Your Quick Guide to Paid Digital Advertising
*This post was originally published on August 07, 2017 and has been updated to reflect the changing landscape of paid advertising.
There’s a saying in digital marketing: “The best place to hide a dead body is on the second page of a Google search.” There’s some truth to that.
According to Search Engine Journal, results on page 2 of a Google search have less than a 1% click-through rate (CTR). It’s crucial to have a paid digital advertising strategy – one that will keep you in front of your customers (and keep your customers away from the dead bodies).
Source: SISTRIX’S 2020 STUDY of over 80 million keywords and billions of search results analyzing different Click-through Rates (CTR)
A paid digital advertising strategy isn’t just for getting your ads on the front pages of search engines. You can now advertise on social media and across many websites, platforms and mediums (even Podcasts).
If you’re looking to grow and implement an effective digital marketing strategy, adding paid digital advertising into the mix can move the needle.
Read on to learn why you should consider a paid advertising strategy for your business & what your modern options are.
Table of Contents:
How does paid digital advertising work?
Paid digital advertising is a marketing method where companies pay a publisher (like a search engine or website owner) each time someone clicks or views their ads in a search result, on a website, on social media, or on a miscellaneous digital platform.
With this approach, you can essentially buy attention, rather than the (often long-term) approach of earning it organically.
The (Ad) ‘Bidding’ Starts at…
Imagine a digital auction room: different companies bidding for their ad to show up in a particular space.
For a really competitive space, the bidding might get a little pricey before it’s sold. Or, for a space those companies decide isn’t worth their time, the bids might stay extremely low.
Once all the bids are in, the auctioneer rewards the best ones – aka the best web pages and ads – with the best prizes (high online visibility).
Since they’re now promoting the best stuff, the auctioneer (publisher) is providing their users (or searchers) with the most relevant, most upvoted content.
This is how the internet monetized advertising, and it’s still how lots of ad platforms sell their ad space. The highest performing ads get the best visibility.
Far from being a blind auction, most platforms provide lots of transparency around the highest bids, which can give you the insight to determine whether you’re willing to compete for a particular ad placement or not.
Say you decide to put in a bid, and you nail the creative, copy, and audience-targeting to create a well-performing ad, you’ll see these ad platforms reward your hard work with lots more visibility.
And yes, paid advertising can effectively move the needle for lots of organizations.
Clicks vs. Impressions
There are two major ways that platforms will charge you for placing your ads.
One is for visibility, or – in the world of digital advertising – impressions. Eyeballs. Whether or not someone does something based on your ad doesn’t factor into the cost structure. The size of their audience is the key consideration when it comes to ad placement pricing.
The other way you can pay is based on action – a user clicks on your ad and you get charged “the cost per click”, or the price determined by the publisher with the other bidders in mind. Hence the term Pay-Per-Click (PPC) or Cost-Per-Click (CPC).
- Impressions means you pay for visibility.
- Pay-Per-Click means you pay for engagement.
CPM (impression) channels are usually more focused on awareness or views (display ads, programmatic advertising, OTT, etc). CPC channels usually focus more on driving traffic (more intent-based, i.e most Facebook campaigns or Google Ads campaigns).
Should you only do PPC and ignore impressions?
Just because a particular digital ad platform or publisher charges you by impressions, that doesn’t mean it won’t trigger actions (clicks, downloads, visits, etc.). The main drawback is that you’re not guaranteed results for your spend.
Pros and Cons of Impressions & Visibility-Based Pricing
Say you spend $10,000 on a campaign that only charges you for impressions. For example, imagine that’s a video ad on a streaming platform. That entire $10k goes out the door, and you might see a bump in business. You might even put a promo code on there, and be able to directly tie some sales back to people who saw that exact video ad.
And if it’s a really effective channel, one that your audience loves, and the only pricing model available is for impressions, it’s probably still worth advertising there (i.e. think Hulu ads for insurance companies).
The downside is that you may place that whole $10k of spend on that ad and not notice any change in revenue. Unfortunately, it doesn’t matter. You got the ‘impressions’ you paid for, just not any leads.
Pros and Cons of Pay-Per-Click & Action-Based Pricing
Now, say you take that $10,000 and put it towards a Google Ads campaign instead. The upside is that whatever portion of that budget you spend is spent on action – people interested in your ad who decided to click on it.
