Will online advertising work for your business?

In this digital age, creating effective online advertising is essential for small businesses to find new customers and expand their reach. There are many online advertising options including paid social, pay-per-click (PPC), paid search, online display and in-app. A digital marketing consultant can set up an effective online advertising program that would include search engine optimization (SEO), social media marketing, and email promotions.

The days of placing an ad in the local newspaper are pretty much over. According to AdvertisingAge.com, internet ads surpassed newspaper advertising spending for the first time three years ago. And, that trend will continue to grow exponentially.  It’s now all about getting noticed on the web.

The popularity of DVRs allowing people to fast-forward through TV ads, iPods replacing radio and people getting their news online has rendered traditional forms of advertising ineffective. In fact, Forbes predicts that traditional advertising as we know it today will cease to exist in the near future.

There are two basic types of online advertising: search and display. Search ads allow search engines such as Google to match your ad to websites or apps based on keywords or content and topics. This assures your ad will be seen by potential customers who are looking for your particular service or product.  Display advertising contains images or videos and delivers a business’s message to a website visitor.

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Why online advertising can work for your local small business

Since people today spend more of their time on the Internet with their mobile devices or desktop computers, online advertising is the number one marketing tool for small businesses.  All4One.com says that online advertising is even more valuable since Internet users can instantaneously share their finds with friends or family. Your advertisement on the right website or in the right search engine results can bring in not just one visitor or potential customer, but also reach their friends, family and social networking circle.

What types of online advertising are available?

There are more than a dozen types of online advertising. The most popular are display, paid search ads, pay-per-click, banner, paid social (Facebook, Twitter), in-app and Google AdWords. Let’s take a look at each

      1.Paid Search Ads – These are an extremely effective way to advertise. Your ad will appear when people are searching online for a specific service or product you offer by typing in keywords you choose. A search engine will match the queried keywords to your ad that will drive relevant traffic directly to your website. According to WordStream, there are 2.3 million searches performed every second on Google and the majority of results contain Google search ads.

      2. Pay-per-click (PPC) – This is the most common and effective type of online advertising that will direct the traffic you want to your business website. A business can bid for an ad placement in a search engine’s sponsored links that is based on a keyword or keyword phrases. Your ad will appear when people search for a service or product you offer when a keyword query matches your keyword list.

For example, if someone searches for an “accountant,” accounting firms that bid for a PPC ad would come up on the search results page. The search engine is paid only when the ad is clicked. A lot goes into building a winning PPC campaign, says WordStream. It requires researching and selecting the right keywords, organizing those keywords into ad groups and setting up PPC landing pages that are optimized for conversions. Advertisers who can create intelligently targeted pay-per-click campaigns are charged less for ad clicks.

     3. Banner – This an imagebased type of advertising where a rectangular graphic display stretches across the top of a website or at the right or left sidebars. The host is paid by several methods according to Investopedia such as page views, per clicks or per action. Page views are when a website is called up, per click is when someone actually clicks on the ad and visits the advertiser’s website, and per action is when a visitor clicks on the ad, goes to the advertiser’s site and makes a purchase.

    4. Paid Social – These ads appear on social media sites such as Facebook and Twitter. The greatest strength of these ads is that you can tailor them to target a specific audience. Advertisers can target users based on profiles they follow and news they read. As a result, this will increase your web traffic and, ultimately, gain more customers for your business. According to Social Media Examiner. advertisers are increasingly using paid social media advertising as an integrated, cross-platform tactic, and are running it in conjunction with other online and offline media.

A survey by Social Media Examiner found that 66 percent of advertisers use paid social media combined with other online ads. The survey also showed that 83 percent use online display, 46 percent use online video, and 40 percent use mobile. Fifty-one percent report they run paid social advertising together with offline advertising including print (52 percent) and television (37 percent). An example of a successful social media ad campaign is Heineken Light beer. In just three days, they reached 54 percent of their audience – 35 million people – with video ads on Facebook.

    5. Inapp – This is an increasingly highly effective form of advertising where ads, such as videos or displays, appear directly in apps. In-app ads use location data, or geo-tracking, that helps target specific users. Since we live in a mobile world, this form of advertising must be considered as part of your digital marketing program. According to Inc.com, the number of worldwide smartphone users is expected to surpass two billion this year with 200 million of them in the US alone. Nearly half of mobile users reported that they use their smartphone for purchasing online.

