The internet has created new worlds for marketers. Ads have always been the primary tool for direct marketing, but online, they’ve taken on a new life. When everything is interactive, an ad is more than just a reminder that a brand exists: It’s a chance to bring customers directly to your business.
Of course, that’s only true if you understand how to make the most of digital advertising. Here’s what you need to know about online ads to get more out of your advertising efforts.
What Is Digital Advertising?
First, it’s important to understand what digital advertising is not. Many people use the terms “digital advertising” and “digital marketing” interchangeably, but that’s not accurate. Digital marketing covers every type of online marketing, from public relations to content marketing to influencers. Digital advertising is a specific subset of your online marketing activities.
At its core, digital advertising is the act of paying someone to have your ads displayed online. However, it can be much more than that. Your ads can do anything you need them to, from increasing awareness of your brand to directly driving sales. If you take the time, you can turn digital advertising into a high-level strategy to promote your product or service online.
Five Major Benefits of Using Digital Advertising
There’s a reason that digital advertising is so helpful. In fact, there are five. These five significant benefits are unique to digital advertising — here’s why.
Cost-Efficient: Digital ads don’t require you to pay massive amounts upfront. Instead, you can set a budget, so your messages only run until you meet that threshold. Furthermore, you’re only charged for your digital promotions when someone takes the action you want. You can start your online campaigns with a shoestring budget and upgrade whenever you want.
Targeted: You can aim online ads at any demographics you want. There’s no need to get your message in front of thousands just to get the attention of a few interested people. Instead, you can choose exactly which people you want to see your ads, so you have the best chance of converting clicks into purchases.
Measurable: When every impression and click is tracked, you can get high-quality information about your campaigns. You’re able to track how effective a campaign is, how your campaigns compare to each other, and turn this information into actionable data to improve your marketing work.
Flexible: There’s no marketing method that’s as flexible as digital advertising. You can start and stop campaigns whenever you want, without penalties. You can also change your campaigns midstream to make them more effective. That means that you’re never wasting time and effort on messages that aren’t working.
Effective: When it comes to your return on investment (ROI), there’s nothing better than digital advertising. You can get immediate, noticeable results with online campaigns. Unlike other types of marketing, you can see an ROI as high as 200% with the right ad. That’s on top of less-tangible benefits like improved brand recognition and goodwill.
11 Impressive Digital Advertising Statistics
Digital advertising is much more than just a new way to reach customers. It’s one of the most effective marketing methods on the planet. That’s not an exaggeration. Statistics show that online advertising is revolutionizing marketing.
Here are 11 statistics that show exactly how important digital advertising can be to your business.
- The number of people using ad blockers in 2020 fell 20% from 2016.
- Total paid search revenues increased 12.9% in 2019. This revenue increase came entirely from mobile users.
- By the end of 2021, global revenue from offline commerce channels is projected to drop by 20%.
- Consumers spend 10 percent more in a store if they have clicked on the retailer’s Google search ad before visiting.
- 75% of people say paid ads make it easier to get the information they need.
- 70% of mobile customers call a business through mobile ad links.
- A third of consumers click on ads because they directly answer their questions.
- The average ROI for Google Ads is 200%.
- On average, Google Ads increase brand awareness by up to 80%
- 65% of customers click on PPC ads that meet buyer’s intent instead of organic search traffic.
- Customers are 70% more likely to purchase a product from companies that use retargeting in their digital advertising.
Whether you run an ecommerce site or a brick-and-mortar store, the right digital advertising campaign can make all the difference.
The Three Major Types of Digital Advertising
There are three main types of digital advertising: ads that show up on social media feeds, ads that appear in search engine results, and ads that appear on traditional websites. Each of these ads has unique strengths. Here’s what you need to know about each type.
Pay-Per-Click Advertising (PPC)
When you think about online advertising, you probably picture the ads at the top and sides of a webpage. These are known as “pay-per-click” ads, since you only pay for the ad when someone clicks on it. Sometimes they’re also known as “display” ads, as they’re displayed on many websites.
Pay-per-click ads are flexible. They can be put on any website on the internet, and they can include still images, videos, text, or all three. Many PPC campaigns include multiple promotions intended to be displayed at different sizes and locations. The cost per click usually depends on the size, style, and location of the ad.
These ads are run on advertising networks that show them to your target demographics. Since you’re paying by the click, the networks are incentivized to target your ads correctly and get your brand exposure. It’s an excellent tool to build brand awareness and drive first-time or repeat sales.
Search Engine Marketing (SEM)
A more specific type of PPC advertising is known as paid search engine marketing. Search engines like Google allow you to buy ads that appear at the top of the search results for specific keywords. These messages look like organic search engine results, except for a small disclaimer that says “Ad” or “Sponsored.”
