Digital advertising is evolving as quickly as the technology and online trends it lives. It’s no longer just a description for banner ads randomly located on various websites – instead, it stands for a number of categories such as Facebook ads, Instagram ads, animated banners, SEO, email marketing and many more. Digital ads are now more diversified than ever and therefore it is essential for marketers, agencies and small business owners to master the art of advertising online and fully understand all of its aspects.
In this article we will:
- Introduce types of digital ads and basic principles across the network
- Give tips on achieving higher digital marketing ROI
- Cover the topic of digital marketing budget
Although there is no universal magic recipe for a business to succeed in digital advertising, understanding the basics of the aforementioned topics can surely bring every business person closer to achieving their marketing goals – grabbing target audience’s attention, increasing marketing ROI and optimizing advertising expenses.
Types of digital ads
Understanding the notion of a digital ad and its basic types is the first step to properly face the challenge of advertising online. There are numerous forms of digital ads such as banner ads, Facebook ads, Instagram ads, YouTube ads, AdSense, Pop Up ads, or pre-video ads. Although all of them can play an important role in the digital marketing strategy, we will cover three most popular ones – display, Facebook, and Instagram ads, presenting their definitions, explaining how they work and suggesting when and how to use them.
Display advertising is a form of online advertising which happens through the use of banners, i.e. advertisements displayed into a web page.
First of them was created in 1994 by Wired Magazine and it started a revolution in online content creation. It said “Have you ever clicked your mouse right here? You will” which perfectly shows the function of banner ads which is taking a visitor from the host website to any other site chosen by the advertiser. First banner’s creators saw it is as a public announcement informing visitors that they can see something located somewhere else in the Internet than they were at the time.
Banner ads consist of an image in one of the following formats: .jpg, .png, .gif or a multimedia object and other elements such as text and logo. They can be either static (acting like a clickable ad), or animated (delivered by an ad server) and they aim either to generate traffic to a website by linking to it, or to inform, notify about a new product and increase brand awareness. Being clicked is usually their primary function.
They show up when a visitor is engaging in social media, researching certain information or watching videos online. Unless you have never turned off your ad blocker, you know their main weakness – they happen to annoy target customers and disrupt what they are occupied with on the website. This happens mostly when they are irrelevant, or when they slow down the website. However, well designed and placed banner ads can considerably contribute to building brand awareness, generating leads (e.g. a software company can use them to make more users sign up and try their product) and make it possible to retarget the audience. Whenever a user visits a website and leaves immediately – you can target them again with banner ads on another site.
Great, so we have a basic idea of what banner ads are. However, having an ad is only a small part of success – you have to place it somewhere. There are two ways to publish this type of ads – contacting websites directly or choosing an advertising network that assists companies with distribution. Most of the networks have their standards, so it is essential to check them before you create the ad. Some of the popular advertising networks are for example Google Adwords, AppNexus, Criteo and AdRoll. They make ads appear on many different websites with less effort for the company standing behind them. However, they do not allow you to build deeper relationships with loyal customers which is possible when you contact websites directly and enter a long-term cooperation. Banner ads are usually located in high traffic websites that can offer engaging content that users look at. It is generally said that one should advertise on the websites which are the industry’s niche, because this ensures that visitors match the banner’s target audience.
Before creating any banner ad, it is essential that you:
- Understand the main purpose of the whole campaign and plan its budget
- Choose the target audience and address their particular needs
- Decide on relevant websites on which you place the ad (otherwise company pays a lot for poor performance)
- Determine the action that an ad will make visitors perform (click on a website, buy something, try a service, etc.) and a destination where the ad will take visitors (home page, product page, promotional page)
- Formulate the value proposition and set a good CTA button
Once you have your plan in place and you are ready to create ads, you should:
- Remember to choose a standard banner size
- Use legible fonts and good quality photos
- Employ appropriate brand colors – it makes an ad look professional and leads to higher recognition in the Internet
- Keep it as simple as possible to effectively communicate your message
- Remember to put a logo, company name or a website to show a user who is behind the ad
With more than 2.2 billion users, Facebook has become one of the most important marketing platforms both for small businesses and for the giants. However, as both its algorithms and trends constantly change, it is extremely challenging to succeed in organic engagement with target customers. This is where Facebook ads appear to help – so let us explain briefly how to be able to make use of it and gain the best results.