    6. Display – These ads are boxes on websites that contain text, graphics, video or audio. They can be banner ads that appear at the top of a website or ads that appear on the sidebars. Initially, these advertisements appeared on websites that were not relevant to the context.  Now, the ads are becoming more targeted. Many are now sold through ad networks that represent various websites. Google AdWords is the largest network and Amazon now offers a similar service.

    7. Google AdWords – A pay-per-click program, Google AdWords are displayed on a website when a search is initiated using a keyword that matches your service or product. Advertisers bid on keywords and pay for each click on their advertisements. When a particular product or service is searched, Google chooses ads from its pool of advertisers to appear in the ad space on its search results page.

According to WordStream, there are 2.3 million searches performed every second on Google and the majority of results contain Google search ads. The “winning” ads are chosen based on a combination of factors, including the quality and relevance of their keywords and ad campaigns, as well as the size of their keyword bids. As a result, your ad is seen by people who are searching precisely for what you offer.

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What is keyword research and why is it important for creating PPC advertisements?

A successful online, pay-per-click (PPC) advertising campaign hinges on keywords – using relevant words that will result in clicks and conversions, says WordStream. Keyword research is essentially predicting or bidding what words customers will type into the search box. Understanding your customers and what words they will use when looking for a product or service you offer ensures your ad will come up.

You must use keywords that are relevant to your business. WordStream suggests using synonyms and related words and phrases. Also include variations of words and phrases so search engines can make connections between related items.

Using both broad keywords and specific ones will attract customers to your product or service. Google’s new program now automatically finds variations of keywords that helps increase an ad’s reach.

An example from WordStream: If you sell shoes, you should include related words such as “running shoes” and “jogging shoes” in your ad. Another example is “women’s long-sleeve shirts.” The ad should include, “women’s long-sleeve tees,” “women’s long-sleeve t-shirts” and “ladies long-sleeve shirt.”

How you pay for online ads

According to Digital Publishing 101, there are three ways ads are sold:  cost-per-click (CPC), cost-per-thousand impression (CPM), and fixed cost.

CPC – With the cost-per-click form of advertising, the advertiser is charged each time a visitor clicks on an ad. For this reason, it’s often called performance-based advertising since you only pay for results. This is the method used in paid search advertising.

CPM – This method is most often employed for display advertising. If a website charges $100 for an ad, the advertiser is charged that $100 for 1,000 page views, also called impressions.  The payment for the CPM method is not based on the ad’s performance. However, performance can be easily tracked.

Fixed cost – Advertisers pay a fixed amount for an ad to appear for a specific period of time, regardless of how many times it is viewed or clicked. While the advertisers deal directly with websites, most advertising is sold through ad networks which run your ads across a range of websites, based on parameters you select. Among the biggest ad networks are Google AdWords and Microsoft adCenter.

How paid search advertising works

Paid search advertising includes pay-per-click, and cost-per-thousand-impression as part of a larger field known as search engine marketing (SEM). Businesses pay to have their listing appear when a person queries a keyword. This type of marketing is based on a business using keywords in their ad that will match a query.

When a person searches for a particular product or service, for example, “dentist,” a list of local dentists that have search ads with matching keywords will come up. A business can target an audience seeking their product or service compared to a display ad that blankets websites with the hope someone will click on it.

According to Digital Publishing 101, there are two types of targeting technologies to attract specific visitors to a website ad – contextual and behavioral.

  1. Behavioral advertising – This targets visitors based on information that ad systems learn about internet browsing behavior such as pages visited, links clicked on, time spent on sites, and searches made. Google pioneered this technology which has controversial privacy issues associated with it.
  2. Contextual – Targets visitors based on keywords. The advertising system scans the website for keywords and matches ads to relevant pages.

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Paid social advertising

Advertisers use what is known as “identity marketing” to target users on Facebook and Twitter using such demographic data as gender, age, income, marital status and level of education along with browsing preferences and social behavior to target potential customers. Additionally, users are targeted by the types of pages and profiles they follow, the news they read and what they purchase.

 What are some examples of online advertising campaigns?

Examples of advertising campaigns include coupons, Google AdWords, social media and videos. Each has its own strength and, used cumulatively, can produce a very successful campaign.

  • Coupons – They are no longer limited to newspapers or flyers. More and more businesses are using online coupons, either digital that can be loaded onto a smartphone, or printed.
  • Google AdWords – This is one of the most popular forms of online advertising today. Your ad appears in search results when keywords in your ad are matched in a query.
  • Social media – AdvertisingAge.com reports that advertisers spent $5.1 billion on social media ads in 2013 and that amount is expected to exceed $14 billion by 2018. Compared to regular web ads, Facebook ads have more than eight times the click-through-rates and mobile ads have more than nine times the click-through-rates. Promoted tweets on Twitter have an average engagement of 1% to 3% compared to banner ads.
  • Videos – According to Forbes, more small business are turning to online video to engage their audience. A short video about your business is becoming the new way to communicate and engage with potential customers online or on a mobile device.

