Internet Advertising has revolutionized the way we market our business in the last 10-15 years. As Advertising traditionally reserved for companies with a large advertising budget. Whom could afford the high cost of distribution for Media on TV, Radio, Billboards, Signage and Print. Yet year over year, statistics have demonstrated that advertising budgets are shifting in their allocation. Moving away from the traditional advertising systems. While traditional advertising systems still have there place, there is no question that budgets are being reduced in that area and increased on the Web.
When discussing the Internet Advertising systems, this includes reference to the Pay per click (PPC) and Affiliate Advertising methods. The main topic of discussion in this article will be the PPC advertising system. Since today, it is the most popular and by general consensus considered the most effective.
Some of the reasons for the success of Internet Advertising over traditional advertising are listed below :
Flexibility in Budget : Traditional advertising was thought to be very expensive. And often could be unaffordable for medium and small businesses. However the new Internet Advertising systems allow for affordability on some level for businesses. Providing a varied range and scope with low, medium and high budgets.
Advanced Tracking and Demographics : One of the challenges of the traditional advertising systems is the inability to track down which methods produced the best results. Like all things computerized, the Internet advertising model allows for greater precision and measurability. Giving a better cope of what advertising networks produce the best results for your campaign. As well, Internet Advertising has greater potential in reaching your target market. (Discussed further later in this article when outlining the benefits of Facebook advertisements).
More people are Searching / Shopping online : Internet phobia is reducing. As today, often any shopping for a product or service begins with research on the Internet. Whether your product or service is Business to Business (B2B) or Business to Consumer (B2C).
Acknowledging the growth Internet Advertising, often the question occurs which particular Internet Advertising systems are beneficial for your business. Which can be answered first by determining whether the PPC method or the Affiliate Advertisement route is favorable for your business model.
How do PPC and Affiliate Advertising differ?
The two major categories of Internet Advertising are listed below:
Affiliate Advertisement : An Affiliate advertisement often can be seen when visiting a website which a banner ad is displayed at the top or the bottom of the website. Affiliate advertisements are paid on the basis of how many times a significant action has occurred, such as how often a Sale or Lead is generated. Affiliate advertisements are designed that once the user visits the site from the ad, the advertiser is only committed to pay if the consumer purchased the product after seeing the ad. Alternatively the Affiliate advertisement can also be setup for other concrete measurable actions, such as a lead being generated. Which the landing page of the ad is setup for the user to fill out their information as a potential lead. Which the sales team may follow up with that lead at another point
The benefit of Affiliate advertising is that you are only paying on the basis of your bottom line results. Therefore if the traffic numbers you receive in response to the ad are strong, but the actual sale of the product is weak, the Advertiser is not committed to pay.
Ultimately Affiliate ads are more difficult to setup and often requires someone with a fair degree of technical knowledge to setup the tracking code. And it’s a less popular choice since many website publishers choose not to take the risk of have an advertisers ad show 1000 times in a day and not being paid anything. (Which is more favorable for the advertiser, but not the website publisher).
Affiliate Advertisements share greater popularity with E-commerce stores. Since it is easier to measure the concrete trigger for the payout based on on-line sales. Most of the Affiliate Advertising systems work with similar systems with some variations in back end management. So recommendations will be limited in this article to some reputable companies such as Dark Blue, Commission Junction and Neverblue. With the main purpose of this article to investigate the PPC systems, due to the greater popularity and equality.
PPC Advertising (Pay per click Advertising) : The way the PPC advertising system works is by selecting the trigger action for your ads. In search engines like Google, Yahoo and Bing, it often is the specific keyword combinations that trigger your advertisement. For example. when the user to types in “home renovation toronto” in the Search Engines, your advertisements appears on the top and side margins of the Search Engine results. For social networks like Facebook or LinkedIn, it may include other triggers. Such that if the user of the given social network is of a certain age, the advertisement would be displayed (Since enrolling in a Social network likes Facebook or LinkedIn users often include this personal information).
Once your trigger is defined, you then select your monthly budget. Your monthly budget determines the ceiling in which you do not wish for your bill to go above. Advertising networks like Google Adsense and Facebook start at $31 per month. So your advertising budget can range from the minimum rate to thousands of dollars per month, depending on what you can afford. However the higher monthly budget gives greater leverage.
Next you select what the range you are willing to pay for each time someone clicks on your ad for your selected trigger. (Ie. how much you are willing to pay when someone clicks on your ad after typing in “home renovation toronto” in Google). The higher monthly budget will allow you to use more aggressive bidding ranges for what you are willing to pay per click. Providing you with a wider spread per click.
Based on the bidding ranges you enter, you ads appear in a given frequency. Where during certain days and times of day the bidding ranges are more competitive. And certain triggers or keyword combinations are more expensive based on their demand. Which the more aggressive bidder would appear more frequently. Although it is possible for the advertiser with a $31 budget to appear on the 1st page of Google when compared to the $100 budget per month (During certain times of day). Yet the frequency of the ads being displayed with the smaller budget will be less.
The beauty of the Pay per click system is you are only obligated to pay when someone actually clicks on your advertisement. Therefore you are paying based on the given response and not on how many times your ads shows up. This is drastically different from the traditional advertising systems such as Print, Radio or Television, which you are essentially paying for how many times your advertisement is displayed. Giving limited accountability for the Advertising media to how responsive people are to your ad.
Which PPC Advertising system to choose.
