Types Of Online Advertising Compared
Watch the video, listen to the podcast, or read the article below.
Before getting into how to advertise let’s make the case for using ads.
The easiest and most reliable way to bring traffic to your website is to simply buy it. It’s the best form of traffic for most people because:
- Everything is totally under your control
- The results are easily measurable and trackable
- The traffic can start flowing in on the same day that you set it up
The obvious downside is that it costs money. However, this is obviously NOT a problem if you have a positive return on investment (ROI).
So your first objective when starting to use paid advertising is to set aside a test budget and start running test ads.
If you don’t know what I mean by tests, I’m talking about setting up different ads that use a different sales pitch so that you can figure out what works best. Then you can scale up the winners and kill the losers.
Once you’ve figured out what works, paid advertising has a massive advantage over all other forms of marketing because you can literally push a button and multiply your ad spend by 10 and that will usually multiply your profits by 10 (assuming there is sufficient ad inventory available).
Now, let’s talk about the different types of paid advertising.
CPM means cost per thousand. I know, if it means cost per thousand, why isn’t it CPT instead of CPM? The M in CPM refers to Roman numeral for 1,000.
If you use CPM advertising it means that you will be charged a flat rate per 1000 impressions. An impression is just a measure of the number of times the ad is displayed.
So in this case it doesn’t make any difference whether a prospect clicks on the ad or doesn’t click on the ad, you pay a fixed amount of money in return for the ad being displayed 1,000 times.
Not surprisingly, CPM pricing is most commonly used in display advertising.
CPM rates are usually pretty inexpensive
You have more control over your budget because you’re paying a flat rate
Your ad is guaranteed to be displayed specific number of times
If nobody clicks on your ad and you receive no traffic at all you still have to pay for the ad
It’s difficult to quantify the return on ad spend until the end of the campaign
CPC means pay per click. As the name suggests you only pay if the prospect actually clicks on your ad. If 1 million people see your ad but nobody clicks on it, you paying nothing.
The amount that you pay per click is usually determined by an auction system where are you compete with everybody else that is targeting the same keyword to see who is prepared to pay the most per click.
In the case of Google Ads, it’s a little more complicated than this because Google also factors in the click through rate for your ad, the quality of your landing page (Google wants the content on your landing page to be relevant to – and consistent with – the sales copy in your ad and the keyword that the user entered) and a list of other things then it combines all of this data with the amount you’re prepared to spend per click in order to figure out when and where to display your ad.
Unlike impressions, clicks are extremely simple to track. Either somebody clicked on it or they didn’t.
You only pay for the number of clicks you want
There’s no risk of over spending on ads that are not converting because you can turn ads on and off anytime
The cost you’re prepared to pay per click and the overall campaign budget can usually be modified in real-time.
As a result of the fact that you’re competing with other advertisers for traffic this can get very expensive. If somebody has a more profitable business model than you then they can afford to pay more per click and still make money and push you out of the market in the process.
Just because somebody clicks on your ad doesn’t mean they’re interested in buying anything. They might just be curious.
There’s a little bit of complexity involved with managing Google Ads and Facebook ads. If you’re a beginner it could be very time-consuming for you to figure out how to compete with more experienced advertisers.
So, if a prospect clicks on your Google ad then goes to your website then goes to another website that happens to have Google ads on it, Google can display your ad again in front of your prospect while they’re viewing the other website.
The reason this can be effective is that the only people that will be seeing your ad in this scenario are people that have previously visited your website and these people are obviously more likely to click on your ad and than people that have never visited your website.
Retargeting can be a very effective marketing strategy but it’s likely that you’ll need to generate at least 1000 visitors to your site per month in order for it to have any impact.
Display Ads And Banner Ads
This is probably the first kind of advertising that comes to mind when you hear the word advertising because you see it on every page on the Internet.
The biggest supplier of these ads is Google. If you want to use this type of advertising yourself then you need to design a banner ad, set up a display advertising campaign on Google Ads then Google will display your ad on websites that it thinks will be relevant to your ad.
They are very common and they can be very effective but they tend to target customers that are not actively looking for something. So, this is a form off interruption marketing (like old school TV ads that interrupt your viewing experience). The objective of these ads is to interrupt you in the hope that you might be interested in whatever the advertiser is selling.
You’re probably rolling your eyes and thinking about how much you hate these ads but they’re extremely effective on Facebook. At the time of this article/video facebook’s market capitalization is US$600 billion and it’s all attributable to interruption marketing.
The big advantage of these ads over Facebook ads is that they only appear in front of people that are interested in whatever the ad is selling.
For example if you’re offering bookkeeping services in Seattle and somebody in Seattle is searching for a bookkeeper on Google then you know two things about this person with 100% certainty.
They’re looking for the specific service that you are offering AND they want it right now.
This prospect is infinitely more valuable to you than some random person working through their Facebook feed that sees ad offering bookkeeping services in Seattle.
And this is the reason that advertising on Google is more expensive than advertising on Facebook. In some cases Google will be a better advertising option than Facebook and in other cases it will be the other way around.
If people are not searching for the product or service you are selling then interruption marketing (Facebook and similar platforms) is the best option for you.
For example, if you are selling a new invention, nobody will be searching for it because people know it exists.
If people are actively searching for your product or service then search engine marketing is the best option. In some cases you can do both.
If You Use Ads, You MUST Do This:
It’s important to make sure that you send your incoming visitors to a specific page on your website that has been created for the specific purpose of converting traffic from a specific ad into customers.
These pages are called landing pages and these are the reasons you need to do this:
Landing pages allow you to customize your message for incoming visitors. This allows you to seamlessly continue the message that started in your advertising and make sure that your prospects are very clear about what you’re offering and how they can get it without having to look around your website and figure anything out for themselves.
These custom landing pages allow you to push visitors to do specific actions (e.g. signing up for a trial, scheduling a call, downloading a report or buying something).
Landing pages make it easy for you to track the results of your advertising.
If you use Google Ads, Google will give your landing page a Quality Score based on the relevance of the page to the ad and, the better the quality score, the lower your cost per click.
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