Online advertising has become a massive chunk of marketing budgets these days, so understanding its value is key. But here’s the thing, people are getting pretty fed up with ads that interrupt and distract them. That’s why it’s important to strike the right balance.
The trick is to focus your ads on your goals while keeping them engaging and enjoyable for your audience.
In this class, you’ll learn about the different types of online advertising, how to choose the right one for your goals, and tips to make your ads more effective and less annoying for your audience. By the end, you’ll have a clearer idea of how to create ads that work without driving people away, Let’s get a move on!
What’s Online Advertising?
Online advertising is the art of using the internet to deliver marketing messages to the right audience at the right time. It’s a powerful tool to attract people to your website, boost your brand’s visibility, and, most importantly, encourage your audience to take meaningful action, whether that’s purchasing a product, signing up for a service, or clicking a link. The ultimate goal is to inspire engagement and drive results.
The Role of Bidding Systems in Online Advertising
Bidding systems are at the heart of online advertising, determining how ads are placed and priced. These systems operate through real-time bidding (RTB), where advertisers compete for ad space in a live auction as users interact online. Platforms like Google Ads use models such as cost-per-acquisition (CPA) goal bidding, allowing advertisers to set a target action cost while maximising conversions.
Programmatic marketing automates this process, relying on demand-side platforms (DSPs) to bid on ad impressions from ad exchanges. These exchanges act as marketplaces where publishers list their ad space, and advertisers bid in real time. The highest bidder’s ad is displayed, ensuring the placement aligns with both budget and geotargeting preferences.
How Ads Are Delivered
The ad delivery process begins with programmatic advertising, which uses algorithms to match ads with users based on their behaviour and preferences. Real-time bidding powers this system, enabling personalised ad placements almost instantly. Tools like geotargeting refine this further, ensuring users see ads relevant to their location.
Push notification traffic and native ads are other key delivery methods. Push notifications send messages directly to users’ devices, while native ads blend seamlessly into website content, avoiding the intrusive feel of traditional banner ads.
The Online Advertising Ecosystem
The ecosystem involves several key players:
- Ad Exchanges: Marketplaces where publishers and advertisers meet to trade ad inventory.
- Demand-Side Platforms (DSPs): Tools for advertisers to buy ad space efficiently.
- Publishers: Websites and apps that host ads.
- Affiliate Marketers: Partners who earn commissions for driving traffic or sales through ads.
A successful online advertising strategy doesn’t necessarily need to include all of these elements. Depending on your business model, you might find that one or two are more than enough, or you might benefit from a combination of them all. The key is to start simple: apply the most basic strategies first, measure everything, and let the data guide your decisions.
The Evolution of Online Advertising
The rise of the internet revolutionised advertising, turning it into the backbone of the business model for tech giants. In 1998, GoTo.com introduced keyword auctions for search ads, paving the way for companies like Google to dominate the digital ad space. Over the years, platforms like Google and Facebook perfected the art of combining data collection with precise targeting, making ads their primary revenue stream.
However, even giants have their limits. Google has reached its peak growth and now floods search results with ads, pushing organic results further down, sometimes below the fifth position. Facebook, once an unstoppable force, has also seen its influence decline over the past decade. While still a massive player, it’s no longer the fresh powerhouse it once was.
As these platforms focus on squeezing more revenue from their advertising models, the cracks in the system are becoming more visible. Businesses and users are left wondering: How much further can these giants push before users demand a more balanced and transparent online experience?
Types of Online Advertising
There’s a wide variety of online advertising options out there, and it can feel a bit overwhelming at first. Don’t worry, we’ve got you covered! Here’s a quick rundown of some of the most important types to consider:
- Social Media Advertising
- Content Marketing
- Email Marketing
- SEM (Search Engine Marketing) – including PPC (Pay-Per-Click)
- Display Advertising – such as banner ads and retargeting
- Mobile Advertising
Benefits of Online Advertising
Online advertising offers a range of benefits, including precise targeting and a personalised approach, allowing businesses to reach the right audience with tailored messages. With tools like affiliate marketing, email marketing, and search ads, companies can increase their visibility and drive traffic to their websites. Display ad banners and video advertising are great for boosting brand exposure, while influencer marketing leverages trusted personalities to expand reach.
Retargeting and conversion rate optimisation help maximise the return on investment, ensuring your ads are seen by the right people at the right time. Whether through social media advertising or video content, online advertising enables businesses to engage with a wide audience, ultimately improving brand awareness and sales.
Social Media Advertising
Once you’ve got a solid social media strategy in place, it’s time to explore advertising on these platforms. Most social media sites make it super easy to advertise directly, giving you tools to promote your products and services. They also provide handy analytics to track how well your ads are performing.
Whether it’s a boosted post, a promoted tweet, or even a full campaign rolled out across multiple platforms, social media advertising offers plenty of ways to connect with your audience.
Social media ads work best when your business already has a presence on these platforms, especially if you’ve built up a decent following. They’re a great way to attract new customers while keeping your existing audience engaged.
Influencer Marketing
This approach taps into the trust that social media users have in influencers. By partnering with popular social media personalities, you can expand your reach and boost sales.
Video Ads
Videos are fantastic for showcasing your products, highlighting their benefits, and telling a compelling story. They’re creative, cost-effective, and perfect for building brand personality and exposure. With so many people glued to their phones, video ads are an ideal way to grab their attention and present your offers.