Choosing the right PPC advertising Network can be a daunting task. It it all depends on who you are trying to target and how you are trying to target your audience. Whether you are looking to use a push / pull marketing strategy. Or if your product or services are B2B or B2C. Below are some of the advantages of the different advertising networks with their respective Pro and Cons.
Google Adsense Advertising
Description : The Google Adsense is by far the most popular advertising system on the Internet today. And lead to the revolution in the advertising world, proving that Internet Advertising can be effective. As often other advertising networks look to model the success of the Google Adsense program. The Google adsense program is mainly triggered when users are performing google searches and ads rank favorably in the top and right margins. However, the Google Adsense program also includes the Google Partner program. Which looks similar to an Affiliate ads system in appearance. In when a given user is visiting a website, a banner advertisement may be shown somewhere on the top or side of the website. Or while a user is watching a Youtube video an advertisement may appear at the bottom. Which the Partner program ad is triggered by keywords on the page. Therefore if the user is reading an article on Do-it-yourself home renovation, the banner ad promoting home renovation would be displayed. And the advertiser would only be obligated to pay if the user clicked on the ad.
Pros : Google by far is the predominant search engine today in the Internet World. And is only continuing to grow in popularity, as it’s the most frequently visited website in the world. Making a fair portion of most Internet advertising budgets allocated towards the Google Adsense program. As it is an effective ‘Pull’ Strategy for users that are researching for a product / service in your related field. Google is continues to be a pioneer in the Advertising world by being quick to implement new features. And always looking for better ways to improve the quality of its system for both advertisers and users.
Cons : Being the most popular Internet advertising system out there, it often is the most expensive in the cost per click. Since the cost per click is based on the law of supply and demand. And the demand for favorable placement on Google is high. Also Google has a strict quality control team. Which they can have some unforgiving policies of banning or suspending advertisers that do not follow their guidelines. That can be considered a plus, however some well meaning advertisers may get burnt in the process.
Yahoo / Bing Advertisments
Description : When web users can’t find what they are looking for on Google, they often go to search engine like Yahoo and Bing next.In 2010, Yahoo and Bing have now merged there advertising system in order to remain a competitive force with Google. However Yahoo / Bing advertisements mirror the Google Advertising system very closely working on similar principals of showing ads when keyword searches are typed in. As well, Yahoo and Bing have a partner program which mirrors Google.
Pros : Based on the law of supply and demand, Yahoo / Bing ads can have a lower cost per click. And it can be argued, the quality of the lead does not change, whether the web user found your website through Google or Yahoo. It may in fact increase the quality of the lead since the web viewer is taking time to throughly search for a good respective partner.
Cons : Often Yahoo / Bings ads look like the “me too” little brother of Google. In which they replicate the Google Adsense program so closely, they can be appear to be the copycat. Also, the gap between people searching on Google and other search engines seems to only be growing every day.
Description : Facebook is one of the greatest threats to the Google Adsense system. Which will continue to develop and be more significant as time goes on. Since Facebook is the 2nd most visited website in the world. But exceeds Google in the amount of time people spend on the website and how frequently they visit per day. Facebook advertising is displayed when a Facebook users is on the site and a banner ad is displayed on the sidebar. Unknown to some, this banner ad is targeting the specific demographic of the user profile.
Pros : Part of the process of being involved in Facebook is to enter your personal information such as your Date of Birth, Profession, Interest and Activities. Facebook is able to target ads based on your personal information. Which provides massive leverage as a marketing system. At the time of this article (November 2010), Facebook ads are relatively inexpensive on a cost per click basis when compared to Google. Making it much more affordable for most businesses of all sizes. In addition, it provides greater brand awareness, even if your ads are not being clicked on that often. Since the ads are graphical, it repeats the imagery of your brand, impressing it subconsciously into the mind of the consumer.
Cons : Facebook ads is still a work in progress. Although the rate of progress is occurring at a very fast rate to be in competition with Google. Yet it’s still not at the same level of sophistication as the Google Adsense program. However in years to come, the gap of sophistication between Google Adsense and Facebook ads will most likely reduced.
Description : LinkedIn is the most popular professional social network to date. In which professionals go online to meet other professionals. LinkedIn can be considered Facebook with a suit and tie. Where you often channel people whom you do not wish to reveal details of your personal life. With the millions of users on LinkedIn, it’s a significant network to take into account.
Pros : Almost every profile on LinkedIn includes the users current profession and professional history (Which not everyone on Facebook includes this information). LinkedIn has a foothold of this information. By allowing ads to show only to people in specific professions or industries. Which makes it one of the best potential Business to Business advertising networks (If not the only viable one at the moment). Therefore you can target your ads to the specific decision maker for your potential customers, if they categorize in a specific profession(Such as the CEO, VP of Finance, HR manager, Professional Purchaser, Creative Director or Customer Service manager)
Cons : As of today, the LinkedIn advertising system is still within it’s Beta stages(Test software). And it lags behind in terms of sophistication with its reporting tools when compared to Facebook, Yahoo and Google. And when compared to a social network like Facebook, people don’t spend as much time on LinkedIn as they do on Facebook. Since the air of formality doesn’t lend for the same level addictiveness as Facebook.
So is Internet Advertising right for you?
Especially during these challenging economic times, marketers are looking for more effective alternatives. With the range of Internet Advertising networks to choose from, the ability to reach your potential customer continues to grow. Especially with the future of developing Internet Advertising systems like LinkedIn and Facebook. Yet today, many businesses have found great success with the older systems like the Google Adsense program. As Internet Advertising has proven to be a effective method for promoting business and will only increase in importance. So Internet Advertising is here to stay and not going anywhere but up!