Facebook ads can be targeted with extreme precision.
They employ micro-targeting features which make it possible for your brand to be seen by your exact target audience – and this is why you should be so excited about them! You can personalize your marketing efforts according to demographics, interests or location of your audience and optimize on your budget by paying to reach the most promising potential customers.
There are many types of Facebook ads: photo ads, video ads, carousels (up to 10 photos or videos), slideshow ads, collection ads, instant experience ads, lead ads, dynamic ads and Messenger ads. In order to be able to place any of them online, your company needs to have a Facebook business page, as it allows to use Facebook Ads Manager to run a campaign.
Facebook Ads Manager requires you to make several choices in order to run an ad. These are: determining the campaign objective aligned with your business goals, naming the campaign, deciding whether to use A/B Test and setting the point of focus (e.g. post engagement or page likes). You are also asked to choose a specific target audience, as well as ad placements which can be either automatic or customized. What is the difference? While customized ad placement lets you decide where the ads will be located, in automatic ad placement the whole decision-making process is conducted independently by the platform. Note that these placements go beyond Facebook itself and include also Instagram and Messenger. Budget on Facebook is set either on a daily basis or as an overall value that your company is ready to spend.
There are many details regarding Facebook ad specs and it is often one of the most challenging aspects, as the requirements tend to change often and the platform automatically cuts off text exceeding the limits. Therefore, complying with their rules is essential to make your ads look professional – and be approved in the first place.
When creating a Facebook ad, you should:
- Try out different audience settings – from a very narrow to a broader one, including different factors such as interests to find out which one performs the best
- Make use of Facebook Pixel
- Use only high quality photos and videos – using photos showing people using the product is better than showing only the product
- Test, test, test. As all of the requirements are changing, results may also be changing – and you can constantly optimize your ads
Although significantly younger than banners and not as widely known as Facebook ads, Instagram with 800m active users is rocking the scene of digital advertising.
It can help you achieve what seems to be impossible to get – the attention of users exposed to thousands of brands every single day. As much as 60% of users say that they get to know about new product on Instagram, so if your business still has not started an Instagram ad campaign – you should definitely consider it promptly.
Usually brands use Instagram ads to increase brand exposure and website traffic, as well as address leads – both new and existing (i.e. move them down their marketing funnel). What you should consider is the relevance of Instagram for your business. As it attracts young users living mostly in urban areas, you should not invest in advertising on the platform unless it fits in your target audience characteristics. The demographics data used by Instagram is the one created by Facebook which makes it a valuable source and a powerful tool.
The steps you take to create an Instagram ad through Facebook Ad Manager are simple and mostly aligned with those described in the Facebook Ads section of this article. There are various types of Instagram ads such as: image feed ads, image story ads, video feed ads, video story ads and carousel feed ads.
Before creating an Instagram ad, one should:
- Make sure the platform suits the brand’s target audience
- As previously mentioned, have a Facebook business account open – so that you can use Facebook Ad Manager to run Instagram ads
When creating an Instagram ad, one should:
- Keep in mind that Instagram is a visual platform and focuses mainly on images and videos
- Humanize the content to entertain users
- Maximize ad’s context relevance
- Use proper hashtags and avoid those which are too widely spread
- Make sure the ad is posted at optimal time
But… how to be noticed?
Although it is true that the number of advertisements users are bombarded with every day creates the impression that no ad can actually grab anyone’s attention, don’t surrender – there are still ways to do it! Use the golden rules for particular platforms which are described above not to invest in ads that would bring sub-par results and be never noticed.