The downside of PPC is that you only spend what gets clicked – meaning, maybe you decide to do a search-based campaign with that budget of $10,000, but the lack of search volume for the terms you choose means only 10 people click on your ad at a cost of $10 a click.
So, you only got 10 leads and spent $100 in the span of your campaign, when you were hoping for a huge new batch of hungry marketing-qualified leads.
The Importance of Targeting
Getting your audience parameters right is just as important – maybe even more important – than putting together the perfect ad.
Digital platforms have all sorts of ways of divvying up audiences based on factors like:
- Demographic info (age, income, geography, family size, etc.)
- Psychographic info (defined as things like values, affinities, and motivations)
- Subscriptions
- Purchase history
- Online behavior
- etc.
- etc.
- etc.
- etc.
It’s a long-list-growing-longer as we all spend more time on devices and online platforms, interacting, engaging, buying, and sharing. As the list grows, the possibilities for dialing in the right audience for your message go up – and the work it takes to get it right can too.
Different platforms have different parameters, so having strong marketing personas can help you spend less time and money on trial and error, and get straight to driving clicks and earning qualified leads.
Need help understanding and identifying your audience? Get research-backed personas to help you drive better results.
Types of Paid Advertising
There are lots of different types of paid advertising that you can explore for lead generation or brand awareness. We’ve listed some of the more common categories that regularly drive results, and we’ve given a little bit of introductory context on how to navigate each of them:
Search Engine Advertising (or “SEM” – “Search Engine Marketing”)
When you type in a query to Google, you can get a few different types of results:
(It’s worth noting that while Google is the most popular search engine, others, such as Bing and Yahoo, also exist and get traffic).
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- Pay-per-click (PPC) ads: Remember action-based pricing and the bidding war? If you bid through Google, your ad might appear in the list of links above the organic results, known as paid search ads. While most effective digital strategies rely on both PPC and strong SEO, paid search advertising is an efficient way to bypass the competition and the tedious, long-term work of rising to the top by ranking organically. With PPC, businesses can funnel traffic to a website or an effective, targeted landing page – immediately. *This is part of paid advertising.*
- Organic search results: This is the main section of search results. These organic results are ranked by the quality and content of the web page. To rank in this section, your landing page needs to be relevant for the searcher and needs to have a high click-through rate. This is commonly called search engine optimization (SEO). Ranking well within the organic search results has become more difficult over time, as almost every business has a website and is fighting for traffic, and ranking factors constantly change. Through time and persistence, you can earn rankings ahead of your competitors in the organic search results. *This is not part of paid advertising.*
Paid search ads are simple. Let’s say you are an e-commerce site and place a large order for warm coats before a winter storm hits and want to advertise your inventory on Google.
When someone searches for a keyword you bid on, like “puffy winter coat,” their search term will trigger your text ad. Your ad will show up in the sponsored section of the search results page.
This is a cost-effective way to get visibility quickly. And, if the searcher clicks on your compelling ad, visits your website and makes a purchase, then—voilá! You’re on your way to nailing this whole PPC thing!
You can also target searchers based on their geography with search ads, so it’s only shown to people in your local area. It’s a great way to compete in your industry and target local audiences and people who are already looking for you!
IN SUMMARY: In Google, Search Engine Marketing (or SEM) targets users based on what they search. Ads appear at the top of a SERP (Search Engine Results Page) above organic results and featured snippets.
If you win the bidding and performance war, your ad can appear high up on the page and you pay per click (PPC) for every user who clicks through your ad to your landing page.
Social Media Advertising
Most social media platforms now have proprietary advertising platforms. We commonly run pay-per-click ads through Facebook and Instagram, YouTube, LinkedIn and sometimes even Twitter.
Social media pay-per-click differs from search ads in that, instead of targeting users based on search terms, you target users based on interests. Social media platforms, especially Facebook & Instagram, have highly curated audience segmenting tools based on user data.
Similar to search advertising, the cost per click of social media advertising is dependent on your competition and goals (such as if you’re optimizing for clicks or for exposure).
Instagram and Facebook use a cost-per-action strategy (pay-per-click). With pay-per-impression, companies pay for exposure, and with pay-per-click, companies pay for action.
Facebook owns Instagram and you can advertise on both with the same setup. LinkedIn has increasingly become an interesting B2B channel to advertise on, but it’s typically a more expensive investment.
Twitter advertising includes promoted tweets, promoted accounts, and promoted trends. Promoted tweets cost can range from under a dollar to a few dollars per action. Promoted accounts cost a few dollars for each follow. Promoted trends can cost up to hundreds of thousands of dollars per day.
