Skip to content

A small business guide to paid social media marketing

The rise of social media has created new opportunities for small businesses to reach customers and sell products and services. But simply having a profile and posting to your feed isn’t enough. If you’re looking to grow your business, you need to invest in paid social media marketing. Here’s a guide to help you get started – from understanding the difference between organic and paid posts, to following industry best practices to ensure you see a good return on your investment.

The difference between organic and paid content

While most small businesses in Australia and New Zealand are active on social media, many are only focused on organic content, which may not be as effective as you think. A smart social media marketing strategy incorporates both organic and paid content. Here’s the definition and pros and cons of each. 

Organic social media

Organic social media refers to all the content you share on your profile page for free, such as posts, photos, videos, memes, and the like. You can expect this content to be seen by some portion of your followers (depending on the algorithm each platform uses to rank content), your followers’ followers (if they choose to share your content), and anyone following the hashtags you use. 

Some of the main benefits of organic content are raising brand awareness and establishing your brand voice and personality. By creating and sharing posts, photos, and videos on a regular basis, you can also build an authentic relationship with your followers that is centred around the topics and values you have in common, rather than transactions. And since followers can leave comments on your profile page or direct message you to give feedback or request support, it’s an easy way to provide customer service. 

But there are also drawbacks. While you don’t have to pay to post organic content, you do have to invest time and money in creating it, and that can really add up. Especially when you consider how few people actually see it. The average organic reach for a Facebook post is about 5.5% of your follower count. For big brands with large followings, it’s often even less. That’s why paid social media needs to be part of your marketing strategy too.

Paid social media

Paid social media refers to any content that you have to pay to post – in other words, it’s advertising. Every social media platform offers different formats for paid content, but a few examples include: 

  • Shoppable Stories on Instagram
  • Pre-roll video ads on YouTube
  • Sponsored posts on LinkedIn. 

Generally, you pay on a cost-per-click basis, where you pay every time someone clicks on your ad, or cost-per-mille basis, where you pay every time someone views your ad. This is also called cost per thousand impressions.

One of the main benefits of paid content is the ability to target a specific audience, such as new customers, people who live in a certain geographic area, or people who like or follow certain brands, to achieve a specific outcome, such as driving traffic to your website, generating leads, or selling products. A lot more people will see your paid content than your organic content, so it can also help you raise brand awareness and attract new followers. 

The drawbacks of paid content include the cost, as well as the lack of transparency by social media companies around reporting. In the past, there were also concerns that customers would get annoyed if they saw too many ads in their social media feed, although that is less of a concern now that targeted advertising has become more sophisticated and the user experience has improved, thanks to swipe-up links and in-app checkouts. 

Why you need both

Given organic and paid posts each have different strengths and weaknesses, it’s a good idea to incorporate both types of content in your social media marketing strategy. That way you get the best of both worlds: you can build authentic relationships with your existing followers and expand your reach to new ones. One digital marketing agency that works with small businesses recommends a ratio of between 1:5 and 1:10 paid posts to free ones in order to optimise your marketing content without breaking the bank. 

A deep dive into paid social media ads

We’ve summarised the main benefits and drawbacks of paid posts on social media, so now let’s take a closer look at some of the different ad formats available on the top three social media platforms in Australia and New Zealand – YouTube, Facebook, and Instagram – and the specific use cases for each one. 


Over 78% of Aussies and over 86% of Kiwis use YouTube, making it the most popular social media platform out there. It’s used by pretty much all age groups, but on a global level, it tends to skew slightly male. Advertising on YouTube can help you build brand awareness and extend your reach, drive traffic to your website and generate leads. Because it’s owned by Google, you’ll need an AdWords account. Here are some of the main types of ads you can run on YouTube:

  • Skippable in-stream ads: These ads automatically play before, during, or after other ads on YouTube. They can be skipped after 5 seconds and are usually a maximum of 30 seconds long. While an estimated 76% of users ultimately skip these ads, research shows that even a skipped ad increases their chances of visiting or subscribing to your channel by 10 times, so it’s crucial to put your most important message at the beginning.  
  • Unskippable in-stream ads: These ads appear at the start, middle, or end of a video and can’t be skipped. They’re a maximum of 15 seconds long.
  • Video discovery ads: These ads appear in the related videos sidebar, search results, and on the mobile homepage.  


With over 77% of Aussies and 83% of Kiwis using Facebook, it’s almost as popular as YouTube. But if you look at the average time spent on each social media platform, it’s the clear winner. More women than men are Facebook users, and compared to newer platforms like TikTok, they tend to be slightly older. 

