You’ve likely heard the all-too-common dating advice, “Just put yourself out there.” If so, you might have been irritated—not because it’s wrong, but because it’s so obvious. You aren’t expecting to find the right person under your couch.
Likewise, business owners also need to actively promote their brands to connect with customers. Fortunately, business advice is a lot more specific. You can use online advertising to deliver targeted messages to your ideal customers and design campaigns around your specific needs and business goals.
Here’s how online advertising works, how it helps businesses, and seven popular types to incorporate into your marketing strategy.
What is online advertising?
Online advertising (also referred to as internet advertising, web advertising, or digital advertising) is an online marketing strategy that involves purchasing digital ad space and using it to promote your business. You can place online ads in emails, mobile applications, websites, social media platforms, and search engine results pages (SERPs).
Benefits of online advertising
- Increased brand awareness
- Improved ROI
- Advanced audience targeting
- Superior performance monitoring
- Increased sales
You can design your online advertising campaigns around your specific goals, advertising budget, and timelines. Here’s an overview of the benefits—and a few tips from marketing expert Nic Sharma’s Shopify Masters interview to help you integrate online ads into your digital marketing strategy:
Increased brand awareness
Running online ads is a quick way to raise brand awareness and boost website traffic volumes. While organic strategies like content marketing and social media marketing can take time to pay off, online advertising puts promotional messages in front of your target audiences right away.
Advertising spending can help you efficiently introduce a new brand to the world, drive awareness with specific customer groups, or get the word out about a new product or service.
Improved ROI
Online advertising tends to cost less than traditional advertising, and research shows that it delivers a stronger return on investment (ROI) than all traditional methods, except for direct mail.
Nic Sharma suggests using information learned from organic marketing campaigns to help you maximize ROI on your advertising spend.
“Paid advertising is just taking content and putting it in front of more people who you think are going to resonate with the content,” he said. “If you start with organic and validate what works, you’ve already got proof that there’s a good chance that’ll work when it comes to paid.”
Advanced audience targeting
Online advertising allows you to target users based on criteria like age, gender, geographic location, search history, social media activities, and previous engagement with your online store.
Targeted advertising focuses your ad spend on consumers who are likely to convert, which can boost ROI and sales. It can also improve personalization efforts, allowing you to create ads for specific consumer segments—like Lhasa apso dog breed owners or lactose-intolerant weightlifters—and serve them to the right people.
Superior performance monitoring
Unlike traditional ads, digital ads are highly trackable. Ecommerce sites, website analytics providers, and advertising platforms can report on metrics like total clicks, click-through rate (CTR), cost per impression (CPM), cost per click (CPC), total conversions, conversion rates, and ROI for individual ads or entire ad campaigns.
You can use this information to analyze campaign performance, adjust strategy, and optimize performance, says Nic.
“Looking at these metrics helps you understand and diagnose where you could be going wrong or what you need to fix,” he says. “Let’s say your CPM is low, and your click-through rate is high. That means the platform likes your ad, the people like your ad.”
Nic suggests evaluating these metrics alongside conversion rates to help improve sales.
“Now when they get to your site, there’s no add-to-carts. That means there’s some misalignment on the page they got to compared to what they thought they were getting to you for,” he adds.
In this case, you might rework site content, build a landing page, or direct ad traffic to a different URL on your site.
Increased sales
Online advertisements can support your customer acquisition efforts and encourage repeat purchases by keeping you top-of-mind. You can also use ads to send customers directly to the specific sections of your website, which can boost conversion rates and increase sales.
Nic suggests using landing pages to maximize conversions from online ad traffic, using a video ad that promotes a cooling cream for itchy feet as an example.
“The second you click the ad, you can go to a landing page that has that same creative or a shot from that video up at the hero,” he says. “It still talks about the consistency of itchy feet and then everything on the page sort of ladders back up to that North Star point of solving for itchy feet.”
Types of online advertising
- Search engine advertising
- Display advertising
- Email advertising
- Social media advertising
- Retargeting
- Native advertising
- Mobile advertising
There are many ways to advertise online—and one of the first steps in building an online advertising strategy is selecting methods that fit your goals. Here are seven common strategies to consider:
1. Search engine advertising
Search engine advertising involves bidding for the right to display targeted ads on SERPs. Although it’s sometimes referred to as search engine marketing, it’s a specific subset of this strategy. Search engine marketing includes both paid search advertising and organic ranking efforts, and search engine advertising is always paid.
