I see a lot of financial advisers throwing money down the drain on social media advertising that does not work. If you are a financial advisor advertising on social media, don’t get played. I’m going to right some wrongs in this podcast. Coming right up!
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What is social media advertising for financial advisors?
I want you to go to LinkedIn and look at your news feed.
I’ll give you a minute.
Are you there yet?
You’re probably seeing that the first posting is one from someone in your network. It’s going to be a native, non-sponsored posting. You see some posting about somebody saying they are so glad they got a new job or something, right?
The second posting, however, is always a sponsored advertisement. You should see the word “promoted” in the top left hand corner of the posting. What’s happened is that some advertiser has paid LinkedIn to serve up this ad to you, based on your demographic information, browsing history, and activity history on the platform. For example, I am always clicking on military news, videos, and media because of my love of the US military. And by the way, if any of you are reading this who are either in active service or are vets, thanks so much for your service. Love you for protecting our freedom!
Well, whataya know, when I watch YouTube, the commercial that come up are related to services for military vets. Because of my tendency to watch military videos, YouTube thinks I am either a military person or close to someone who is. I’m profiled this way based upon what I spend my time doing on social media.
LinkedIn is roping you in by showing you a “cool” posting from someone you already know (supposedly, because they are in your network. And then once they’ve got you, they are going to serve up an advertisement so that hopefully you click. Once you click, LinkedIn can then say to the advertiser, “Hey, you owe us $15!” LinkedIn makes a lot of yen off people this way.
When financial advisors should advertise on social media
While advertising is a huge money makers for the social media platforms that do it, it generally does not work out as well for the advertisers. As far as social media advertising goes for financial advisors, I see many of you throwing money away by doing it wrong and others of you not doing it at all. In both scenarios the problem is the same and it is that you are missing the opportunity to reach the people who need you – and this comes at a very high price.
So you have to do it right – I’ll get to that part later – but first let’s start with the basic question of when it makes sense for a financial advisor to advertise on social media.
If you have a small network of followers, you might not be able to get visibility with new prospects. Let’s say you have 100 people following you. There may be a few prospects, 2 or 3 at most, but it’s not likely that they’ll be in the market for your services when you want them to be. You need a nice full pipeline and that comes from meaningful interactions on a larger scale than probably what a 100 person network can bring. Social media advertising can allow you to be visible to more people in this situation. You’ve got to expand your visibility, and you’ve got to do that by paying for it.
You’d rather die than write a blog
I’ve had great episodes with social media success stories Josh Scandlen and Ben Brandt who built networks of tens of thousands using keywords and SEO techniques. These are content producers (podcasts, YouTube videos, blogs).
Not every financial advisors is a great content producer with tons to say and the willingness/ability to put in the time to consistently post. If you aren’t able to leverage the power of Google’s algorithms, you may be the kind of financial advisor that social media advertising may be right for.
Social media advertising budget is big buckos!
How much should a financial advisor set aside for social media advertising? I’ll give you a baseline social media advertising budget but first let me explain what the contents are.
You’ll need to have someone that knows what they are doing to target the ad, create it, and test it. If you don’t know what you are doing, you’ll need to hire a professional marketing consultant. This usually goes for $500 or more per month. Agencies can cost in the thousands per month.
There are two ways that LinkedIn can charge you – by impression or by click.
- Impressions means that someone looked at your ad for a certain amount of time. I believe that at the time of this blog, it is three seconds. If someone looks at your ad for three seconds, that counts as an impression and LinkedIn charges you.
- You can also pay by click. If someone clicks on your ad to read it, you pay LinkedIn.
Messaging ads are generally far less costly than news feed ads. This is no guarantee and pricing always varies depending upon the advertiser, but I have seen clients of mine send paid LinkedIn messaging ads for $0.70 an impression. News feed ads are far more costly. Generally here you should not expect to pay less than $4 per ad, and for many clients of mine I’ve seen it as high as $10 to $15 per click.
Beaucoup bucks, no? Now you see why they want everyone to advertise!
I’d expect to put aside $500 to $750 per month in advertising budget if you want to get significant traction. You’re probably not going to get anywhere spending $150 a month.
So if you’re going to advertise, you really need to do it right – and that’s what I’m about to get to.
By the way, are you enjoying this blog so far? I’d love for you to join my membership if so. It’s really fun to work with me, it won’t cost you a fortunate, and you’ll be inspired and learn alot.
