can get expensive quickly.
The main way around this is to have highly targeted offers that reach people who are interested in your offering.
Lastly, because we’re still using a bidding system on YouTube competition is a major factor in how much it costs to display our ads.
The advice from all the other platforms holds here. We want to either create our own following on the platform and remarket to them as well as our Google search audience, or we want to find relevant niche groups that our competition isn’t marketing to yet.
Who Should Use YouTube Advertising?
YouTube advertising is a great way of showing off your business’ offering visually.
Video as a format is one of the most impactful ways we can deliver content online, and as such you need to take full advantage of this if you’re going to make good use of the platform.
Since it’s the second largest search engine in the world behind Google, it can also be used as part of an SEM strategy through paid search on the platform to good effect.
Overall, YouTube is a great platform for businesses looking to create a high impact and visually-driven ad campaign, but it’s more challenging and expensive to set up ad campaigns for the platform than any of the above options.
How to Bring Down YouTube Advertising Costs
- Always Be Testing
The now perhaps tired mantra of “ABT” holds for YouTube ads too.
Creating engaging video ads can be hard, but the upside is that we can easily use tools like split testing and video editing to adjust our strategy on the fly.
Having a good creative partner here also helps tremendously, as they might already know what kind of video works on the platform.
Aside from this, you should also be experimenting with targeting and placement strategy to find what works best for your brand.
- Invest in High-Quality Video
As we mentioned before, investing in a high-quality video campaign can be expensive but it is just that: an investment.
You should obviously include it in your advertising budget, but it can be a great way to add variety and impact to the advertising content you’re putting out there.
Skimping on video is seldom a good idea because this means you’re more likely to be wasting the money spent on promoting it.
Investing in high-quality video content should thus earn us money long-term despite the big initial investment.
- Choose the Right Audience
Like with all the other social media platforms, choosing the right audience is essential.
A great way to drive down costs is to refine your audience down as you go, eliminating weak performing groups and expanding the groups of people that are engaging with your YouTube ads.
- Optimise Landing Pages
As with all the other platforms, too, you shouldn’t skimp on your landing pages.
After all that investment in creating a high-quality video and finding a way to make it work for you, the last thing you want is to have people bounce right at the end of your funnel because of a bad landing page.
Invest in a high-quality user experience and use analytics tools to identify and remove friction points as you go,
We hope this helped you benchmark how much your social media marketing is going to cost you.
Sadly, it’s almost impossible to give exact figures when we’re discussing this because of the huge number of variables that come into play.
The good news is, though, there are always ways to try and bring down your costs to make social media marketing work for you.
And, once you find the magical recipe that works for your industry, it’ll carry on working for a long time to come.
If you enjoyed this article or found it helpful, check out more e-commerce marketing content on the inSyte blog or listen to the inSyte Podcast.
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