You may or may not be familiar with the term or concept of online advertising, sometimes called Search Engine Marketing (SEM). Other terms in use are paid channel marketing or pay-per-click (PPC) marketing. All these terms are used to describe the same concept – the practice of purchasing or “renting” internet traffic through the use of online advertisements.
According to a Brightroll survey, 72% of consumers give more preference to online video ads over TV ads. In fact, online ads are more effective than any other medium. Moreover, online advertisement is also very popular because it’s easily measurable and highly targetable to specific audiences. Keep in mind, however, that it is rented advertisement. Once the money for ads is gone, the traffic stops.
Paid Channel Pricing Models
Cost Per Mile (CPM)
CPMs are billed at a flat rate per 1,000 “impressions” (a ‘mile’). An impression is the number of times an ad is displayed or has left an impression on a user. The ad doesn’t have to be clicked; views count as impressions. There is no additional charge for any clicks the ad receives. CPMs are normally visual display ads, but not always.
- CPM rates are generally not expensive.
- Budgeting is simple, since you pay only for a certain amount of impressions. This gives you more control over spending.
- CPMs guarantee your ad will be displayed the number of times you choose.
- Without clicks and conversions, you risk overspending.
- The return of your traffic is difficult to measure until the end of the advertising campaign.
- A rush of web traffic is a very uncommon result.
Pay Per Click (PPC)
PPC (or CPC, ‘cost per click’) are ads that are paid for only when a user clicks on them. Thousands of internet users may view your ads, but you pay nothing unless the ad receives a click to deliver the user to your site or landing page. These are normally text ads, but they can also include a small image. The price per click is determined by the market value of the keyword or expression that interests you. This is calculated by your advertisement’s quality score and the internet competition for the keyword you wish to target.
- PPCs are simple to track. Users click or don’t click your ad.
- You only pay for the clicks you need.
- The risk for overspending on ads that aren’t converting is less, because you only pay for traffic that’s actually directed to your site.
- To prevent overspending, you can place budget caps on traffic coming in.
- PPCs and budgets can be modified in real time.
- Well-optimized PPC campaigns can bring in significant traffic.
- Due to competition, PPCs can become expensive and even unaffordable.
- Without a competitive PPC, it’s possible to not get any traffic.
- ROI can be difficult to calculate because clicks don’t always translate into sales. 50% of clicks on static mobile banner ads are accidental.
- It’s easy to lose money at the beginning, before optimization reaches its peak.
Types of Ads
Static Display Ads
These are ads on a web page that do not change. They generally consist of a single frame with a simple catchphrase. According to a Webtrends study, static ads work better than animated ads in almost every campaign. Static display ads are not limited to banner ads. They can also include website pages, emails, eBooks, and landing pages.
Interactive ads can be in the form of customer reviews, social media updates and shares, mobile apps, and blog comments. Interactive ads increase brand loyalty and reputation by encouraging two-way communication. While they are easy to set up, channels must be monitored at all times to keep consumers engaged. You have to provide fresh and relevant content to keep your customers engaged.
Flash or animated GIF ads require more time to create but are worth the investment. Animated ads give consumers up to 30 seconds to see and understand your advertising message. Multiple messages can be included to help consumers make a decision, giving much more freedom than a limited static ad.
These are similar to static ads, and are normally displayed across the top of a user’s browser window. Their advantage lies in being placed at the top of a page, where users view them immediately. A large, bold message catches the eye and delivers a message before the user becomes distracted by the information contained in the web page.
How to Choose the Right Ad Network
Choosing the right ad network is not a trivial undertaking. What works for one business may not work for another. When determining which ad network will work for your particular industry and business, ask the following questions:
- What Are The Available Targeting Options You Need? Clarify the targeting options that matter most to your business. Is interest-based targeting or demographic targeting most important? Do you need both? Will the ad network you are examining reach your target audience when and where you need them to? Are you marketing toward consumers or B2B? Can they do what you need well?
- Does The Ad Network Align Well With User Experience? How do you want to be introduced to your target audience? For example:
- Google AdWords and Bing are more targeted, reaching consumers based on keywords they research online.
- Facebook ads drive awareness about new businesses, products, or services.
- LinkedIn ads target professionals by interest or job title as they browse feeds, groups, or job listings.
- Is The Ad Format Appealing To You? Do you think the ad formats are likely to inspire user engagement? Unattractive ads equal a negative user experience. Choose ad products and features that create the best user experience possible.
Online advertising can reap generous benefits when used effectively, and bring impressive returns for your investment. Although a bit of trial and error is involved, after time, you will learn what types, frequencies, and messages work best for your particular industry niche. We’d love to hear about your experiences using online advertising. Share your questions or tips in the comments below.