Paid Ads

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.

Benefits of Paid Social

• As organic reach continues to plummet, paid social enables brands to break through algorithms and connect with audiences that are unlikely to discover them otherwise.
• If you’ve developed a content offering that’s converting like crazy, use paid social to spread the offer to your ideal audience and get an instant boost in conversions.
• 64% of people surveyed say they use social media to find shopping inspiration, meaning that the majority of your audience could be receptive to your promotional messages.
• Use paid campaigns to reinforce the values and messaging that you release through organic social.
• Leverage audience targeting to tap into the precise shoppers that you want to reach. For example, Publix (a liquor store) uses geographic targeting to reach 21+ consumers who are near their store locations in the Southeastern US.

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”)

• 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. 
• 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.

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.

Influencer Marketing

In recent years, influencer marketing has become an extremely effective source of paid advertising. Specifically, influencer marketing refers to working directly with a well-known industry name (such as a celebrity) to encourage your target audience to choose your company/brand. This strategy can be especially effective on social media and is a great alternative to paid ads, which some customers are now blocking. And in 2016, the use of influencer marketing even surpassed print marketing for the first time.

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. 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. 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.

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).

How to Develop Your Paid Advertising Strategy

Identify Your Goals
As with everything in marketing, you need to have goals in mind before you start anything else. Who are you trying to reach? What exactly are you trying to achieve and what do you want this audience to do? What is the end result? Different goals and audiences will need different campaign and ad types as well as different platforms. The platforms we mentioned are usually quite helpful with this as they’ll tie in specific campaigns with goals. This means that you usually start your campaign with a goal and choose the relevant options they offer you. Goals can be categorised based on your buyer’s journey as people will need different things depending on which stage they’re at. 

• Awareness – this is when someone is still researching and is aware that they have a problem or a need but don’t know much about it yet. The goal attached to this will be to reach more people to make them aware of your products or services. This can usually be measured by impressions – how many people saw your ads – as well as clicks – how many people were interested and clicked through to learn more. It can also be measured by engagement metrics – how many people engaged with your ad by liking a post or watching a video, etc.
• Consideration – this is when someone has clearly identified their problem or need and are now in the phase of considering the options they have to solve or fulfil it. To measure this, you might still look at clicks to your website as well as what actions people took once on your site. Did they fill in a form to download a guide or navigated to other pages to learn more?
• Decision – this is when someone has identified how they’ll solve their problem or fulfil their need and they’re looking for the organisation that will do just that for them. This is usually measured in terms of conversions – did they contact you or purchase from you?

Know Your Audience
It’s great to know your goal but it’s even better to know who you’re targeting. You should do some research to understand who your potential customers are. This can be done by creating personas which are semi-fictional characters that correspond to your ideal customer. You define them by understanding who they are as well as the challenges and pain points that will trigger them to buy products or services like yours. Knowing your audience is essential to build efficient ads. It will help you understand which platforms to advertise on and which to avoid. It will also help you choose the best targeting options to reach them and you’ll be able to craft great ads that will appeal to them.

Calculate Your Budget
Now that you’ve identified your goal and your audience, you need to know how much you can spend. You might already have a specific budget that has been given to you, but you’ll need to decide where to spend it. We know most businesses don’t have endless pockets and their budgets need to be maximised for return. The biggest mistake that most businesses make is spreading their budget too thin between platforms or campaigns. They end up being limited by their budget and don’t see any positive results. That’s why it’s best to focus on one platform or one type of targeting rather than trying everything at once. This way, you can fully commit to maximise performance. If the results end up being bad, you can move on to the next. Marketing is all about trial and error. There are many tools out there that can give you estimates of Cost per Click (CPC) and search volumes to calculate how much advertising on specific terms might cost you. Advertising platforms will also sometimes give you an idea of the budget you’d need when you’re setting up your campaign and choosing targeting options. Although these are usually pretty vague, do pay attention to them and it will give you a broad estimate of what you can expect. However, you’ll only know how much it will cost you exactly until you start advertising.

Which Paid Media Channel to Invest in?
There are many online advertising channels out there, so which one should your business invest in? To answer this question, you need to have thought about your goals, identified your audience and calculated your budget as mentioned in the previous section. These steps will help you determine which channel is best for you.