SEM ads are one of the most effective ways to direct customer searches to your website. You can pay based on the number of clicks, calls, or other trackable actions your ad generates. It’s important to note that SEM ads targeting more common terms are usually more expensive than ads for specific, targeted keywords.
Social Media Advertising
Many social media platforms don’t have traditional ads. Instead, they have sponsored posts. These ads look like a normal post on the platform. Facebook ads look like Facebook posts, and Twitter ads look like tweets, with a “Sponsored” disclaimer underneath. The social media site inserts your promotion into the timelines of users in your target demographic.
Because of that, some social media sites charge based on the number of people who view the ad, rather than charging per interaction. In general, social media ads benefit from videos or compelling images, so that users actually notice the ad instead of scrolling past. Social media advertising is an excellent way to build brand recognition.
Does Digital Advertising Work?
The short answer is: yesonline advertising works. Google Ads offers an ROI of 200%, ten times more effective than physical alternatives like direct mail. That makes online advertising one of the best available tools for marketers.
The slightly longer answer? Digital ads work, but you need to understand how to use them. Anyone can purchase online ads, after all. For the promotions to live up to their full potential, they need to be well-written and data-driven. Otherwise, your ads won’t be seen by your target audience, and they won’t generate the response you want.
Digital vs. Traditional Advertising
Both traditional and digital advertising have their benefits and drawbacks. As you plan your media-buying strategy, understanding them will help you choose the best way to prioritize your advertising budget.
Traditional advertising is entirely non-interactive — think billboards, magazine ads, and radio and television advertisements. They may be compelling, cinematic, and highly-produced. But no matter how good they are, the viewer can’t directly visit the business from the ad.
Because they have to go through numerous approval processes, traditional ads take weeks or months to be seen. They’re also hard to change. If an ad goes out and current events make it irrelevant or inappropriate, there’s very little your brand can do. They can also be more expensive to purchase, because you’re buying a physical space or time slot.
- Some consumers trust traditional marketing over newer methods
- Broad reach
- Limited ability to target your audience
- Can’t directly drive sales
- Hard to change mid-process
In comparison, online ads are interactive. They can appear anywhere online. A good online ad can teach people, encourage purchases, or get people to reach out. What sets these ads apart is simple: the customer can click on the ad to go to your website.
Online ads are also impressively flexible. You can produce and start a digital advertising campaign in hours instead of weeks, or halt your ad buys if they’re not getting the reception your business needs. Finally, you have much better control over your ad spending, since you pay based on views or clicks.
- Drives sales
- Easy to target your audience
- No wasted marketing funds
- Adblockers can reduce your reach
- Some customers don’t trust online promotions
At the end of the day, online ads win out. Since you pay for the impressions you get, adblockers don’t affect your costs. Digital promotions are cheaper, easier, and more effective than traditional ones.
How Much Does Digital Advertising Cost?
One of the great things about digital advertising is the price flexibility. Every ad platform has its own pricing tiers, but you can always set your own budget. No matter what you’re willing to spend, there’s a plan out there that works for you.
Facebook, Amazon, and Google, three of the largest online advertising platforms, allow you to set your maximum ad budget and stop running ads once you’ve met that number. You never have to worry about going over-budget.
The exact amount you spend per ad will vary. Each site and PPC ad network sets their prices differently. The average cost-per-click (CPC) prices for the most common platforms are:
- Facebook: CPC of $1.72 on average
- Google Display: CPC of $0.58 for banner ads on websites
- Google Ads: CPC of $2.32 on average for ads in paid search engine results
- Amazon: CPC of $0.71 on average
These prices are just averages, of course. These platforms have real-time equations (known as ad auctions) that determine how valuable a particular click may be, depending on the keywords you’re targeting, the time of day, and many other elements that they keep secret. As a rule-of-thumb, targeting less-common keywords will reduce your CPC, while using commonly-used keywords will cost you more.
The Science and Strategy Behind Digital Advertising
Technology hasn’t just made online marketing easier than traditional methods. It’s also made it better. Digital advertising allows you to collect all the data you could ever want about your campaigns. For the first time, the smallest mom-and-pop businesses have access to the same metrics that billion-dollar corporations use.
There are two ways you can benefit from this. First, when you can track the behavior of every customer who’s ever clicked on one of your ads, you can learn from them. You get direct info about which ad placements lead to the most clicks and conversions. You can also test different ads against each other — known as A/B testing — to see what phrase or image gets the best results. Access to this data allows you to easily test new approaches and perfect your existing copy.