B2B Channels
We’ll typically utilize Facebook, Instagram, and LinkedIn for a B2B social media paid advertising mix.
B2C Channels
We’ll typically utilize Facebook, Instagram, LinkedIn and consider Twitter as a paid advertising channel in a B2C social paid marketing mix. SnapChat also has offers paid opportunities for B2C marketers to consider.
IN SUMMARY: Depending on the social media platform you want to advertise on, you can go with a PPC or an impressions-based model. Instead of targeting based on search terms or ‘search intent’, you can target based on interests and demographics.
Need help growing your following on social media? Find out what tactics our social media experts use
Display advertising
Display advertising is a way to grow your brand’s awareness online and are targeted based on user activity. Display ads (often banner ads) are shown to your target audience when they are browsing the Internet. Display ads are generally pay-per-click.
Think about the time you spend online. Is it always focused, searching for the item you want to purchase? Sometimes. But it’s also spent online shopping and searching for your next vacation spot.
That’s why display ads are important — so you can keep your brand at the forefront of people’s minds when they are putzing around online.
Where can you place display ads?
Display ads are offered by a lot of websites, news sites and publishers (think local & national media outlets), and third party aggregators who will decipher the internet and place your ad in different online locations for you based on audience or targeting parameters.
This is how a lot of news-based websites and blogs create their revenue.
While you can successfully advertise on social channels with a small budget, the barriers to entry on paid display advertising are usually higher and require a significant investment up front before you can test or see any ROI.
On the other hand, these outlets and online blogs typically have proven, defined audiences that give them consistent attention.
If your budget is higher and you know your audience reads a particular type of focused publication, it may be worth browsing their online media kit and allocating some paid spend towards display ads.
Retargeting & Remarketing
In the world of digital advertising, “Retargeting” is a key tactic that’s almost unanimously in the marketing mix of effective paid strategies.
What is Retargeting?
Remember visiting the Patagonia website one time, and now everywhere you look & browse, you see that perfect fleece you didn’t buy following you around?
Retargeting involves collecting cookies on a user’s browser when they visit your website, then using those cookies to follow them around on the internet with visual ads.
You can also implement retargeting for a larger list of emails you have (and have each email’s permission to use).
It’s one of the more contentious topics when it comes to internet privacy these days, and more and more websites are offering opt ins to collecting cookies when users arrive, rather than just doing it.
Retargeting has one of the lowest cost barriers of all paid advertising tactics, and typically one of the highest ROIs.
The logic is simple – they already showed some interest in your website, and now you’re just consistently reminding them that you’re here, ready when they are.
How do you retarget users?
There are lots of tools you can use to implement retargeting. Facebook and Google can both facilitate this, as well as other third party tools like AdRoll.
Okay, what is the difference between “Retargeting” and “Remarketing”?
Used almost criminally interchangeably, these two terms largely mean the same thing. If you want to get really technical, retargeting is defined as the paid tactic of following around users who’ve visited your site with ads.
Remarketing just means you’re adding a new marketing touch point to someone who’s interacted with you digitally in the past, on any channel (remarketing = marketing again).
However, marketers use both words pretty much interchangeably.
A quick history on “Remarketing” vs. “Retargeting”
Meant the same way, Google’s tool to implement this technology was named “Google Remarketing”, while “Retargeting” was the term more commonly used by Facebook. Over time, these have merged into two words largely used the same way by marketers (who are notorious for being sloppy with defining our terms).
IN SUMMARY: For simplicity, let’s say retargeting and remarketing mean the same thing – which is collecting cookies when users visit your website, and following them around with ads you can personalize based on the page (or pages) they visited. You can do this via Google, Facebook & Instagram, or through lots of different third party ad platforms.
It’s cheap, it’s effective, and it’s a key point of contention in the conversation on privacy and permission-based marketing.
Native Advertising
Native advertising is a category of ads that just means the ad design and experience of interacting with it matches the platform the ad is placed upon.
Facebook and Instagram ads are good examples. Say you’re scrolling through your feed and you come across something that is clearly a paid promotion.
It still matches the platform and fits in with the organic content, but has a few distinguishing characteristics that separate it (i.e. the word “sponsored” in Instagram).
Most modern paid platforms are pushing towards native ads to increase the quality of their user experience since native ads are less jarring and usually rely on some personalization to ‘tailor’ the content to the user (think about targeting parameters on social platforms, and how platforms prioritize high-performing ads).
