Ever since the internet was introduced to the consumer, we have been shown ads and advertisements all over the web. It has become a part of the internet and although some people may hate ads, it is what keeps online businesses running.
Online advertising has enabled millions of companies to grow from small businesses to large businesses with better ROI’s and customer engagement. In the past, we relied on Television and newspapers to promote our business or service but we are now finding that traditional ads provide a far lower ROI (and are way more expensive) than online advertising.
In this guide, we are going to get really in-depth with online advertising, why you should be using it, what the benefits are, popular advertising networks, online advertising pricing and the different types of online advertising.
What is Online Advertising?
Online advertising is a form of marketing that uses the internet to show promotional materials or messages to consumers surfing the web. There are a number of advertising methods online like display advertising, social media advertising, and Search Engine Optimization.
Online advertising is now the biggest source of advertising, surpassing television way back in 2011.
Marketer.com concluded that the United States’ online ad revenue share will hit almost $83 billion in 2017. This huge shift from traditional to online advertising is due to the much cheaper costs, higher ROIs, and better scale-ability.
There are many different types of Online Advertising as I mentioned before. We are going to talk about some of the popular types of online advertising:
Types of Online Advertising
Display advertising is the most widely used type of online advertising. It is advertising on a web page using a number of formats including flash, text, images, video, and even audio. Display advertising is one of the older types of advertising and has been around since there have been web pages to put banners on.
Interstitials are just web pages that are displayed before the page you were originally going to. Many users do not like interstitial ads but they provide high CPM to publishers and good conversions to advertisers. A good example of interstitial ads is Forbes.com. If you notice when you go to one of their results in Google, you are forced to wait a few seconds and they display an ad. Sometimes you can even click Continue to Site (its usually awfully close to the ad) to skip the page.
It is also now known that Google does not like websites that use interstitial ads so this type of advertising is not used as much anymore. Although you will get higher CPM (revenue per thousand page views), you are really sacrificing the user experience of your website.
Search Engine Marketing/Optimization
Search Engine Optimization is a popular online advertising method that takes more time than normal online advertising but its a great investment and can take any business to the next level with a #1 spot in Google. SEO and SEM is the method of gaining more traffic from organic search engines like Google, Bing, and Yahoo.
There are a ton of ways to increase your website’s SEO and its wise to hire a professional to manage your SEO because you can throw a lot of money at buying Fiverr jobs or cheap links but that doesn’t work anymore. These days, SEO is all about having good code, smart keyword research, great content, and patience.
Content marketing is a part of SEO but it’s so important it can be called its own online advertising method. It is the method of creating amazing content that attracts readers, backlinks and social shares. Combined, these will take your content to the first page (and maybe the first spot) of Google, where you can get a constant, steady flow of targeted traffic to your website.
This method is not fast… or easy. Creating the best content online is not a simple feat due to a large number of people creating similar content. To rank your content in the #1 spot, it will have to be the best article out there on the subject, while including all sorts of media like videos, text, audio, and infographics.
The last type of advertising is email advertising. It is another very old method of online advertising that has been happening since the first mass email was sent in 1978.
It is still around because it’s a very effective form of advertising online. It still holds the biggest conversion and click-through rates among other types of advertising.
A graph from Pinpointe shows how good email marketing can be:
So how do you get emails to advertise to? Well, that’s the tricky part. You can collect emails on your website, Facebook, from current customers, and a number of other methods.
Now you know all the different types of online advertising. But now you may be asking, is online advertising really worth it?
What are the Benefits of Online Advertising?
As I mentioned before, online advertising is inherently much cheaper than traditional advertising. With the growth of the internet, you can now reach a lot more people for a lot less money. Here is a great graph by Life Marketing that shows the CPM (cost per thousand) of some various media channels.
As you can see, Mail, TV, and Magazine are 10x-20x more expensive per thousand views than social media advertising. Not to mention the other numerous benefits of online advertising:
Connect with Your Customers
With online advertising and digital marketing, you can now connect directly with our customers and gain valuable insight into where they came from and why. As opposed to a television ad where you only know how many people saw it… not who, when, where, what device and a number of other kinda freaky things they know.
Measure Accurate ROI
Online advertising also gives you the ability to directly see your spend vs sales with online advertising. You can set up conversion codes to track every sale, so your advertising network stats can show you how much you spent and how much you made.