Here’s more info about it below. 😉
Financial advisors social media advertising success depends heavily on targeting
Social media platforms serve up your ad to people based upon what they know about them. Let me make the key point here that this is not always what they really are – it’s who the platform believes them to be.
As an example, let’s say a financial advisor is trying to reach parents of children who are either about to go to college or are currently in college. Maybe you run an ad intended to reach people ages 40 to 60 who visited the New York 529 plan website. This may put your ad in front of many qualified prospects – but it will also put you in front of:
- Employees of the New York 529 plan company
- Vendors to the New York 529 plan company – for example the IT team that created the site and maintains it
- Other financial advisors researching the New York 529 plan
These cohorts may turn out to be qualified, but they’re not really your ideal match, are they? Is $15 spent on one of these people clicking a great use of your money? Not really.
Targeting is essential for financial advisors doing social media advertising. Here are a few examples of how to do it.
You could specify Audience Attributes.
For example, you could select company name if you are trying to reach employees who work at Cisco systems. You could also specify a certain location, perhaps within 25 miles of your office, using the location filter.
You could also target the audience by job title, let’s say “senior manager” or “senior systems engineer.”
You could create Audiences.
You could upload a list of company names or known contacts. For these known contacts, you’d have to provide LinkedIn with their email, first and last name, etc. LinkedIn will find them on the platform and serve up your ad to this audience.
You can also create a lookalike audience. Let’s say you want to reach college professors. You can upload a list of college professors you know, and tell LinkedIn to create an audience with similar characteristics.
Financial advisors should know that targeting is the most important factor when it comes to social media advertising. You can have a so-so ad and if it’s targeted right it will probably work out okay. You can have the best ad in the world and if the target is poor you are going to get played.
How financial advisors can maximize success with social media advertising
Like I said, the most important thing is the targeting. And here are some other things to keep in mind if you are a financial advisor looking to get the most out of your social media advertising.
You create two advertising campaigns that are the same except for one variable. There is one group you call Group A (control group). There is another group you call Group B (variable group).
Let’s revisit the college professor example. You run the ad with targeting by job title. Group A has the title of “lecturer” while Group B has the title “professor”. How do you know which one does better? You look at the performance graphs for each campaign. LinkedIn creates these. Example of some LinkedIn performance graphs for past ads I have run are below. You can filter the graphs to hone in on different data.
LinkedIn Demographic Report Sample
On the demographic report you can see how many ads were sent to various job titles, the open rate, the absolute number of opens, etc.
LinkedIn Performance Graph: Sample
The performance graph will show you the sheer number of hits. Look here for nuances in hit flow.
Maximizing performance of social media ads is really important for financial advisors. The reason is that just like a borrower gets better interest rates when he or she has a better credit score, you are charged lower advertising costs for being a successful advertiser.
Remember that LinkedIn simply wants people to click on your ads. Showing the platform you are going to allow that to happen will encourage them to want to help you by lowering your cost of advertising (cost per click or cost per impression). I suggest testing with a small amount of dough before you spend the full monte.
As text is inherently limited in social media advertising, you’ll have to communicate in brief. For messenger ads, I recommend using no more than two or three sentences. It’s enough to see the “sponsored” tag flash in your inbox – make it worthwhile for them
Here’s another tip. Space out the text – no block text – and get to the point: what are you offering and why should it appeal to them?
Have a kickass CTA
The call to action shouldn’t be setting up a meeting – it’s too offputting in this business. They don’t even know you. Get the prospect into the funnel and allow the trust to build over time.
Get a great lead magnet that nurtures their understanding and raises curiosity about what you do. Or invite them to a webinar you are having.
These social media platforms are never 100% precise and I have noticed, unfortunately, that sometimes ads get served up to people that they shouldn’t. Use exclusions to make sure that certain groups are not getting your ads.
For example, you financial advisors should be excluding other financial professionals. You don’t need other financial advisors clicking on your ads so they can learn what you are doing. Even if they worked at a financial firm in the past there are probably less likely to want to learn about what you do. You also want to exclude vendors who just want to learn about you so they can sell something to you.
Thanks for reading the blog and I hope I have inspired you financial advisors to kick ass with your social media advertising.
Join my membership and you’ll receive monthly videos and workshops in which I guide you through the nuances it takes to put all these tips into effect and get the results you want.
I also suggest that you at least start following my podcast here as financial advisor lead generation is the main focus.
Thanks for visiting me!
-Sara Grillo, CFA
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