What’s an example of a non-native ad?
Think about any kind of video ads you experience on streaming platforms or traditional TV ads.
These advertisements don’t match the content of the show or movie you’re watching and therefore don’t really fall in the ‘native’ category. Banner ads on publications are often non-native as well.
Why does it matter whether my ad is native or not?
It’s a question worth asking. As a marketer, you may run into more restrictions on what you can submit if the platform requires a native ad. Everything from image sizes to word counts – and sometimes even restrictions on color palette – can be a part of the requirements.
Lots of platforms will also argue that native ads perform better. The more seamlessly they fit into the user experience, the less the user will perceive them as an ad and scroll right past.
On the flip side, native ads stand out less.
Metrics like cost-per-click and cost-per-lead can help you navigate what performs best with your audience.
IN SUMMARY: Most paid advertising now falls into the category of ‘native ads’, which means the type of ads you can place match the user experience of the platform.
Requirements are worth taking a look when planning a campaign, especially if you’re a socially-conscious, legal, political, religious or other-divisively-based-category of organization, as these platform’s policies can influence whether they’ll actually distribute particular ads on your behalf.
Video Ads & The Rise of OTT
With the rise of streaming platforms like Youtube that get revenue from advertising, big brands no longer needed to put all their ad spend towards network tv commercials or save up for one big, bold Super bowl ad.
What does “OTT” mean?
OTT or “Over-The-Top” advertising is in reference to video ads that reach “over” the cable box and give users access to video content (movies, news, TV shows) through internet streaming.
Those expensive, multi-year-long cable contracts you used to have to negotiate with a customer service rep after they got you in the door for a rate that tripled after the first 90 days? Excuse me, are you running any promotions in my area?
Those conversations are largely a pain point of the past, as subscription services like Netflix, Amazon Prime, Fubo, YouTube, Hulu have taken over.
What OTT platforms can you advertise on?
There are few different revenue models these platforms have adopted:
- We don’t charge you to watch, but you will experience ads (i.e. YouTube)
- We charge you a subscription fee for access to our content, and you can pay a little more to watch ad-free (i.e. Hulu)
- We charge you to subscribe and we show you ads (i.e. Peacock)
- We will not show you any ads (i.e. Netflix, HBO).
There are lots of different OTT platforms you can place ads on for varying degrees of cost. For example, ads on YouTube are going to be less expensive than an ad on Peacock (NBC’s streaming platform).
How do you advertise on OTT platforms?
Depending on the OTT platforms you want to place ads on, there are two methods:
- Place ads directly with the platform – i.e. on YouTube, uploading your own ad and targeting parameters
- Place ads through a third party ‘ad buy’ that will help you navigate the landscape of platforms, targeting, and audience.
Are OTT ads based on impressions or action?
OTT ads are based on impressions. There are more sophisticated models like YouTube’s pay-per-ad-view model arriving on the scene, which only charges you if a user chooses not to ‘Skip’ your ad after 5 seconds, but you’re still technically paying for eyeballs and not action.
Should we advertise on OTT?
While it’s impression-based, video ads can have a large impact on overall marketing performance. The barriers to entry are more expensive than other forms of paid advertising, but the return can be high.
Like all forms of paid advertising, it’s largely an audience question. B2C companies tend to dominate this landscape, but the level of targeting available can make this an impactful channel for B2B campaigns as well.
IN SUMMARY: OTT advertising is short-hand for online video advertisements on streaming platforms. Even the more sophisticated pricing models are still impressions-based.
Placing these ads can be expensive with high barriers to entry, but can result in high returns on brand awareness and lead gen if the ad quality is there and the audience targeting is dialed in.
Want help deciding whether or not to advertise on OTT? Find out what factors our PPC experts consider to drive better results.
Podcast Advertising
Another burgeoning paid advertising tactic is podcast ads, which are turning out to be one of the more effective ad channels. The level of targeting can get very specific – think about advertising an HR tool on an HR-themed podcast – and the loyalty that hosts have among their die-hard subscribers and listeners can make this spend a borderline influencer campaign.
The landscape is huge and growing by the second, and it’s getting increasingly niche. Similar to OTT, you can reach out to individual podcasts to place ads, or approach this with a third-party provider who will distribute your ads to a network of podcasts based on audience & listenership parameters.
Types of Podcast Ads
Similar to radio ads of days past, advertisers can place ads of their own, commonly in the form of 15-second ad or a 60-second ad.
