Go to Top

What is Online Advertising? A Beginners Guide


With so much of the world spending a vast amount of time surfing the World Wide Web, promoting your business with online advertising is a great way to bring in a large customer base with minimal effort. This method of marketing is effective for businesses of many different sizes, but can be especially beneficial for small business with fewer funds available to put toward advertising. However, if you have never delved into the world of online advertising, you may be at a complete loss of where to even begin. Below is a guide to introduce you to some of the ins and outs of advertising your business online, starting from the very beginning.

Pay Attention to Your Customers

Time and money are two of the biggest assets your company can have, and they should be used effectively in order to get the most out of your online marketing. Advertising is most successful when a strategic plan has been put in place, and this starts with hearing from your customers. Ask your current clientele how they heard about your company, and what drew them to you. What do your customers deem valuable and important? The answers to these questions will help you create a foundation for your marketing strategy.

Have a Blueprint

Advertising online has one main goal, which is to promote your business on another website, in order to direct traffic to your website. Once a consumer has visited your website, you want to call them to action, whether that is to purchase a product or service, or otherwise become involved with your business. To use online advertising in an effective way, it is important to start with a plan. Think of your business’s marketing strategy as the blueprint to a house. You would not start building a house without a blueprint, and you should not begin online advertising without a plan. This begins mainly with investment budgeting. The money spent on marketing should be driven by the profit you are bringing in. Create a budget for your online advertising, and as your company and profits grow, you can revisit this budget to make adjustments as needed.


Get Customers to Your Website

It does not matter how much money you spend on online marketing, if no one is visiting your website to check out your business, you will not make any profit from your advertising endeavors. You want to use your advertising to find future paying customers while avoiding web traffic that does not build revenue. What kind of customers are you trying to acquire through your online advertising? What type of advertising are these customers most likely to positively react to? These questions will drive your decision on the type of online advertising to use to promote your business.

Track Your Marketing

It is incredibly important to track your advertising method’s success. This will help you identify if your goal is being achieved with your current plan of action, or if your blueprint needs to be revised to better meet your needs. Your success can be tracked by looking at several different figures. The first of these is the CTR metrics, or your ad’s click through rate. This number represents the ratio of online users that click on a link to your website to the total number of users that view the email you have sent or the page on which your ad appears. Another figure to pay attention to in your goal tracking is your cost per click (also known as pay per click or PPC). In certain forms of advertising, you will pay the website on which your ad appears a fixed cost for every time a user clicks on your advertisement while visiting their site. Keeping track of this cost will give you an idea of how much of the traffic to your website is gained through your online advertising tactics.


Online Advertising Options

There are four main types of online advertising, which will be explored below. The goal of online advertising is to create profit while spending less money than you would on traditional marketing. Advertising can be risky, because if it is ineffective, you will lose money instead of making money as you originally planned. Online marketing tactics vary in risk, with some platforms posing little to no risk at all. This is an added benefit to advertising online. Below are the four types of online advertising, from most risky to least.

1. Display Advertising

Display advertising is the most risky form of advertising, as it is most likely to end in a loss of profit. This strategy is most similar to offline advertising, as you pay a fixed cost to have your banner ad displayed on a website for a predetermined amount of time. This is also the most ineffective form of online advertising. You take on all of the risk, and the website on which you have placed your ad is completely unaffected by the failure or success. In fact, this form of online advertising is usually not any more effective than its offline counterpart. However, there are times when this type of advertising is worth its risk, such as if the company’s site on which you are advertising shares the same consumer base as your company. Also, you may not have any other options for advertising on a particular company’s website. If you are absolutely sure that your display advertising will work and bring in high-quality customers, this method has the potential to be an effective option for your company.

2. Cost Per Impression (CPI) / Cost Per Mile (CPM)

Cost per impression advertising, or CPM, requires you to take slightly less of a risk than display advertising. Instead of paying a website to display your ad for a fixed amount of time, you pay for the number of individual times your ad will be displayed on their webpage. This is usually paid for in multiples of thousands, or “miles”. This method is more effective than display advertising because if less people see your ad than the company promised, you are not losing money for the time when your ad was not viewed.


3. Cost Per Click (CPC)

At the end of the day, cost per click or CPC advertising threatens little to no risk and becomes essentially free advertising. This is because you only pay for the number of times users actually click on your ad to visit your website. This form of advertising is a basic in most marketing strategies as it pays for itself. This is how advertisements work on search engines like Bing and Google, as well as Facebook Ads and Twitter promotions. The only risk involved in CPC advertising is that you cannot guarantee that a click on your ad will turn into an inquiry or sale.


4. Affiliate Marketing

The final form of advertising wipes out even the risk that is involved with cost per click advertising. This method of marketing only costs your business money if it is successful. Your ad is placed on a website for free, like cost per click. However, you do not pay for clicks on your ad. The only time you pay the website on which you have an ad is when consumers that were referred to your site from the original website either buys your product or fulfills your predetermined goal. This means that you are only paying for the advertising that is completely successful, and only that. The website that hosts your ad then receives a certain percentage of commission on the sales from the buyers that clicked on your ad on their website.


Using Social Media

The great thing about social media platforms is that it is completely free to create an account for your company. This is a completely free way of getting your business’s name out there with absolutely no risk factors. There are many websites to choose from, such as Facebook, Twitter, Instagram, YouTube, and many more. The first step in creating a social media is to analyze your consumer base and determine which social media platforms they use the most. Are your customers spending a good amount of time on Facebook? Consider creating a Facebook page for your business. Do they hang out on Twitter? Start tweeting about your business. Social media is a great way to interact with your customers in a risk-free environment for your business and a low-pressure environment for your potential customers.


Put Your Plan Into Action

Once you have chosen the type of online advertising that best meets both your needs and budget, it is time to put your marketing plan into action. This is where all of your plans come together to bring consumers to your website and ultimately increase your company’s revenue. Your foundation has been built, you have people in place to maintain your goal tracking, and you are bringing in a wider customer base with your advertising. As your goals are tracked, you can tweak your advertising to become more successful. This is called campaign management, and it will ensure that your advertising efforts are not done in vain. Even if your company is just opening itself up to the world of online marketing, you are sure to see gains by following these tips.


Article by Joe Forte, founder and CEO of Marketing Forte, a digital marketing agency in Phoenix, AZ.

, , , , , , ,