Second, you can narrow down your target audiences like never before. Analytic tracking through Google and Facebook makes it easy to develop precision campaigns that micro-target individual demographics. You can run different campaigns to target young stay-at-home dads and mid-fifties women in leadership roles without your ads overlapping. You have complete control, all thanks to the strategic knowledge offered by digital advertising.
What Metrics Are Important to Digital Advertising?
If you want to make the most of your online efforts, you need to be tracking the right numbers. These six metrics are the most important numbers to know for your digital marketing campaigns.
- Click-through rates (CTR): A click-through occurs when anyone clicks on your ad to visit your site. Your click-through rate is the number of people who click on an ad, divided by the number of people who saw it. A high CTR says that you’re targeting your ads well, and people find them interesting.
- Lead conversion rates: People who click on your ads are considered leads. After someone has clicked through to your site, you want them to take another action, like signing up for a newsletter or making a purchase. When that action occurs, that’s a conversion. The lead conversion rate is the number of leads who took your preferred actions. High lead conversion rates mean everything is working well. On the other hand, low conversion rates mean that your ads are mistargeted, or that you need to optimize your landing page.
- Cost per click (CPC): This is the price you pay every time someone clicks one of your ads.
- Total ad spend: It may seem self-evident — this is the total amount spent on ads in a campaign. Depending on your marketing strategy, your costs will fluctuate, but you can set spending limits on most platforms to ensure that you never go over budget.
- ROI: ROI is short for “return on investment.” In advertising, ROI is calculated by tallying your total revenue earned from the ad placements and dividing that sum by your total ad spend. Low CPC rates will increase your ROI, as will higher lead conversion rates. A low ROI means you should retool or rethink your advertisements.
- Sources: Track which sites are giving you the most clicks, and use that data to shape your marketing strategy. For example, suppose your ads on one social media platform gets plenty of clicks, but few convert. You may want to think about optimizing your landing page, or moving ad buys off that platform and onto one that gets you a higher conversion rate.
Digital Advertising Best Practices
When you’re doing any online marketing, you need to adjust to the unique requirements of a digital environment. Digital ads are no different. Here are six best practices to make your campaigns the driving force behind your business’s success.
Know Your Audience
Every marketer knows that you need to speak to your target audience in your campaigns. Online, that’s more important than ever. You have the ability to target your ads so precisely online that your target audience can, and should, be narrow.
Don’t just aim your ads at “young women.” Target “dog-owning women between the ages of 21 and 25 who went to college.” The more precise you are, the more conversions your ads will lead to.
You can start an ad campaign at a moment’s notice. Use that to keep your marketing efforts relevant to current events. Plan out your campaigns in advance, but don’t be afraid to do additional ads that follow trends and national news.
Similarly, embrace your opportunity to target specific locations and make your ads relevant to them. If you’re a local business, running engaging promotions about events in your town will make you stand out from the generic, nationwide alternatives. If you’re a larger business with multiple locations, pay attention to what’s happening in each locale.
Have a Clear Message
When you run an ad, you need a clear idea of two things: what you want the reader to learn and the action you want them to take.
Unless you’re just trying to build brand awareness, your ad needs to be more than just a picture of a product or your logo. You might tell people about a sale, a warranty, free shipping, a new product, or an event. Condense that message down to ten or fewer words, then add a call to action.
Focus on Omnichannel Communication
There are so many online marketing channels that it can be hard to choose just one. So don’t! Omnichannel communication is a strategy in which you use all the media you have available to you in coordination with each other.
Your digital ads shouldn’t be separate from your website, social media, or content marketing efforts. Everything your customers see should reinforce your brand message. Let your online advertising be one part of a larger marketing effort, and you’ll see impressive results.
Remarketing, or retargeting, is a specific type of digital advertising that focuses on bringing previous customers back. Many digital marketing platforms allow you to target ads specifically at people who have visited your website before.
By retargeting people, you’re reaching out to an audience that already knows you and may have a positive association with your brand. It allows you to remind them why they visited your site already, instead of trying to win them over from nothing.
Track Your Performance
Last, always pay attention to how well your marketing is working. Compare old campaigns against new ones to learn what people like. Try A/B testing different ads to see what’s most effective. Make the most of all the data analytics tools the internet has made available.
Make Your Ads the Best They Can Be
Digital advertising is the future. You can target whoever you want, whenever you want, within your budget. Using the right sites and strategies, you can use online ads to grow your business without breaking the bank.
Digital ads take time to master. You’ll need to spend time narrowing your target audience and learning about industry best practices. If you want to work with the experts, reach out to Redstitch today to get your digital ad campaign off the ground.