Meet Your Audience Where They Are
There’s no point advertising on a channel if your audience doesn’t use it. It sounds pretty obvious but sometimes businesses focus on a channel because of the hype or novelty rather than figuring out if their audience actually uses it. If your target audience is made of HR professionals, LinkedIn is probably a good bet because you’ll be able to target them easily and they’ll definitely be using the platform on a regular basis. However, if you’re targeting middle-aged mums, Facebook might be a better bet as they probably hang out more on the platform. Both groups could also be targeted on Google as this platform casts a much wider net.

Keep Focused on Your Objective
Although most online advertising platforms cater for the various stages of the buyer’s journey, some might work better for certain objectives. Once you’ve identified the platform your audience uses online, look into the types of campaigns they offer to see if it will fit your objectives. If you’re looking to reach as many people as possible for an awareness campaign, Google is usually a good bet because their network covers over 2 million sites and reaches over 90% of people on the internet. However, if you’re more interested in pinpointing specific audiences, LinkedIn, Twitter or Facebook can work really well. If your goal is to sell products, Google Shopping and Facebook offer great campaign types. If you’re looking to gather leads though, LinkedIn and Google are usually the best places to go.

Reach Your Ideal Cost Per Acquisition
Once you know where your audience goes and what your goals are, you need to consider how much money you’re ready to spend to acquire leads or customers. Some platforms might be more expensive than others although it’s always difficult to determine this beforehand because most of them work on an auction basis so there aren’t any fixed prices to review. Depending on the industry, Google can be quite cost effective, but you’ll need to do some keyword research to see how competitive your sector is. Microsoft Advertising, formerly known as Bing Ads, is a good alternative as they tend to be slightly cheaper although their reach can be much smaller than Google depending on the industry and geography you’re targeting. Although we’ve seen an increase in prices in the past few years, the Google Display network is a cheap way to reach a vast audience where you might pay under £1 per click. However, bear in mind that the less you pay, the lower the quality of your placements will be. YouTube is still very cheap, and you can pay as little as a few pennies per view. Compared to the Google Display and Video networks, LinkedIn and Facebook tend to be much more expensive, but you can usually target more specific audiences. Do your research but remember that you won’t know exactly how much it costs until you give it a go. You’ll have to test the networks you’re interested in until you find the right combinations. Before jumping into a platform, you should determine how much your average lifetime customer value is worth to understand if your cost per acquisition is too high or if you can afford to spend more to acquire new customers.

Measuring Performance of Your Paid Campaigns

Tracking
If you’re not tracking engagement and conversions from your paid campaigns, you might as well throw money out of the window! Most PPC advertising platforms provide you with some form of tracking, usually a tag or a pixel that you need to add to your site. This allows the advertising platform to gather data about the person who clicked your ad once they’re on your site and present this data within their analytics report. t’s important to install this tracking correctly and fully, as it will give you invaluable data about the performance of your campaigns. Some platforms like Google will even start optimising the campaigns for you; if they see a particular keyword gets more conversions, Google’s machine will push your ads more often for this keyword to increase the number of conversions. It’s in their interest to show you that their platform brings you value! You should also ensure that you’ve configured your main analytics platform to track traffic from your various advertising platforms. Most businesses use Google Analytics but there are other platforms on the market such as Adobe or HubSpot. Ensure you’re using the right UTM codes on your ads and link your analytics platform with your advertising platform if available. This will ensure that both platforms understand each other and paint the overall picture of a user’s journey without any gaps. Be sceptical about the number of conversions some advertising platforms record as it’s in their interest to attribute conversions to their platforms. Remember the buyer journey is complex and one conversion might be the result of various platforms put together. We usually prefer to use Google Analytics to review performance as it provides a holistic view of the channels you’re using. Tools like HubSpot can also give you a better idea of how your campaigns are performing.

Key Performance Indicators
Remember the goals and objectives you had to set up earlier? Make sure you keep them in mind when analysing the performance of your campaigns. It’s easy to get overwhelmed by the number of metrics your advertising platform is showing you. Focus your attention on the metrics that matter to reach your objectives – your Key Performance Indicators or KPIs. If you’re looking to get conversions (not necessarily just sales but sign ups, downloads, etc as well), you shouldn’t worry too much about how many likes a post received but rather look at the clickthrough rate and the conversion rate. Are people enticed to click through to your website and, once they’re on your site, are they enticed to buy? You can then decide which metric you should improve. If your clickthrough rate is low, try changing your ads. If your conversion rate is low, you’ll need to review your landing page.