Advertising on Facebook can help you build brand awareness, drive traffic to your website or offline store, and increase conversions. You can also tap into sophisticated targeting tools, such as lookalike audiences, which allows you to find new customers who share similar attributes with your existing ones. You can also link to an Instant Experience in your ads. This is a full-screen destination page like an online checkout or download form, that users can access without leaving the Facebook app. 

Here are some of the different ad formats you can use on Facebook:

  • Photo ads: These ads feature a photo and up to 90 characters of text plus a 25-character headline. They can also include a call-to-action button like Shop now or Download, which you can link to your website or to a customised Instant Experience. 
  • Video ads: You can choose from several different video ad options, from short, looping ads that autoplay in users’ feeds, to long-form promoted videos. If you don’t have the resources to create a video, you can create a slideshow ad using multiple photos to get the same effect.
  • Carousel ads: These ads include up to 10 different photos or videos, each with their own link, in one ad. They’re best for showing different aspects of a product or service, or explaining a process step-by-step.
  • Collection ads: These ads put your products front and centre. They include a cover photo and up to four other photos, along with prices and other details.


Over 55% of Aussies and 57% of Kiwis use Instagram, making it one of the top social media platforms. It’s used by a wide range of age groups, but millennials are its core demographic. More women than men use it. Since Instagram is owned by Facebook, many of the ad formats are similar. Here are some of the ones you can choose from: 

  • Photo and video ads: These ads look like a normal Instagram post, but they’re marked as sponsored. You can also include a call-to-action button depending on your specific campaign.
  • Instagram Stories ads: These ads appear in between organic Stories. They’re up to 120 seconds long and can include photos or videos, as well as call-to-action buttons.
  • Carousel ads: These ads are similar to Carousel ads on Facebook. 
  • Collection ads: These ads are similar to Collection ads on Facebook.

The platform and ad format you choose will ultimately depend on your business, target audience, and the outcome you’re hoping to achieve. For a full list of ad formats available on these and even more social media platforms, including TikTok and Pinterest, check out this resource created by Hootsuite

Paid ads drive results

What every small business owner wants to know is the return on investment. How much bang for your buck do you get with paid ads on social media? Here are some of the top stats:

  • 54% of people browsing social media are doing so because they want information on potential products to buy
  • 48% of people will click on an ad from an unknown brand to learn more about them as long as they like the content
  • 67% of online shoppers have bought a product after seeing it advertised on social media

Social media marketing tips to boost your ROI

If you’re going to be paying for ads on social media, it’s important to know how to optimise them to have the most impact. Here are six key social media marketing tips based on industry best practices.

Have a clear objective

Setting a clear goal before you start any paid advertising activity is key. It will help you choose the right platform and ad format to achieve your goal and ensure you don’t end up wasting money because you’ll actually be able to tell if your ads are getting the desired results.

Design to drive performance

It’s a good idea to use a mix of static images and video in your ads to drive performance. Video tends to grab people’s attention as they’re scrolling, but a beautiful static image can really stand out. If possible, you should invest in quality photography, rather than generic stock images, and keep text to a minimum. 

Outsource where needed

Creating photos, videos, and copy for paid ads is a lot of work, and you may want to outsource it to a design agency if you don’t have the capacity or skills to handle it in-house. If you don’t have the budget to outsource the design process, try tapping into user-generated content. 

Target the right audience

The ability to target a specific audience is one of the biggest benefits of paid advertising, but the options can be overwhelming when you’re just starting out. Focus on finding new customers who resemble your existing ones with lookalike tools. And don’t forget to use relevant hashtags and SEO keywords in captions.

Look at your data and measure results

Monitoring the performance of your ads is vital. You can use dashboards provided by social media platforms and third-party analytics tools like Google Analytics to see how people are responding to your ads in real time, and adjust your artwork or budget as necessary to reach your goal.

Automate as much as possible

Between uploading your ads, managing your budget, and analysing your results, social media marketing comes with significant admin. Try to reduce your workload by automating as much of this process as possible. Frequent and consistent posting is one the most important factors for success.

Another smart way to step up your social media game? Using a buy now, pay later app built for small businesses like hummpro to increase your marketing budget without impacting your cashflow. Find out more here.


©2021 humm®pro is provided by hummpro Pty Ltd, ABN 94 639 701 312. Mastercard is a registered trademark and the circles design is a trademark of Mastercard International Incorporated.