You've probably heard it a dozen times: "You have to be on social media."
Everyone from your local café to the big-name brands are running ads. It often feels like the secret sauce for rapid business growth.
But there’s another side to the story. You hear the horror stories: wasted ad spend, campaigns that went nowhere, and a mountain of effort for minimal return.
It raises a fair question: Is social media advertising worth it for your business in 2025?
The most honest short answer is that it depends.
For most small to medium-sized Australian businesses, paid social can be an incredibly valuable engine for growth. But it’s not a magic bullet. To get a real return, you need to go in with a clear strategy, a realistic budget, and the right expectations.
In this guide, we'll cut through the hype and give you the full picture. You'll learn the genuine benefits, the common pitfalls, and a practical framework to decide if paid social is the right move for your business right now.
Key takeaways:
1. Paid social can be a powerful growth tool, but only with the right strategy, budget, and expectations.
2. It offers unmatched targeting, brand visibility, and real-time performance insights.
3. Success depends on clarity of goals, knowing your audience, and having the resources to execute.
4. Common pitfalls include poor campaign setup, unrealistic expectations, and “set and forget” mindsets.
5. ROAS is a great benchmark for performance. Track it and optimise based on real data.
6. If you’re ready to invest strategically, paid social media can deliver serious returns. If not, it can drain your budget fast.
What Are the Benefits of Social Media Advertising
Once upon a time, posting on Facebook meant your followers actually saw it. Not anymore.
With algorithm changes and endless competition for attention, organic reach has plummeted. These days, if you want to get in front of the right people, paying for placement is no longer optional. It’s the most reliable way to make sure your message cuts through
The benefits of these platforms are unmatched.
“55% of marketers say that social media has directly helped them increase their sales.”
— Forbes Business Council, 2023
Unparalleled Targeting Capabilities
The real power of social media advertising isn't just the sheer number of people you can reach; it's the ability to find the exact right people.
Think of it like this: traditional advertising is like putting a billboard on the M1 and hoping the right person drives by. Social media advertising, on the other hand, is like getting to send your billboard directly to the phones of people who have recently searched for your product, live in your local area, and follow your competitors.
You can target audiences based on:
• Demographics: Age, gender, location, language.
• Interests: Hobbies, pages they follow, brands they like.
• Behaviours: Purchase history, online activities, how they've interacted with your website.
• Custom Audiences: Upload your email list to show ads to existing customers or create a "lookalike audience" to find new people who share similar traits with your best customers.
This level of precision is something traditional advertising simply can't match.
Build Your Brand Awareness and Recognition
Paid ads are a powerful way to introduce your brand to people who don't yet follow you.
By showing your ads consistently to a relevant audience, you can build brand recall and recognition. In my experience, this consistency is key. An ad might not lead to an immediate sale, but the repeated exposure builds trust, so when a potential customer is ready to buy, your brand is the first one they think of.
“Effectively leveraging social media can help businesses build strong brand awareness, engage with customers and drive meaningful results.”
— Strike Social
Measurable Results & Real-Time Optimisation
One of the biggest advantages of paid social is that everything is trackable. You're not left guessing about your return. You can see exactly how many people saw your ad, clicked on it, and ultimately made a purchase.
Here are some of the key metrics you'll be looking at:
| Metric |
What It Means |
Why It Matters |
| CPC (Cost Per Click) |
The average amount you pay each time someone clicks on your ad. |
Helps you understand the cost-effectiveness of your creative and targeting. |
| CTR (Click-Through Rate) |
The percentage of people who clicked on your ad after seeing it. |
A high CTR means your ad is relevant and engaging. |
| CPA (Cost Per Acquisition) |
The total cost to get a single customer or lead. |
This is a crucial metric for measuring the profitability of your campaigns. |
| ROAS (Return on Ad Spend)g |
The total revenue generated for every dollar spent on ads. |
The ultimate measure of whether your campaign is making you money. |
With these numbers at your fingertips, you can make real-time adjustments. If one ad creative is performing poorly, you can turn it off. If a specific audience is converting like crazy, you can shift more budget their way. This ability to optimise on the fly is a game-changer.
