In the world of business, advertising and marketing play a crucial part in a company’s success. You might have a great product or service, but without the ability to show it off to other people, it may as well not exist.
Since the dawn of the internet, online advertising has changed the marketing industry forever. No longer are adverts restricted to static pictures on billboards and newspapers.
Instead, adverts can now be customised to appeal to individuals on a much more personal level, targeting their location and specific likes. With the ability to laser target individuals based on their interests, this has greatly increased the effectiveness of online advertising methods.
If you’re venturing into the world of online advertising, then you’ve probably stumbled across paid advertising. As expected, not everything in life is free and sometimes, if you want good results, you have to spend a bit of money. For new and small businesses, this can often be a tough situation, especially when you have no experience with paid advertising.
What exactly is it? And is it worth your money? Why should you pay for something when in most cases you can always get it for free?
These might be questions you’re asking yourself, and you’d be right to do so! Spending money on paid advertisements is a big decision for every business, and most need to be 100% certain they are doing the right thing.
To help you make the right decision and to see if paid ads are for you, we’re taking detailed look at paid advertising and how useful it is.
Pay close attention, this could be one of the best decisions you make for your business.
What Is Paid Advertising?
Main Types of Paid Advertisements
Paid advertising comes in many different forms online. The main categories include:
- Pay per click
- Pay per install
- Pay per view
- Pay per download
- Pay per acquisition
- Display ads
- Video ads
As you can see, there is a range of different paid advertising options available with some being more effective than others. The most common method of paid advertising by far is pay per click. This type of advertising was made popular by networks such as Google Ads, which allows businesses to pay per click they receive on their ad.
Compared to other advertising models, such as pay per view, this can often save businesses a lot of money.
In addition to pay per click, there are also a lot of other less popular models of paid advertisements including pay per download, install, and acquisition. Picking the right method can sometimes be tricky due to the fact that different paid advertising models perform better in specific industries.
For example, if you have a landing page that converts at 10%, and you drive 100 monthly visitors to it, you would expect 10 people to sign up. Now if the cost per click was $1 you would be spending $100 per month which would equate to $10 per conversion. If you could switch your paid advertising model to cost per acquisition and get it down to less than $10, then you’d be better off.
The same applies to other models of pay per view and pay per click. If you’re paying $1 per click but have a really high click-through rate of 30%+ then you might be better to switch to the pay per view model.
Since most views cost less than 1 cent you could be getting a lot more clicks on your ad for around the same price.
How Does It Differ From Other Methods?
Although paid ads are a great way to get your product and service in front of potential customers, it’s not the only way. There are also plenty of other online advertising methods – known as organic advertising – which don’t involve businesses paying for every click or lead they receive.
If you’ve been in digital marketing long enough, then you’ve probably heard of the term search engine optimisation. This type of marketing involves building up your website’s authority so Google views it as important. In return, an authoritative website receives higher rankings and therefore, more traffic.
With this type of marketing, you aren’t paying directly for the traffic on a cost per user basis. Instead, you are investing a fixed fee in the hope that your website’s traffic increases and so do your conversions.
As you’ve probably worked out by now, search engine optimisation isn’t always guaranteed, and there’s no knowing how high you’ll rank. For low competition keywords, it might be fairly easy to reach the top spot after a few months of work. However, for harder keywords, it can take years of optimisation. So the question becomes: do you have the time and money to spend on months of SEO with no results?
Compare this to paid advertising, and the results are almost instantaneous. Instead of waiting for months to see your traffic increase, you can see a boost within the first hour of starting your campaign. This means you can quickly establish if you’re spending the money on the right advertising channel without having to wait months.
Why Should You Use Paid Ads?
Now you understand a bit about paid advertising and it’s benefits, why should you use it over other methods of advertising?
The first and most obvious reason why is what we mentioned before, the results are almost instantaneous. All you need to do is create an ad and set your bid, and you’re good to go.
Your advert will start being displayed within minutes and you should notice an increase in your traffic. Other methods of advertising both online and offline take a long time to kick it which can be very stressful for some businesses.
Another great reason to use paid advertising is that it that it’s not as expensive as you think. Although it’s true that some keywords can cost tens of dollars per click, there are luckily millions upon millions of keywords out there. This means you don’t need to focus on the expensive ones.
Instead, you can target 100 cheap keywords and get just as much traffic as the big ones. This allows almost any business to experience the power of paid advertising.
Increase Your Ads ROI
Paid advertising might be an excellent advertising solution for many businesses, but you always need to be aware of your ROI. If you’re spending $1000 a month to make $10, then it’s probably not worth it and should look at ways you can decrease your cost per conversion. The most obvious way to do this is to get rid of underperforming keywords and adverts that cost you money but don’t convert very well.
There is, however, another way to improve your ROI without lowering your cost per click. Currently, 1 in 4 ad clicks are fraudulent. This means you could be wasting up to 25% of your Google Ads budget on fraudulent clicks. Not only does this increase your cost per conversion, but it also harms your ROI.
To increase your return and stop fraudsters from clicking your ads, you need protection. Sign up to Lunio for a free 14-day trial to see how much money you can save.
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