The internet has transformed the advertising industry. Traditionally hard-to-measure channels like TV, billboards, and sponsorships are being pushed to the wayside by cheap, trackable online advertising channels like social media ads, display, and paid search ads.
This shift is democratizing the industry. Even the smallest brands can compete on the same platform as multinationals if they have the right knowledge, ad creatives, and targeting. If you want to grow your business, online advertising should be the first place you start.
I’ll show you how you can do just that in this guide. You’ll learn why online advertising is so beneficial, the best online advertising channels to use and how to create an online advertising campaign from scratch.
What Is Online Advertising?
Online advertising is a hugely popular strategy, with almost two of every three small businesses using it to win new customers. Spending won’t decrease any time soon, either. Global online advertising spend is predicted to hit $646 billion by 2024, up from $378.16 billion in 2020.
Online advertising is a form of paid-for marketing that leverages internet-based channels to promote products and services. There are plenty of online advertising channels to choose from, including search engines like Google or Bing, social media platforms, and display ads, banner ads, and native ads.
Unlike traditional advertising mediums, the cost of online advertising is low. Small businesses can generate hundreds of new customers for just a couple hundred bucks a month. Online advertising is more measurable, too. Every channel can be tracked, measured, and optimized, so marketers squeeze as much ROI from their campaigns as possible.Such are the benefits of online advertising, companies are increasingly dedicating more and more of their budget to digital channels.
As you can see in this infographic from Visual Capitalist, there have been sharp falls in newspaper and TV advertising spending, while search, social media, online video, and e-commerce spending has increased dramatically since the early 2000s.
Why Your Business Should Advertise Online
However big your business, online advertising is one of the best ways to build a brand, win new customers, and grow revenue. It has many advantages over traditional forms of advertising and other forms of online marketing, but there are four big benefits I want to highlight.
Immediate Results
When you advertise online, you don’t have to wait months, weeks, or even days to get rewarded for your efforts. Sales can happen as soon as your ads go live.
This is unlike virtually any other form of marketing—traditional or otherwise. With SEO, for instance, it takes an average of about three months for a page to rank well on Google. Social media accounts tend to grow between 9.4 percent and 16 percent every six months.
The speed at which you see results doesn’t just help you win customers and drive revenue faster, it also helps you optimize campaigns quicker. Because you get data so fast, however, you’re able to optimize your campaigns to maximize ROI much faster. What takes six months or more with SEO, takes just three months with paid ads.
This is vital because optimizing PPC campaigns can double your ROI or more. Easton Sports, for example, doubled its ROI from 400 percent to 900 percent by working with e-commerce marketing agency The Good.
Better Targeting
Forget broad, mass-market ads that aim to please everyone. Online advertising lets you drill down into your target market and know with confidence that every dollar of your budget is being spent on them. That’s the kind of targeting traditional advertising can never compete with.
Most online advertising channels offer granular targeting, allowing you to focus your efforts on a small segment of their audience. Facebook lets you customize your target audience by dozens of criteria, including:
location
age
gender
education
job
interests
behavior
connections
As a result, you don’t have to worry about wasting your advertising budget on people who aren’t interested in your product. If you have strong buyer personas, you can target them with ease. Even if you don’t have buyer personas, granular targeting makes it easy to identify profitable segments of a large audience.
Better still, online advertising allows you to reach millions of people every day. Facebook has almost three billion monthly active users. Google processes around 63,000 queries every second. No other advertising medium lets your average joe business reach audiences of this size.
Low Costs
You won’t be forking over millions in advertising fees to reach targeted audiences. Unlike traditional advertising—where it can cost over $100,000 to run a 30-second TV advert—the cost of online advertising is incredibly low.
It costs, on average, just $3 to $10 to reach 1000 people with online advertising, compared to $22 to reach 1000 people using traditional methods. While your mom and pop retailer can’t hope to afford a TV advert, they can run a successful online advertising campaign on Facebook, Google, or any other channel.
You can limit the cost of your online advertising, too. The vast majority of online ad platforms will let you set a limit on your total and budgets, so you don’t blow everything at once.
Loads of Data
The worst thing about traditional forms of advertising like print, TV, or radio is that it’s tough to work out how well your campaign performed. That’s not the case with online advertising, where most channels show you exactly how well your ads performed.
Typically, online advertising channels will show how many people saw and clicked your ad, how many sales your ad resulted in, and many, many more metrics.
This data is gold. First, it allows you to measure ROI to see whether your online advertising is delivering a return.
Second, you can use that data to optimize your campaigns and make them even more profitable. With it, you can understand why your ad performed well or poorly and what you can change to improve your ROI in the future.
Types of Online Advertising for Businesses
Below are the main types of online advertising you need to know
1. Paid Search
Paid search is one of the most important online advertising channels. The vast majority of all online interactions start with a search engine—which makes it one of the best places to target potential customers.
Google is the dominant force in paid search advertising, which is unsurprising given it currently enjoys an 85 percent global market share. Other search engines like Bing and DuckDuckGo also offer paid ad solutions.
Paid ads come in two models: pay per click and CPM. With pay per click, brands pay every time someone clicks on their ads. With CPM, brands pay a set cost per thousand views.
They are usually positioned at the top of search result pages, as you can see below. They may also feature at the bottom of result pages and in separate tabs, like the Shopping tab.
Paid search offers some of the best targeting available to online advertisers. Brands can target specific keywords, destinations, devices, and more. This allows them to create highly relevant ads that can return an average ROAS of 200 percent.
That comes at a cost, however. Paid search ads are some of the most expensive you can buy. The average CPC of Google Ads is between $1 and $2. Averages can rise much higher in some industries like law—where the average CPC is more than $6.2. Social Media Advertising
Social media advertising is huge. It is the second biggest digital advertising market with revenues of $153.7 billion in 2021. That’s expected to grow to $252.6 billion in 2026.
Consumers are obsessed with social media, too. Over half of the world’s population use some form of social media and the average person uses it for 2 hours and 27 minutes every day.