When Social Media Advertising Would Work
Paid social is most effective when it acts as an accelerator for a business that already has a solid foundation.
It works best when you can answer "Yes" to these points:
You Have a Clear Offer and Funnel
Before running ads, you need to know exactly what you’re selling and how people will buy it.
• Do you have a well-designed, mobile-friendly website?
• Is your checkout process fast and simple?
• Do you have a clear lead magnet (like an ebook or coupon) to capture interest if they don't buy immediately?
Sending paid traffic to a broken or confusing website is a guaranteed way to waste money.
Your Organic Content Is Already Engaging
If your organic posts (the ones you don't pay for) are already seeing good engagement, it's a strong sign your content is connecting with your audience.
Paid advertising then acts as a turbocharger. It takes proven content and puts it in front of thousands more people like the ones who already like it.
Your Unit Economics Support Customer Acquisition
This is the most critical factor. Before you spend a dollar, you must ensure your business is designed to make a profit from paid advertising.:
1. Strong Margins: Is the profit margin on your product or service strong enough to cover your Cost Per Acquisition (CPA) and still leave you with a profit?
2. High Lifetime Value (LTV): If you break even or lose a little money on the first sale, do your repeat customers (LTV) generate enough revenue over time to cover the initial cost?
If your CPA is consistently higher than the revenue generated by an average customer, your ads will simply drain your budget. Profitability must be factored in first.
When Social Media Ads Don’t Work and What to Watch For
Most articles on this topic focus on the sunny side. But I’ve seen countless businesses lose money because they didn't understand the risks. Paid social isn’t for every business, and it's not without its challenges.
It’s Not a “Set It and Forget It” Solution
One of the most common mistakes I see business owners make is launching an ad campaign and then leaving it to run for months. They check in a few weeks later, see poor results, and decide paid social "doesn't work."
The truth is, effective advertising requires constant monitoring and optimisation. The algorithms are always changing, ad fatigue can set in, and your competitors are always testing new things.
You need to be actively A/B testing different headlines, images, and audiences to ensure your ads stay fresh and effective.
The Problem of Misaligned Expectations
It's easy to get carried away by success stories, but it's vital to set realistic goals.
Many businesses jump in expecting immediate sales and a massive return on their very first campaign. While that can happen, it’s not the norm.
Sometimes the goal of your ad isn't a direct sale, but rather building brand awareness or generating leads for a longer sales cycle. In my experience, a business that's already selling well offline and wants to scale will find more immediate success than a brand-new business trying to build its first audience.
Expert Tip: Avoid the "Boost Post" Trap.
Unless your goal is purely for a bit of brand awareness and a few extra likes, don't just hit the "Boost Post" button.
It's designed to be simple, but it gives you very little control over your audience and objective. For serious results, you need to use the full Ads Manager platform. It might seem daunting at first, but it gives you the control and precision required to actually get a return.
Breaking Down the Investment and Return of Paid Social
When you're asking, "is social media advertising worth it?", you have to look beyond just the raw ad spend. The real cost is a mix of different elements, and understanding them is key to a profitable campaign.
Breaking Down the "Cost"
• Ad Spend: This is the money you pay directly to platforms like Facebook, Instagram, or TikTok to run your ads. This is the obvious cost.
• Creative Costs: Think about what you're actually showing people. This includes design fees for graphics, production costs for video, or the time and resources to shoot high-quality photos.
• Management Fees: Are you running the ads yourself? Then you need to account for your time. If you hire a freelancer or an agency, you'll have their monthly management fees to consider. This is a significant factor, as a good agency can save you money in the long run by optimising your spend and avoiding costly mistakes.
• Testing Budget: To find what works, you have to test. Set aside a small portion of your budget to experiment with different creatives, audiences, and platforms. Think of this as a necessary investment, not a waste.
How to Calculate Return on Ad Spend (ROAS)
While there are many metrics, ROAS is the one that tells you if your advertising is genuinely contributing to your bottom line.
The formula is straightforward:
ROAS=Revenue from Ad Campaign/Cost of Ad Campaign/
Let's use a simple example. Let's say you're a Melbourne-based online boutique selling artisan coffee mugs.
