Is social media advertising a good use of resources?
What is it about the allure of social media advertising that makes financial advisors think they should be advertising on Facebook? For most solo, small or medium-sized RIAs, purchasing social media ads is far from the best use of limited resources. With too many vendors offering a “What if you could get all the leads you need?” promise (often marketed through social media message infiltration or ads in your feed), financial advisors fall victim to the question, “What if I am missing out on an easy win?”
With algorithms limiting the organize reach of published content, social media advertising may also seem to be the only solution to gain attention on social media. Yet, reality often doesn’t live up to expectations. Many financial advisors find their social media advertising campaigns falter, yielding low returns and proving ineffective at attracting clients. Why does this happen?
5 social media advertising traps
Here are five common traps to avoid if you choose to invest in social media advertising.
1. Marketing the Wrong Offer
Remember that social media is first and foremost a social space. People are not typically there to shop for financial services. A hard sell, like “Get a second opinion on your portfolio” or “Schedule a free consultation” is ineffective. Instead, the content you share should offer value to your potential clients – think educational material, thought leadership pieces, or financial tips. Sharing a highly targeted lead magnet can work, if you can gain the exposure.
2. Posting on the Wrong Platform
Just because you have a Linkedin Company page, it doesn’t mean that’s where you should advertise. Understanding which platform your ideal client uses is imperative. Don’t promote on Linkedin to retirees; they aren’t there. Want to reach Gen Z? Forget facebook. Picking the wrong platform can result in wasted ad spend and ineffective messaging. Keep in mind, too, that users on the platforms are often there for entertainment (Linkedin excluded); financial advice ads may be overlooked.
3. Failure to market to a specific niche
Generic ads served to a broad audience rarely deliver the desired results. The beauty of social media advertising lies in its ability to target specific demographics. If you fail to target a specific niche, you are underutilizing the capabilities and likely wasting money as your ads get overlooked. You may also be up against significant competition for ad space, depending on the platform which can affect the price you pay or the ability to get in front of your audience.
4. Lack of Budget
While it’s true that social media advertising can be more affordable compared to traditional media, it’s not necessarily cheap, especially given the growing competition. With a limited budget, your ads might not get the exposure they need to make a significant impact. Advisors also often overlook the spend they’ll need to invest in resources (either an agency or an employee or freelancer) to run ads, test, learn and develop new creative executions. This overhead can crush the ROI of social media ads.
5. Lack of Established Funnel and Tracking
Social media advertising is not a magic bullet. It’s merely one way to attract people to the top of your marketing funnel. If your website is outdated or lacks clear messaging, or your lead capturing process is flawed, even the most compelling social media ads won’t result in clients. Make sure you have a well-designed funnel in place to take leads from your ad to your website (or landing page), adding them to your list, and nurturing them through your follow-up communication system. You’ll also want to have tracking in place before you advertise so you know from where the lead originated.
Marketing strategies for more profitable outcomes
While the idea of running ads may be appealing in its perceived simplicity, to be effective, social media advertising requires a well-thought-out strategy. It’s about more than just creating an ad; it’s about delivering the right offer to the right audience, on the right platform, at the right time. It’s about having an adequate budget, a strong follower base, and a robust marketing funnel to capture and convert leads.
Most solo, small and medium size RIA are better off investing in other strategies such that have a higher ROI. Consider content marketing, building a strong online presence through strategic search engine optimization (SEO), or formalizing relationship building with influencers who already have a loyal following and customer base that matches your ideal audience.
What should you do with your social profiles? Even though organic reach of content on social platforms continues to decline in favor of advertising dollars, you still want to post your content to your social profiles. You will have some reach among your followers, and more importantly, as people learn about your firm, whether organically or from a client or COI referral, they will look you up on their favorite social platform. Make sure your profile tells the story you want.
For advice on what direction to take your marketing, I invite you to schedule a call with me. If you’re set on doing social media ads, I am not your person. You will want to find an agency or provider who specializes in this type of advertising. This article from hootsuite is helpful to understand the basics of social media advertising and ad budgets.
This post is written in collaboration with Chat-GPT 4. Verified, enhanced and edited by a human.