Depending on the podcast, hosts will also read the ad copy themselves, providing a form of ‘native’ audio advertising that has some of the highest returns.
The URLs in the call-to-action may appear as a partner landing page (i.e. Athletic Greens on the Tim Ferriss Podcast) which can help with tracking and may even play into an action-based cost model.
Source: Athletic Greens
Podcasts will typically charge different rates for where the ad appears (i.e. more to place it at the beginning, less to place it at the end).
IN SUMMARY: Podcast advertising is a newer paid ad opportunity that provides exciting topic- and audience-based targeting opportunities.
It’s typically a flat-fee model driven by listenership (impressions), but the possibility for action-based pricing can come in the form of partner opportunities.
How Do Paid Digital Channels Work Together?
Like cheese and wine. Seriously. The most successful marketing campaigns leverage lots of combinations of paid digital advertising platforms to make the most of your ad dollars.
Channel choices should be driven by audience preferences. That customer who was searching for a new puffy coat? He or she may click your ad but not make a purchase immediately.
That’s where advertising on other channels and paid tactics like retargeting can help you take your marketing mix to another level.
To have a strong paid advertising strategy, you need to have a strong understanding of your audience.
- Where do they “live” online?
- What do they care about?
- What are they searching for, what kind of language do they use, and what do they buy?
Understanding your target market is key to the success of your campaigns.
Now, let’s talk about how to put all of this into action.
What Paid Digital Advertising Can Do for You
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- Instant Traffic. If you have a website up and running, you can create an account on a search engine advertising platform, and then set up and run your ads and reach a new audience. It’s as easy as that.
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- Strong ROI. You can choose where and when your ads will appear based off of keywords, audience parameters, online behavior, and so much more. This flexibility-done-right helps you get the right people on your website. If you opt for PPC over impressions, you won’t be charged unless a visitor shows interest.
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- Test profitability of different keywords or audience targeting. Look at your impressions, average number of clicks, cost-per-lead, and quality of that lead for overall ad performance. Based on your analysis, you can alter your keywords or audience targeting to generate more qualified leads and reduce costs.
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- Limit your daily budget. With PPC models, you can decide how much you want to spend per click or per day.
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- Increase brand awareness. As long as you’re within budget, your ads will appear when people search your keywords with PPC, establishing you in your industry. You’re not even paying for these impressions – you’re only paying by the click!
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- Boost campaigns. Need to reach new audiences? Amplify your brand presence within a competitive market? Appear above a specific competitor? Paid advertising is the quickest way to amplify your digital presence and get in front of the right audience.
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- Utilize retargeting. Sites can show targeted ads to users who have already visited your page. Past visitors are familiar with your brand, and while they browse the web, you can remind them to come back and convert.
- Split-test various messages and offers. With A/B testing, you can constantly test ad messaging and imagery. Test two ads against each other and analyze your results — which approach was the most successful? Repeat and iterate to constantly ask & answer what works with your audience.
How to Launch a Paid Digital Advertising Campaign
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- Make sure your landing pages are ready for an increase in traffic. In order to realize sufficient ROI from your PPC campaign, you need to make sure that visitors will be directed to a page where they fill out a form, place an order, or take some other action related to your inbound marketing sequence.
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- Create SMART goals. How will you know if your PPC campaign is successful? If you’re looking for an increase in brand awareness, can you actually measure that? Define your SMART (specific, measurable, achievable, relevant, and timely) goals to reach your objectives in a clear manner.
- Define your budget. How much of your budget will you allocate to your paid ad strategy? Determine your CPA — how much will you pay to get a potential customer to your site?
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- Be found by the right people. What keywords would your customers use in their search? Do your research on the type of language your personas use to increase your qualified traffic.
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- Design your ads. You know your target customer better than anybody. Design an ad that they cannot scroll past. Also think about your remarketing ads — if a past website visitor is presented (again) with your services, how can you bring them back to your site?
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- Choose a search engine advertising platform. Google AdWords? Yahoo/Bing? Facebook? Adroll? What makes the most sense for you?
- Watch the traffic roll in. You may see success right away. Or, you may need to tweak you audiences or your ad creative – or even reconsider your offer – before you find something that works.
- Review, refine, and reap results. The data from a PPC strategy is easy to access and analyze, so that you can optimize on the fly. You can test and iterate quickly to make sure you are using your PPC budget to the fullest.