• You spend $1,000 on a month-long Instagram ad campaign.
• The campaign leads to $5,000 in sales.
Your ROAS calculation would be:
ROAS=$5,000/$1,000=5
This means for every dollar you spent, you made five dollars back.
A good benchmark for ROAS is often debated, but anything above a 2 or 3 is generally considered profitable for most businesses. However, this number varies wildly depending on your industry and profit margins.
“Only 15% of marketers actually use social data to measure social media ROI… but there is so much potential for high ROI in social media.”
— Improvado
You can learn more about tracking and improving ROAS in our post on measuring social media advertising success.
Alternatives or Complements to Paid Social
Paid social isn't the only option, and often it works best when paired with other channels.
Organic Content Marketing
This involves creating high-value content (blogs, videos, educational posts) that naturally attracts an audience over time. It’s a slow burn, but it builds trust and authority that paid ads cannot replace. Your organic content also gives you great assets to use in your paid ads.
Google Search Ads (PPC)
Also known as Pay-Per-Click (PPC) or SEM (Search Engine Marketing), this involves showing an ad when someone actively searches for a keyword on Google.
• Social Ads: Interrupt an audience with an ad based on their interests.
• Search Ads: Meet an audience who is already looking for a solution.
If your product or service solves an urgent problem (e.g., "emergency plumber near me"), Google Search Ads is often the better place to start.
Email Marketing
The highest-converting audiences are often your existing email list. You own this data, and it's a direct line to your customer. Use paid social to grow your list, and then use targeted email campaigns to drive sales with a very low cost.
Cost vs Returns: How to Know if Social Media Advertising Is Right for Your Business
Before you spend a single cent, go through these few questions. It's the same one I'd use with a new client to determine their readiness.
Question 1: Do you have a clear objective?
What are you actually trying to achieve? Your goal will define everything from your ad copy to the metrics you track.
• Brand Awareness: You want to get your name in front of as many people as possible.
• Lead Generation: You want to collect contact details (e.g., email sign-ups).
• Direct Sales: You want people to buy your product directly from your website.
A common mistake is trying to do all three at once. Start with one, nail it, and then expand.
Question 2: Do you know your target audience?
You need to go beyond "women, 25-45."
Do you know their interests? Their pain points? What other brands do they follow? A well-defined target audience is the foundation of any successful social media campaign.
Question 3: Do you have the resources (time, budget, creative)?
This is the big one. If you're a sole trader with zero design skills, no spare time, and a budget of $50, paid social will be an uphill battle.
It’s better to invest that money elsewhere. If you have a clear strategy, some great photos, a decent website, and a realistic budget, you're in a much better position to succeed.
Is Paid Social Worth It? Here’s the Final Verdict
So, is social media advertising worth it?
For a business ready to invest strategically, the answer is an emphatic yes. The ability to find your perfect customer with surgical precision and measure your return with confidence makes it one of the most powerful marketing tools available today.
But remember, it’s not a get-rich-quick scheme. It’s a powerful lever that requires a strategic approach, a clear understanding of costs, and the right expectations.
Start small, test what works, and scale your efforts based on the data. It's a marathon, not a sprint.
Ready to see if paid social is the right fit for your business? Contact the experts at Born Social for a free consultation.
FAQs
How much should I spend on social media ads?
A typical test budget starts around $500 - $1,000 USD or $750 - $1,500 AUD per month, depending on your market and goals. This allows for meaningful data across campaigns, ad sets, and creative variations. You’ll want enough spend to exit the “learning phase” on platforms like Meta Ads Manager.
What’s a good ROAS?
It depends on your industry, but a common benchmark is 3:1 (make $3 for every $1 spent). High-margin businesses or ecommerce brands may aim for 5:1 or more.
Is Facebook or Instagram better for ads?
It depends on your target audience and content style. Facebook typically works well for broader reach and community-driven brands. Instagram excels with visual products and younger demographics. For more, see our post on choosing the right platform for social media advertising.
Can I run ads without hiring an agency?
Yes, but keep in mind that a poorly set up campaign can waste budget quickly. Many businesses benefit from working with a social media ads agency to get the best results.