Online advertising

The advancement of information technology and the widespread use of digital technologies have opened new marketing avenues for marketers. Traditional marketing channels are fast becoming somewhat obsolete, and new channels, such as online advertising, are becoming a common practice in marketing. This article explains the meaning, application, and pros and cons of online advertising. 

Online advertising Online advertising

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Table of contents

    Online Advertising Meaning

    In the 90s, nobody could have believed that technological advancement would lead to so many new opportunities. Many fields have tried to avail these opportunities, and marketing is no different. The process of obtaining information for purchasing has completely changed for consumers; there is now so much information online.

    Mobile devices like smartphones, tablets, etc., have allowed people to access information anytime via the Internet. Online advertising has become an increasingly important tool for companies to market their products/services on these devices. As a result, companies are allocating more funds for online advertising.

    Online advertising refers to the marketing message delivered and seen via the Internet on search engines, websites, social media, and mobile devices.

    online advertising searching online information StudySmarterFig. 1 - Searching for information online

    Online advertising is gaining more scope with time and has become an integral part of the marketing mix. It accounts for a majority of advertising revenues for companies like Google. Google's advertising revenue in 2021 reached $209 billion, and a majority of it came from search advertising – a form of online advertising.1

    Features of Online Advertising

    Online advertising has many features that make it a viable and effective advertising option. Companies can easily track their performance through metrics.

    Performance assessment – The performance of online advertising can be easily measured and assessed. The conversions, engagement, and cost figures allow marketers to gauge the effectiveness of the advertising campaign.

    Low-priced budget – It is an affordable way of advertising compared to traditional methods such as television advertising. To gain more leads by spending less money, marketers need to research extensively for online advertising. For instance, using the right keywords and getting the SEO correct.

    Flexibility – It offers more flexibility than other types of advertising. Marketers can pause the campaign and adjust it to gain better results. It is not true for traditional advertising methods such as outdoor advertising or print advertising.

    Results can be reported – Online advertising provides easier ways of reporting the results. No matter how many websites and social media platforms the campaigns run on, online advertising can instantly give clear and reportable results. Marketers can take action based on these reports and improve the performance of advertising campaigns.

    No wait required – With online advertising, the results appear instantly. Marketers create these ads, and in no time, they can see them live on the search engine or website. It makes the whole process quick and effective.

    Types of Online Advertising

    There are many online advertising types, and some important ones are discussed below. Marketers could run campaigns on any one or simultaneously across all these types of online advertising.

    Content marketing – It generates organic traffic for a website through SEO – search engine optimization. It is used to deliver a message to the target audience. Another way to promote content is through paid advertising. Companies pay others to feature their content on relevant websites.

    Search Engine Optimization (SEO) is a tool through which the visibility of content can be increased on the search engine, i.e., Google, without having to pay for it.

    Social media marketing – Marketing done through social media platforms is called social media marketing. Facebook, Twitter, Instagram, etc., are all examples of social media platforms. These sites have analytical tools that help marketers track the marketing campaigns' performance.

    Display ads – These ads appear on third-party websites and are often related to the information being viewed. These ads are engaging and prompt users to seek information about them. These ads have evolved rapidly; marketers now use rich media ads for advertising. Videos, sound, animation, and rich text are used for such ads.

    Mobile advertising – Advertisement appearing on smartphones and tablets is called mobile advertising. It is done through mobile apps, text messaging, and push notifications. It aims to get users to click and purchase a product/service.

    Online Advertising Methods

    The methods used for online advertising depend on the campaign's goal and budget. Some of the standard methods are explained here.

    Online advertising: Search Engine Optimization (SEO)

    Search Engine Optimization (SEO) is an organic way (unpaid) to advertise a website on search engines. It incorporates keywords related to the product/services offered on the advertiser's website. Whenever users enter those keywords, they can see the website's link of the advertiser on the list of options.

    SEO requires comprehensive research about the keyword's potential. Marketers analyze the search patterns of users and competitors to find strong keywords. Original content with the target keywords is published on the website to improve its ranking on search engines.

    Check out our explanation of SEO Marketing to learn more.

    Online advertising: Search Engine Marketing (SEM)

    Search Engine Marketing (SEM) is a paid form of marketing used to increase a website's visibility on search engines. It is also known as pay-per-click (PPC). When a user searches a keyword such as "sneakers" on Google, it will show many results, and the top searches are the sponsored ones. Marketers can use products such as Google Ads to place ads in Google search results.