Search ads are typically pay-per-click (PPC) ads, which means that advertisers pay for ad clicks, not ad space. Here’s how search engine pay-per-click advertising works:
1. Advertisers bid on specific keywords, indicating the maximum amount they’re willing to spend per click.
2. A user submits a search query containing one of those keywords.
3. The SERP displays ad content for the advertisers with the highest bids.
4. A user clicks on an ad.
5. The advertiser pays their specified bid amount for each click.
Search engine advertising can support visual or text-based ads, including product listing ads (PLAs). PLAs are ecommerce-specific ad formats that typically include a product image, price, and rating.
2. Display advertising
Display ads appear on other websites, such as online magazines or newspapers, entertainment sites, and blogs. They can include images, text, and video content. Popular formats include banner ads, sidebars, interstitial (full-screen) ads, video pre-roll ads, in-stream video ads, expanding ads, and pop-ups.
Businesses can purchase display ad space directly from website owners or from ad networks, which are businesses that purchase ad space from publishers and sell it to advertisers. Google Ads is one popular ad network. To run a display campaign, select “Display” as your Google Ads campaign type and purchase ad space from Google Display Network. Google Display campaigns support image, text, and video advertising.
🌟Google ads appear all across the internet—in search results, on websites, at the beginning of YouTube videos, and more. Learn how to run Google Ads campaigns on your own.
3. Email advertising
Email advertisements appear in a user’s email inbox. There are two main types: newsletter advertising and inbox advertising. Newsletter ads work a lot like display ads—except that instead of purchasing ad space on somebody else’s website, you’ll purchase space in an email marketing newsletter. A company that sells hand-blown glassware, for example, might purchase space in a popular lifestyle influencer’s weekly newsletter to get their product in front of potential customers.
Inbox ads are paid ads that appear in a user’s email inbox and mimic the look of a marketing email. When a user clicks the ad subject line, the ad content displays in an email format. Users interact with inbox ads like marketing emails—the only difference is that you don’t need to have a customer’s email address to serve them ad content. Email service providers also typically label inbox ad subject lines with “Sponsored” or “Ad” to distinguish them from other content types.
4. Social media advertising
Social media advertising involves purchasing ad space on a social media platform. Popular options include Instagram, Pinterest, LinkedIn, and Facebook ads. Formats, displays, and targeting options vary by platform. LinkedIn, for example, offers sponsored content, sponsored messages, text ads, and dynamic ads and includes targeting criteria like job title, skill set, job function, and industry.
5. Retargeting
Retargeting allows businesses to serve ads to users who have previously engaged with a company—by clicking the advertiser’s website or engaging with its social media content, for example. They’re the reason the pair of sneakers you looked at keeps showing up in your social media feeds and on The New York Times homepage.
Retargeting ads display on websites, SERPs, or social platforms. You can use them to stay top of mind with your existing client base and to encourage already-interested customers to convert.
6. Native advertising
Native ads mimic the look and feel of surrounding content. Examples include sponsored content, influencer marketing content, promoted online marketplace listings, inbox ads, and in-feed ads on social media platforms.
Research shows that integrating native ads into your marketing mix can boost brand awareness and favorability. Native formats can also evade ad blocker technology, which can boost campaign reach.
7. Mobile advertising
Mobile advertising involves displaying ads on mobile devices. Common types include in-app ads, mobile website ads, location-based ads, push ads, and SMS ads. More than 50% of web traffic comes from mobile devices, which means that mobile advertising can significantly increase campaign reach.
Mobile advertising also allows companies to use location-based marketing (LBM) and advertising strategies. If you own an online yarn store, for example, you might use location-based advertising to target visitors to popular brick-and-mortar competitors or regional knitting conventions.
Online advertising FAQ
What is the best type of online advertising?
The best online ad type for your business depends on your budget, goals, and target audience. An established ecommerce company might use search engine advertising to deliver targeted ads to customers who are ready to convert, while an emerging brand might focus on social media advertising and native advertising to build brand awareness.
How do you make an online advertisement?
To create an online ad, you need to first identify your target audience and understand where to find them. Next, set specific goals for your campaign, like increased brand awareness or more sales of your new product line. Choose an ad type and create compelling content to suit its specifications. Then, select an ad space vendor and submit your creative assets. To get the most out of your ad, track performance and tweak your ad accordingly.
How much does online advertising cost?
Online advertising campaigns are typically less expensive than comparable offline advertising efforts, but exact costs vary by channel, objective, and campaign parameters.