We believe that the principles that apply to digital advertising are not very different from those that apply to any other type of advertising. Of course, digitalization has revolutionized the way ads function and there are additional aspects that one should focus on when advertising online, but the very core of consumers’ minds has not changed, and they react to ads in similar ways. Attention-grabbers share very close characteristics, because we look at the ads with the same eyes – whether it be on a screen or in print.
According to 5 key principles of ad creation, it is important to engage people and always try to gain their interest. Otherwise, consumers (in this case online users) effortlessly skip the message, regarding it as an unwanted interruption. A good ad is not enough – it needs to be well placed. In case of banner ads, attention should be paid to choosing websites (according to their traffic and audiences); in case of Facebook and Instagram ads, one should carefully determine the right target audience. There must be a good reason for the ad and, as many people base their purchase and brand loyalty on emotional reasons, it is a good practice to focus on emotions that the ad brings about. The marketing funnel is a long way for potential customers to go through, so the exposure should be frequent enough for them to notice the brand – but not too frequent as to annoy your audience. Advertising efforts should be coordinated across different channels, both digital and non-digital, so that the brand looks consistent in consumers’ eyes.
Cost of digital ads
We have answered the main question of what digital advertising is, presented the main types of digital ads and explained what they are about, as well as how to approach the ad creation process. However, probably one big question appears in your mind as you get deeper into the topic – how much will it cost my company?
Let’s cover the topic of advertising cost on the platforms that we described above – Google AdWords, Facebook and Instagram. Google AdWords helps businesses create text and banner ads and display them either next to Google search results or on various websites (those which are part of Google AdSense network). Before we present any numbers, it is important to understand the main three ways of calculating the cost of a digital ad:
- PPC (Pay Per Click) – the most popular form; the advertiser pays for every click made on an ad which makes keywords crucial in this model
- CPA (Cost Per Action) – the advertiser pays the publisher only if someone clicks and successfully completes a transaction
- CPM (Cost Per Mille) or CPT (Cost Per Thousand) – the advertiser pays for exposure which is based on how many people visited the website and looked at an ad
PPC is a form used by Google’s search network, because it is designed for ads which have a high relevance to the search query. If you’re looking to bring highly qualified traffic to your landing page, you naturally do not want to pay advertising dollars for exposure to the wrong crowd. CPA is used when the final goal are online transactions or sales and the advertiser does not want to pay for every click – because this is not what they want to achieve through a campaign. CPM fits best to raising brand awareness through exposing potential customers to the ad with high frequency.
The average CPC in Google AdWords is $2.32 in keyword searches and $0.58 in Google Display Network, with legal industry being the most expensive one (an average CPC of $5.88) and e-commerce and travel & hospitality being relatively cheaper at $0.88 and $1.55 relatively. Although big businesses spend millions in yearly online advertising costs, bidding on less expensive keywords (probably suiting your business niche) result in lower costs.
The second platform that was described above is Facebook – the most popular paid social platform which should not be omitted from your business digital strategy. Their pricing model shares several similarities with Google. While creating a campaign on Facebook, you are asked to determine your budget (both daily and maximum bids). The bids make it possible for advertisers to have a control on how much they spend on particular actions, such as signing up for a product trial and match it to their daily budgets. To make it more straightforward, these costs can be translated into CPCs. The average CPC in Facebook ads is $1.72 which makes it a relatively cheaper. The same rule applies to CPA which is significantly more affordable on Facebook than AdWords. Therefore, advertising on Facebook is a good choice not only for giants, but also for small companies with very limited budgets.
Finally, Instagram Ads cost work in a way that is similar to Facebook – as they are a part of the Facebook network. This makes it easier to advertise on both of the platforms, because learning process gets shorter. Instagram is based mainly on visuals, so CPM is the main model used on the platform - and the costs are growing, getting closer to the advertising costs on Facebook. With the growing popularity of Instagram, its CPMs are currently reaching $10. However, advertisers need to understand that not only costs are growing, but also the possible engagement we can get from including Instagram in our overall marketing strategy.