Here is an example of some of our Google Adwords campaigns. You can see that we pay about $1.99 per conversion… which is pretty good! We can track everything from demographics to geographics, for each conversion. This helps you find your target customer and scale your business quickly.
This makes tracking and scaling your company so much easier than traditional marketing and advertising. This allows you to put money where it matters and stop wasting money on areas that don’t.
Popular Online Advertising Networks
There are hundreds of online advertising networks that allow you to advertise on their platform but here are some of the more popular advertising networks in 2017:
Adwords is Google’s flagship advertising network and platform. You can deploy display ads, YouTube video ads, text ads, mobile ads, and search ads. This means that you can pretty much reach anybody on the internet.
Google Adwords Search Ads will display above (sometimes) and to the right of the SERPs (search engine result pages). It will have the little ad indicator so you know that’s its an ad. Here is an example:
Adwords works on an auction-type of a system where you bid your maximum cost per click (CPC) and that determines your placement in the SERPs along with some other factors. To be number 1, you will have to bid the highest and have a great ad. WordStream created a simple infographic that explains how Adwords bidding works:
As you can see from the infographic, it’s not all about having the highest bid. If you can get a higher CTR (click-through-rate), then you can get more clicks for cheaper. But if not many people search for your service or product, then you may be better off using an online advertising platform like Facebook Ads.
Facebook is one of the largest websites in the World. This is why its no surprise that Facebook is one of the fastest-growing Ad platforms. Like Adwords, it allows you to track conversions and see tons of great data about your visitors and customers.
Facebook Ads also uses a similar auction-style bidding system for their ads but you target your ad’s audience on a large number of criteria like income, gender, likes, interest and a ton of other very personal information that Facebook has about its users. But this is what makes it such a great place to advertise!
You can find your exact target demographic and show ads to just them. When you can find a narrow niche and get a high CTR, you can see some really low CPC (cost per click) prices. We have seen as low as $0.01-$0.02 cost per click.. which is insane!
Now, Facebook Ads are pretty competitive so it’s not likely you see those numbers anymore but you can get some great results with Facebook Advertising.
Bing Ads is Google Adwords counter-part and they are actually pretty much exactly the same. Bing even allows you to easily import your Adwords campaigns into Bing Ads.
This makes switching over to Bing Ads a lot easier but its still just Bing. The traffic you can get from Bing is more limited than Google so that raises the CPC prices so you are usually going to pay more with Bing Ads.
If you are in a non-competitive niche or market then you may have luck with Bing Ads.
Like Facebook, Twitter has an advertising platform to generate revenue for the company. Twitter ads use interest targeting, follower targeting, age, demographics and gender to target your ads to specific users.
Unlike Facebook, your ads must be in the form of a Tweet which makes getting high CTRs a little difficult. We haven’t had a ton of luck with Twitter Ads but its defiantly worth trying for your business.
With Twitter Ads, we saw a $10.00 Cost per Conversion compared to Facebook Ads, where we see a $0.70 Cost per Conversion.
If the majority if your target demographic is on Twitter or follows a specific Twitter account, then you may be able to see some good ROI with Twitter Ads by targeting those accounts or demographics.
LinkedIn is the Facebook of the professional world… and like Facebook, they have their own advertising platform as well. LinkedIn Ads is a great way to connect with potential companies, people or businesses in your niche/market.
LinkedIn Ads has 3 different options to choose from to fit your goals:
How Much Does Online Advertising Cost?
So you’re probably wondering how much advertising costs. Well, its hard to say exactly how much it costs but you could say it can be anywhere in between $.01 and infinity.
Some large companies in competitive niches pay up to $50+ per click for certain keywords but they are making thousands per sale, so it pays for itself.
Its better to look at each type of compensation method to truly figure out how much advertising may cost for you.
- CPM (Cost per Thousand Views): This means the cost to you per thousand views of your ad.
- CPC (Cost per Click): The average cost per click on your ad.
- CPE (Cost per Engagement): In Facebook Ads, engagement can be a like, comment or share.
- CPV (Cost per View): The cost to you per view of your ad or video.
- CPI (Cost per Install): Cost per install of your app (for mobile applications).
Advertising Cost By Ad Network
|Ad Network||Average CPC|
As you can see, a lot goes into online advertising. There are tons of places to advertise and a whole lot of different ways to do it. I personally always go to the most popular network. Where most people are is where the most supply is and right now, Facebook is dominating the online advertising space.
Let me know in the comments what your favorite online advertising platform is!