Social Content Marketing
This form of advertising focuses on creating and sharing valuable, engaging content that resonates with your audience. It’s not just about selling, it’s about building a connection with your followers and encouraging them to interact with your brand.
Social Content Marketing
Content marketing is a brilliant way to put your brand and message in front of the right people. Its main aim is to attract organic traffic to your website by boosting your site’s SEO.
Once your strategy and content are in place, you can extend its reach by investing in paid promotion on relevant websites. Paid advertising can significantly increase the return on investment (ROI) of your content, without it, the cost of creating the content might outweigh the benefits.
Native advertising is another smart option. This form of paid media seamlessly blends with the site where it appears, making it look like part of the natural content. Often called advertorials or sponsored content, native ads are an effective way to engage audiences without feeling overly intrusive.
Email Marketing
Email marketing should be at the heart of your online communication efforts. It’s a fantastic way to stay connected with your existing customers and keep them engaged. Whether you’re a fan of Amazon or not, there’s no denying they’ve mastered targeted email campaigns, and there’s plenty we can learn from their approach. Email marketing allows you to create personalised and effective campaigns to build loyalty and drive sales.
Search Engine Marketing (SEM)
Search Engine Marketing is all about boosting your website’s visibility on search engine results pages (SERPs) by paying for placement. Don’t confuse this with SEO (search engine optimisation), which is about earning a high rank organically. SEM, often called PPC (pay-per-click), involves platforms like Google Ads or Microsoft Bing Ads.
SEM uses various compensation methods to charge advertisers. The most common include CPC (cost per click), where you pay only when someone clicks on your ad; CPM (cost per thousand impressions), which charges for every thousand views your ad receives; CPA (cost per acquisition), where you pay only when a user completes a specific action like a purchase; CPE (cost per engagement), focusing on interactions such as video views or likes; CPL (cost per lead), which charges based on lead generation; and CPV (cost per view), often used in video campaigns. Additionally, CPI (cost per install) is common in mobile app marketing.
Beyond these, fixed cost compensation provides a flat rate for specific ad placements, while revenue sharing splits profits between advertisers and publishers. Each method suits different goals, CPC is excellent for traffic, CPA drives conversions, and CPM is ideal for brand awareness.
However, advertisers must also be mindful of challenges like click fraud, which can inflate costs unfairly. Choosing the right model and regularly measuring metrics like ROI and attribution of ad value is crucial to success. For instance, a business wanting more website traffic might opt for CPC, while a mobile app developer could benefit from CPI. With thoughtful strategy and ongoing analysis, SEM can help you connect effectively with your target audience.
Display Advertising
Display advertising involves placing branded visuals, such as photos, videos, or graphics, on third-party websites. When clicked, these ads direct users back to your website. However, it’s vital to think about the user journey after they click; if your landing page doesn’t deliver, you risk losing potential customers and wasting your budget.
To ensure your ads complement your brand, choose website placements carefully. For more automated options, try contextual targeting (choosing sites based on relevant keywords) or topic targeting (selecting sites with similar content). Retargeting is another effective form of display advertising. It allows you to show ads specifically to users who’ve already visited your site or are part of your database, making it a targeted and cost-effective strategy.
Mobile Advertising
Given how much time we spend on our smartphones, mobile advertising is an excellent way to connect with customers. However, it’s a method that’s becoming increasingly regulated, so you’ll need to tread carefully. Popular mobile advertising strategies include ads within mobile apps, push notifications, SMS/text messaging, and MMS. If used thoughtfully, mobile advertising can be a powerful way to engage your audience wherever they are.
Emerging Trends in Online Advertising
Native advertising focuses on gaining trust by addressing users’ needs, and today’s AI-driven tools are transforming this approach. AI-powered ad placements are currently some of the most cost-effective tools available, mainly because they’re relatively new and not yet widely adopted.
This creates a unique opportunity to test and benefit from these technologies before they become more expensive. AI tools use advanced algorithms to analyse vast amounts of data, identifying the best times, platforms, and audiences for your ads, helping you reach the right people efficiently.
However, there’s a common misconception about simply hitting the “promote” button on a platform and expecting a flood of customers. While you might see some results, these basic AI tools are often limited. They don’t allow for the customisation or deeper audience engagement needed to make your ads truly effective.
This can make your investment less profitable, with a poor return on investment. Instead, testing advanced AI-driven solutions now, while they’re still affordable, can give you the edge in creating tailored, impactful campaigns that deliver real results.
Privacy Concerns in Online Advertising
Privacy in online advertising is a hot topic, with issues like data collection, user surveillance, and behavioural targeting raising concerns about consumer trust. Many users turn to ad-blocking software or suffer from banner blindness to avoid intrusive ads.
Privacy regulations aim to address these worries, but challenges like malvertising, click fraud, and impression fraud persist. Dark money campaigns and native ads further complicate transparency, highlighting the need for ethical practices to build trust and safeguard user data.
In today’s world, data is so valuable that even global politics reflect its importance. For instance, the United States once banned TikTok, citing concerns over the Chinese company’s potential misuse of American user data.
If you’re operating in the European Union, the strict privacy regulations there make measuring ad performance even harder. To overcome these challenges, businesses can focus on building personal data bases tailored to their projects, ensuring compliance and fostering trust.
