Recently, some social media sites – most notably Facebook – have been pushing businesses to do more advertising to go along with their organic brand content (Facebook pages, Twitter posts, blogs, etc.). Some SMBs have railed against this trend, even threatening to withdraw from social media, but doing so would amount to shooting themselves in the foot, contends Randy Parker, founder and CEO of PagePart.com, which provides tools to help small businesses master the use of advertising on social media. “Social media advertising is not only viable, it’s practically mandatory and quite powerful. Facebook – by necessity, not greed – is having to limit the number of posts that appear on anyone’s feed, so SMBs need to be prepared to spend money. Otherwise you cannot be sure that your fans and followers are seeing your message,” he says.

Recent research suggests that paid ads on social networks achieve higher conversion rates than organic content. Citing a study by Convertro and AOL Platforms, eMarketer reports that paid ads on Twitter had more than twice the conversion rate of organic brand content (3.9 percent vs. 1.5 percent) in Q1 2014. The differential was much smaller on Facebook, but paid ads still outperformed organic, and they provided an average 25 percent lift in conversions across all social media platforms. “Rather than lament that what was free now has a cost, the savvy business owner will see social media ads as an opportunity to shift marketing dollars from un-targetable and inflexible media such as print, local newspapers, flyers, etc.,” says Parker, who is also the founder of electronic marketing firm Constant Contact.

What makes social media ads so effective is the high degree of targeting capability they offer. “The targeting options on Facebook allow SMBs to specifically target to existing customers and visitors, which is extremely powerful for SMBs, as they typically have closer proximity with customers, both relationship-wise and geographically, that can be harvested easily,” says Ulrik Bo Larsen, CEO of Falcon Social, a social media management platform. The trick, he adds, is to figure out what works for your specific business. “An auto dealer will not necessarily be successful with the same social communications mix as a local restaurant chain.”

There are primarily two reasons that a specific ad shows up on an individual’s feed in social media, explains Matt Lee, director of marketing at inbound marketing agency Adhere Creative. First, Facebook and other social media platforms allow advertisers to home in on a chosen demographic through a combination of big data analysis and the target’s social media profile. The second is something called remarketing, and if you’ve ever noticed a specific product from Amazon following you around on the Internet, that’s what’s behind it. “Using a small snippet of code, an advertiser can drop a cookie on your computer, allowing them to show a display ad on social networks dependent upon the activity you took while on their company website,” he says.

Figuring out which social media channels are likely to be best for your ads can be tricky. Lee suggests that if you are already engaged in social media, then start with the channel that has provided the best user engagement so far. “Most likely, this is where your target audience will continue to engage and respond to advertising efforts.” There are ways to compare ROI among different channels using Google Analytics, Larsen notes. “First of all, you need to figure out what your desired goal is. If it’s a website conversion, Google Analytics is your friend. If you’re looking to build your audience and/or engagement, you have to look at the social media analytics natively or through a social media management tool where it’s easier to compare.” In the latter case, it’s also beneficial to benchmark against competitors or similar businesses of the same size and analyze why they are doing better or worse than your business, he adds.