Cost of Video Ads on Social Media

In 2018, companies have spent over 90 billion on video advertising. It could either be on social media or on TV. Regardless of the medium, videos are increasingly popular in the advertising industry. In this digital age, mobile video is becoming the most popular video type, accounting for more than 50% of total video plays. Youtube, Facebook, Instagram and Linkedin are amongst the most popular platforms for social media video ads. Companies have been pumping in huge amount of marketing costs into these ads. But is it worth the investment? We will be focusing on some popular social media video ad platforms throughout this article.

Let’s check out the cost of each platform: 


1. Youtube Advertising

Youtube uses a Pay per Video View pricing model, irregardless of how long the video length is.

The average ad view costs $0.106 and $0.30 per view.

 

2. Facebook Advertising

Facebook uses a slightly different pricing model. They charge per video click, just like how Google Ads work (CPC). A typical price range per click on a video campaign is $0.15 to $0.50. 

 

3. Twitter Advertising

A promoted tweet costs $0.47 per completed view of video.

 

4. Linkedin Ads

Linkedin Ads have a fixed price of $50. 

All these 4 platforms are home to billions of social media users. Hence, the reach and exposure 1 video would get on these platforms is huge! So how much should i be spending on these platforms? Do i have to spend $1000 on video advertising? Would it be worth it?

 

To determine the answers to these questions, ask yourself this: Is the money you are investing in video advertising making a difference for your company?

1. Focus on your return on investment (ROI) per video

 

The question of whether you need to spend $10 or $1000 per video ad will be useless when you have a positive ROI. Let’s say you spent $100 on a Youtube Ad, and received at least $100 or more in return. In this scenario, your ROI is positive and you shouldn’t be worrying about spending too much on your video ads. Why? Because your advertising efforts are creating value for your company (You are earning a profit from your ads!)

 

However, this applies to ads that have a measurable returned value. For instance, an ad that requires an immediate purchase at the end of the video. Such ads will allow you to monetize your ROI by tracking how many purchases have been made through the video itself. But how can I track my ROI if the goal of my video does not require an immediate purchase? For instance:

  1. Increase Sign ups
  2. Obtaining leads
  3. Engaging viewers
  4. Increase brand awareness

 

Such marketing goals does not mean that there is no measurable ROI. Think about how you will be measuring the success of your video. It could be the number of leads you gained, and out of those leads, how many of them converted into sales ($). There is always a formula out there to trace your advertising goal to a monetary value. Once you have found a formula, you can then find out whether your returned value (eg. sales) is greater than your advertising expenditure. That is your ROI – and if it stays positive, there is no need to worry about the cost of video advertising.

2. What are the priorities of your company now?

Secondly, ask yourself this: what is the purpose/goal of the ad and how important are they at the moment? If it’s purpose is to generate more leads, and generating leads is not critical in your company right now, then there is absolutely no point spending so much on a video ad. Creating a video ad takes time and effort. The bigger the advertising spend, the more effort and time required to make it work (to guarantee a positive ROI). From brainstorming, to video production, video editing and tracking of results, the bigger the video ad, the more manpower and time needed. Channeling the bulk of your resources to more pressing issues related to the business would be a more worthy investment. However, if you are a large firm with sufficient manpower and resources to take on a big video marketing campaign, spending a bomb creating video ads will not be a big issue to you, as long as your ROI is positive.

3. What type of video ads are u making?

The type of video ads you are embarking on would affect your advertising spend. Making a TV commercial style ad would require more manpower and video equipment, and all of these cost money. Compared to an animated video ad that requires less resources to produce, other video styles may just require more resources in general, amounting to a larger advertising spend.

4. Does your company have the resources and expertise to make stunning video ads?

It is not uncommon to find companies engaging external advertising agencies to help create video ads for them. These video advertising services would often cost the company hundreds of dollars for a single project. However, small firms with a smaller wallet would not be able to afford engaging such agencies frequently. A large majority of small firms spend less than $10,000/year on advertising, indicating that they don’t have a lot to spend on ads. However, results have shown that small firms are spending more on marketing as a percentage of their total revenue. So with a tight advertising budget but a need to engage in more video advertising, how can small firms spend their budget wisely? Solution: Seek out affordable video makers online and create ads at a cheaper rate.

Try OFFEO – an online video ad maker

Built by a team trusted by Facebook and Instagram, OFFEO aims to help small and medium enterprises make stunning video ads at an affordable price. We believe that firms do not need to spend thousands of dollars just to make a stunning video ad on social media. Here is how much firms need to spend to create their own stunning social media ads:

Monthly Plan – $19/Month

Annual Plan – $169/Year ($14/Month)

At Offeo, we want to give firms the freedom to create their own video. Hence, our huge library of versatile video templates, stocks, animation effects and icons aim to inspire users to create their own unique style of ads. 

Making video ads on Offeo is affordable for all firms, regardless of their size and advertising budget.

In conclusion

It does not mean that all companies, within their existing capabilities, should spend huge amounts on video advertising and not see it as a concern. It is important to be aware of the side effects in spending more on ads. A bigger advertising spend would mean you may need to put in more effort producing and tracking results. One can spend $10 and get a return value of $100 or spend $1000 and get a return value of $2000 – although both are worthy investments, the latter requires much more effort on your employees to produce and track the results. For the same 100% increase in return value, spending $10 would be a more logical option, especially if your company does not have sufficient manpower and time to deal with a large video marketing campaign at the moment.

It should not cost you a bomb to create video ads on social media platforms. Your advertising budget should largely depend on how important the ad is to your firm, and how much time your company has to produce the ad and track its performance. 

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