    SEM works on a bidding system, i.e., companies having similar keywords pay for these ads and compete against each other. If your bid is higher than your competitors, your website's rank will appear at the top of the list on Google. Every time a user clicks on the link, she must pay the bidding amount. Therefore, advertisers do not have to worry about wasting money. It is also quicker than SEO and could generate leads in no time. SEO and SEM could be used together to gain better results.

    Online advertising analytics StudySmarterFig. 2 - Online advertising analytics

    Online advertising: Web layout

    The design of the website is also essential in turning impressions into conversions. Once you have directed the target audience to your website, you must show them the exact information they need. A well-designed website could prolong the stay of visitors and could end up leading to more sales.

    Amazon's website has an excellent layout and navigation. When you search for a specific product, it shows you all details about the product as well as related items. Once you complete a purchase, you can go directly to the check-out page or continue shopping for more items. Amazon designs its eCommerce site so you know what to do at any time.

    Online advertising: Emails

    Email marketing is an early form of online advertising, but it is still a very effective advertising tool these days. Emails allow marketers to reach the target audience individually. They can provide information about new features and products or contain promotional messages to nudge the readers toward action.

    Netflix uses email marketing to significant effect. It sends personalized emails to its users to keep them engaged. It uses this channel to give its users a sense of belonging.

    Online Advertising Advantages and Disadvantages

    Online advertising has given numerous advantages to marketers. However, there are some disadvantages of online advertising. Let's look at it from both sides.

    Advantages

    • Targeted campaigns Online advertising helps marketers implement targeted campaigns. They can filter the audience based on location, preferences, and traits. This helps them attract the target audience.

    • Cost efficient Online advertising is cost-efficient as compared to offline advertising. Businesses save money as it is more targeted, hence fewer chances to waste resources.

    • Wide reach Online advertising offers more reach to businesses. They can target multiple locations/regions at the same time.

    • More control Online advertising provides more control over marketing campaigns. In online advertising, the metrics help marketers track performance and improve future campaigns.

    Disadvantages

    • Difficulty getting data – Getting meaningful data for online advertising is difficult. Many users prefer to keep their browsing history private and do not want to share it with anyone.

    • Limited space for ads – There is limited space available online for marketers to advertise the message. Therefore, the message needs to be concise and compelling to be of value.

    • Users avoid ad clicks – Many users hate seeing ads on websites and social media. They use ad-block apps and extensions to remove ads. Users want to access the desired content without clicking on unnecessary links.

    • Click cheat – There is a problem with click cheats, especially in PPC (pay-per-click), where advertisers pay when users click on the links. Competitors could use this to their advantage and click on the links to increase the advertising bill without meaningful conversions.

    Online advertising - Key takeaways

    • The accessibility of fast Internet, coupled with smartphones, tablets, etc., has enabled consumers to spend more time online.
    • Online advertising refers to the marketing message delivered and seen via the Internet on search engines, websites, social media, and mobile devices.
    • Online advertising has many features that make it a viable and effective advertising option.
    • SEM and SEO both increase the ranking of websites on search engines. The difference is SEM is paid, and SEO is unpaid and content based.
    • SEO, SEM, web layout, and emails are the methods used for online advertising.

    References

    1. Statista Research Department. Google: advertising revenue from 2001 to 2021. 2022. https://www.statista.com/statistics/266249/advertising-revenue-of-google/.
    Frequently Asked Questions about Online advertising

    What are the three types of online advertising? 

    Content marketing, social media marketing, and display ads are the three types of online advertising. 

    What are the features of online advertising? 

    Performance assessment, flexibility, and reportable results are some of the features of online advertising. 

    What is an online advertising method? 

    Search Engine Optimization (SEO)  is an online advertising method. 

    What are the disadvantages of online advertising? 

    Click cheat, limited ad space, and difficulty getting data are the disadvantages of online advertising.

    What is online advertising? 

    Online advertising refers to the marketing message delivered and seen via the internet on search engines, websites, social media, and mobile devices. 

    Test your knowledge with multiple choice flashcards

    Which one of the following is considered a digital technology? 

    Companies are spending more money on online advertising because it gives better and faster results than old ways of advertising. 

    The performance of online advertising can be easily measured and assessed. 

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