Online advertising elements

According to WordStream, there are several pieces of an advertising campaign. They include:

  • Email Marketing – This is one of the most common elements in an online advertising campaign. Some advertisers launch email-only campaigns to highlight time-specific offers or content downloads, whereas others use email to complement their other digital marketing channels. Email marketing can be highly effective, making it a popular choice for today’s advertisers.
  • Landing pages – When someone clicks an ad, they are taken to landing pages -specialized, optimized web pages that feature specific products or services featured in the advertisements themselves, or they may include prompts for users to provide the advertiser with more information, such as web forms. The pages also encourage visitors to complete an action, such as making a purchase, requesting additional information or downloading a piece of content for lead generation purposes.
  • Sponsored Content – This can take many forms, from advertorial-style editorial content featured on websites, known as native advertising. Facebook and Twitter offer this form of advertising.

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How can we measure online advertising effectiveness?

Advertisers must know how their ad campaign is performing. Online advertising can be tracked through analytics. Additionally, analytics can measure how users found and interact with your website. Metrics is an important tool of an online advertising campaign to determine if it is successful or needs to be tweaked.

According to Forbes, there are several metrics that need to be tracked. These include: total visits, new sessions, bounce rate, channel-specific traffic, total conversions and customer retention.

Total visits – Forbes says your website should be the primary target for customers and potential customers. This will give you the “big picture” of how your advertising campaign is going. If the visits drop, you can check which marketing channel needs to be improved.

New sessions – This metric is found in Google Analytics and measures the number of site visitors – both new and returning. The metric helps you determine if you website is encouraging repeat customers and the effectiveness of your campaign. Should you change the content or structure of your site and find a drop in the ratio of recurring visitors to new visitors, you may need to go back and make changes.

Channel-specific traffic – Also a Google Analytic metric, this helps segment traffic from the point of origin. This is useful for a full online marketing campaign since it breaks down each channel where the total visits metric gives an overall measure. Forbes says there are four main channels to watch:

      1Referrals – These include external links from other sites

      2. Organic – These are visitors who found you after performing a search

      3. Social – Includes visitors who found you through social media. It’s an excellent way to gauge the strengths of your SEO, social media marketing, content marketing, and traditional marketing campaign

      4. Direct – This tells you how many people visited your site directly

Bounce Rate – This shows you the percentage of visitors that leave your website before further exploring it. Visitors are considered “bounced” if they leave your homepage before clicking on any links after searching for you. You generally want the bounce rate to be as low as possible. The more time someone spends on your site, the more likely they are to purchase something. Additionally, a low bounce rate gives you a higher SEO score.

Total Conversions – According to Forbes, this one of the most important metrics for measuring the profitability of your overall marketing efforts. While it’s possible to define a conversion in many ways (such as filling out a lead form or completing a checkout on an e-commerce site, etc.), conversions are always seen as a quantifiable victory in the eyes of a marketer. Low conversion numbers could be the result of bad design, poor offerings, or otherwise disinterested visitor

Lead to Close Ratio This is a measure more of your sales success than a measure of marketing efforts. Without an efficient and successful sales follow-up, any leads you get from marketing could be useless. This metric is easy to define: simply divide your total number of sales by your total number of leads, and you’ll get a ratio that defines your sales success independent of your marketing efforts.

Customer Retention Rate – According to Go Gulf, 41% of online revenue comes from returning and repeat purchasers, who represent only 8% of all visitors. Just a 5% increase in customer retention can increase profits by 25% to 125%.

Forbes says customer retention can be difficult to measure if your buy cycle is long or if your business revolves around one-time-only sales or if you have an extended buy-time.

However, subscription-based services, e-commerce platforms, and most conventional businesses can measure customer retention by calculating what percentage of customers return to your business to buy again. Low customer retention metric can be a symptom of a product or service that isn’t working or an indication of lacking outreach programs.

The future of online advertising

An online advertising campaign is a must for a small business to compete in this digital age. As more and more people turn to the web to search for products and services, creating an effective online advertising campaign is imperative for businesses

Visit us at metroannexinteractive.com to learn how we can help create an effective online advertising campaign for your business.