About marketing ROI, but briefly
Knowing the average prices, you should start thinking how to optimize your digital ad spending in order to take the most out of your digital strategy. But how to understand whether the money is well spent? Marketing ROI comes here to help.
Marketing ROI is used to measure the return on investment from the overall marketing spending of a company.
It can either regard a single campaign, or all of the marketing efforts combined. Marketing ROI can help businesses justify their marketing expenses and explain to high executives why it is so important to invest in this area. It also makes it easier to decide where to allocate the money and assess whether your company does it better – or the competitors. Many companies start with an initial risk tolerance and available capital to facilitate investment decisions. However, the main difficulty with Marketing ROI is deciding on the time span. Every marketer knows that all of the sales do not appear after one week of a campaign – the actual full benefits of marketing efforts become visible after a long-term effort, meaning couple of months to a year. Moreover, sometimes several soft metrics need to be added to the ROI itself to express factors that might bring sales in the future such as brand awareness expressed through the number of likes.
In order to gain higher ROI, marketers should focus on the following points:
- Make your campaign shareable – think of the impact that the ads can make and assess whether they are likely to go viral
- Combine digital and non-digital character in the ads (e.g. create content offline and place it online)
- Pay close attention to analytics – learn how to monitor your campaigns and ad performance closely in order to be ready to react, e.g. measure the click-through rate (CTR) or your banner ad
- Channel the financial inputs to more profitable audiences
- Respond to negative reactions and clicks decreases
It is recommended to combine applying these approaches with a strategy of lowering digital ad expenses to raise the Marketing ROI.
CPC in AdWords can be decreased thanks to publishing highly relevant ads. Other more specific ways to lower Google AdWords costs are ad scheduling, geotargeting and device targeting. The simplest way to control your expenses on Facebook is to choose settings that best fit your company’s strategy. Moreover, maximum bids can keep you from spending the whole daily budget on one big bid. Targeting options described above bring higher ROI as the ads are shown only to visitors who are most interested in your product or service. When it comes to Instagram, it is essential to omit most expensive demographics and instead retarget people that have visited your profile before. Each ad published on Instagram should look natural and be linked to a professional landing page so that the investment is used effectively. It is generally a good practice to stop investing in campaigns that are performing poorly and promptly move the investment to an ad that drives better results. Therefore, publishing more than one ad, targeting them to small audiences and comparing which works best for your company is the right strategy to implement. Usually the best performing advertisement becomes the primary campaign used on a platform.
Keeping in mind how to use keywords effectively and optimize on their costs, your business can achieve a great ROI. It is important to understand that Google AdWords are not exclusively designed for big brands with millions in their marketing budget, but even small companies can benefit a lot from incorporating Google AdWords in their advertising efforts. The same happens with Facebook and Instagram – it is more a matter of understanding how all these platforms function and learn how to optimize costs and drive higher returns on investment.
Digital ads are an increasingly vast topic and it is nearly impossible to cover all the details in one article. However, understanding the main idea, principles across the network, budgeting and marketing ROI basics is crucial for every business in order to start or improve their online advertising. Still, the biggest challenge is probably the ad creation process itself. Advertising on Facebook, Instagram and with banners using poor quality visuals will not bring good results but might lead to losing a lot of money invested. Although creating advertisements by yourself is a difficult process, it has been made easier thanks to new solutions appearing online. These novelties can not only help small businesses cope with digital ads, but also facilitate the way agencies work. Don’t wait any longer, discover the world of digital advertising yourself.
Creating effective digital ads is not only a matter of good visuals. It is also a matter of understanding the audience, along with its needs and preferences. Therefore, a great ad can't be a subjective creation of a designer, expressing his personal tastes and artistic vision - these characteristics make it rather a graphic art, not graphic design. Read more about the topic here.