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Paid Social Marketing: Pro Tips for Small Businesses The devil is in the details.

By Kumar Arora Edited by Frances Dodds

Opinions expressed by Entrepreneur contributors are their own.

POJcheewin Yaprasert Photography | Getty Images

There are two kinds of social marketing: organic and paid. With audience demographics and interests becoming more diverse than ever, paid social marketing is an efficient way to target customers with demographics and interests that align with your business. It's considered best practice to invest in social marketing at least in the beginning stages of your business, because it helps get the ball rolling. Below are five action steps for a successful paid social marketing campaign.

Decide on a realistic budget

A good marketing campaign yields the highest possible Return On Investment (ROI) or, in marketing terms, Return On Advertising Spend (ROAS). Determine your monthly budget to go towards paid social marketing. How much should you spend on marketing? Generally speaking, small to medium-sized businesses put aside 10 to 15 percent of the earnings for marketing expenses.

The devil is in the details

You should be able to set detailed perimeters, especially if local targeting is integral to your business. How detailed is the audience demographic specifications on the ad platform of your choice? In terms of local targeting, is your ad range specific enough to target only the areas your business covers?

Find out whether you can narrow down the geographic location settings. For example, if you run a dry cleaning business in the Upper West Side of Manhattan, it doesn't really make sense to include people who live in the Upper East Side in your local targeting.

Similarly, interest targeting alone could lead to a meaningless campaign. For example, if you run a cafe in New York, it serves no purpose for someone who actively interacts with coffee contents but lives in Los Angeles to see your ad.

First determine whether local targeting is essential to your business. If it is, you should be able to specify the target to cover only your primary area of business. You might need granular targeting to make this possible.

Related: Content Marketing Secrets for Every Social Media Platform

Identify who contributes to actual sales

Which segment of your customer demographics contributes to sales the most? Is it men in their twenties or women in their thirties? Does your data show any correlation between sales and customers' location--urban vs. rural? Demographic analysis is a must to understand the audience and launch a successful paid social campaign.

Related: Is Your Marketing Working? You Won't Know Till You Test It

Choose the right space

Find the optimal advertising media for your business. Is your product or service most popular on Instagram? Instagram requires visual representation of your business, which means you need to have resources to design images. Choose the right media with your business's appeal point and resource allocation in mind. For instance, Facebook and Instagram require a lot of graphic designing and occasional video editing. If you're unsure where to start, social listening tools like Hootsuite is a great place to get to know the different social networks.

Related: How Your Business Can Capitalize on Facebook Live

Measure success with social media KPIs

This is especially relevant to Online to Offline (O2O) businesses. Even with high impressions, engagement and click-through rate of an ad, there's no way to find out just how much the ad has contributed to actual store visits and sales. The only way to find out the efficiency of social ads is to ask the visitors how they heard about your business, especially whether they've heard from your paid advertising source. Identify the percentage of sales that comes from paid social marketing so that you can set your KPIs accordingly.

Kumar Arora

CEO of Arora Ventures & Trust Foods

Kumar Arora is a serial entrepreneur, investor and shark on CNBC’s hit show “Cleveland Hustles,” produced by Lebron James. Currently, he serves as CEO of Arora Ventures along with Trust Foods, an emerging startup CPG brand. He also serves as a consultant and advisor in a variety of industries.

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