Ads are everywhere. When you log into your browser, open an application or search on Google. When you are checking social media, you are seeing advertisements. Ads entice, remind and encourage us to purchase. But, what is their purpose? How many types and online advertising models are? Let’s explore.
What Is an Ad?
An advertisement (advert or ad) is a piece of communication used to promote a brand with the goal to attract the audience’s interest, engagement, and sales. Advertisements come in many formats, audio, print, billboards, copy, and digital.
Unlike other types of marketing efforts, advertisements are paid and give advertisers control over the content and the message. Adverts are a sure method of reaching your audience. If you create an engaging ad and publish it via the right channel, your ad can immediately impact business.
What Is Online Advertising?
Online advertising is a marketing strategy that uses the Internet to deliver marketing messages to customers. Online advertising is also known as digital advertising.
These ads appear in web browsers, search engine page results, social media, mobile devices, or emails. There are a number of reasons clever advertisers use this format for reaching consumers:
- It is less expensive than traditional advertising.
- It reaches a wider pool of potential customers.
- Tracking and measuring the performance of the ads is easier.
- It offers better personalization.
Global advertising spending (any media) has been increasing since 2010. In 2020, the Internet was the most important medium for over half of advertisers. Online advertising has been growing unstopped since its start, and it is expected to reach $645 billion in 2024.
The Online Advertising Landscape
If anytime you click on an image in a search result that turns out to be an ad, you are experiencing one of the biggest trends in digital advertising now, contextual advertising. Ads now are relevant and targeted; ads are content.
The online advertising landscape is changing, with new platforms, ad types, and targeting capabilities, like Amazon. Still, Google and Facebook have the largest share of U.S digital ad spending, with 37% and 19.6%.
Online advertising helps consumers with their purchasing decisions. According to a study, 90% of consumers check online reviews before purchasing something.
Ad Types and Formats
1. Google search ads
Google search ads are online ads that appear in the search engine result page when users search a query on Google. These ads work under a pay-per-click model, in which advertisers pay for each time a unique user clicks on an ad. To start with Google search ads, you need to create a Google ads account.
2. Adword ads
Adwords are similar to google search ads but created within the Google AdWords advertising platform. Google Ads also operates under a PPC (pay-per-click) model. Marketers set a specific keyword target on Google Ads and bid on the keywords. They compete with others also targeting the keyword. The bids the advertiser makes are the maximum bid they are willing to pay for an ad. If the maximum bid is higher than the cost per click, the advertiser gets the ad placement.
3. PPC ads
Pay-per-click ads are called that because the cost of advertising is determined by the number of clicks the ad receives. BingAds and Adwords use a pay-per-click model.
4. Bing ads
Bing ads are the Microsoft alternative to an ad network. That means you can reach every user on the Microsoft network. They are similar to Google ads in that they work on a pay-per-click basis. Advertisers can manage their ads through the Bing Ads service. If you want to get started with Bing ads, you need to get a Bing Ads account.
Instream ads are placed pre-roll, mid-roll, or post-roll in a video that the user is watching. The key with instream ads is to make them the most relevant to the content the user is consuming. An outstream ad is a video ad integrated into a piece of content, like an article or a blog post.
5. Banner ads
Banner ads are visual advertisements, consisting of an image or text. They can be animated or static. These ads range widely in terms of size, format, and function. Banner ads appear in websites, applications, blogs, in almost every digital property. Publishers use ad exchanges, ad networks and SSP to sell their inventory. Some publishers negotiate directly with advertisers.
6. Display ads
Display ads are a type of contextual banner ads used in an ad network such as Google Display Network. For instance, the Google Display Network includes all Google properties such as YouTube, Gmail, Blogger and more. To serve online ads on a display network, you need to sign up to the network.
7. Retargeting ads
Retargeting is the process of taking into account the viewer’s history, and interests. For example, Jane is looking for handbags but doesn’t finish her purchase. Next time, when she’s browsing a news website, she will see an ad for the same handbag she wanted. It is a reminder geared to encourage a purchase.
8. Flash ads
Flash ads are animated ads that use Flash. They are often interactive to drive users to action. While it is still used in some ads, it is being phased out.
9. Mobile ads
These appear on smartphones, tablets, and any other mobile device. Social media platforms, websites, and apps offer mobile ads. Ad networks usually offer mobile advertising.
10. In-game ads
In-game ads are adverts within computers of video games. For example, the billboards appearing in video sports games. In-game ads also appear like cars, clothing or other gaming perks.
11. Email ads
Email ads appear and are delivered via webmail. Usually, as part of an email strategy, they appear as part of the email. Email ads are particularly bold and catchy to capture the user’s attention and maximize the chances of conversion.
12. Video ads
Video ads are increasingly popular as it is easier than ever to watch videos on the Internet. The best video ads don’t look like a hard sell but are informational. Humor, education and tutorials are the most popular formats.
Advertising models
Advertising models can be divided into 4 categories:
1. Display advertising
Display advertising consists of small digital billboards (banners) placed around blog posts, search result pages, websites or apps. Display ads can be static or animated. They are a good way to tell a visual story quickly.
2. Video advertising
Video ads are a very popular type of advertising today. Video advertising enables you to tell a story, transmit the company values, and give information that you cannot do with a static image. Video ads can be in-stream or outstream.
Instream ads are placed pre-roll, mid-roll, or post-roll in a video that the user is watching. The key with instream ads is to make them the most relevant to the content the user is consuming. An outstream ad is a video ad integrated into a piece of content, like an article or a blog post.
3. Mobile advertising
Mobile ads make sense in the current marketing landscape. As most people are on their phones consuming content all the time, it is just logical to optimize the ads for mobile consumption. Mobile ads can be of multiple formats, including video, pp, display, search, or social ads. Video-based social media mobile ads are the most popular formats.
4. Native advertising
This advertising is different from other types because they are non-disruptive and usually includes sponsored content. Unlike pop-ups or auto-play videos, native ads blend into the content so it doesn’t interrupt the user experience. Native ads can also come in multiple formats, blog posts, videos, and images.
Ad networks, SSP, DSP, Ad Exchange
When you start with online advertising, all the acronyms can confuse you. Let’s go over one by one:
Ad networks
These platforms act as intermediaries for publishers and advertisers. Most networks integrate a software development kit (SDK) that deploys advertisement upon request. Ad networks are often organized in a way that prioritizes impressions for different networks. More ad networks are implementing a real-time bidding environment.
SSP
A supply-side platform is a software used to manage and sell publishers’ ad inventories. The platform connects with ad networks and demand-side platforms. SSPs help publishers sell their inventory to the right bidders. Publishers upload their inventory of ad placements to the SSP. The platform connects with ad networks and demand-side platforms. When an SSP throws the impressions into ad exchanges, the DSP analyzes and purchases them for the advertisers.
DSP
A demand-side platform is a software that allows an advertiser to buy advertising automatically. The advertiser sets up targeting and budget for their campaigns. Once the ad is uploaded, the DSP scans the inventory and finds the publisher that fits the advertiser’s criteria. The DSP automatically resolves the bid, places the ad and manages the payment to the publisher, all in the time that it takes to load a page.
Ad Exchange
Ad exchanges are online marketplaces where publishers and advertisers can buy or sell ad inventory. Supply and demand-side platforms use programmatic advertising to resolve bids in the time it gets to load a page.
Types of Online Advertising
1. Paid search
When a user searches online, they look for something specific. Therefore, when the first result seems helpful, they will click on it. Companies sometimes wonder why they should advertise if they appear already in search results. Search ads improve the reach of your target audience n more:
- A business that advertises digitally has more revenue than one who doesn’t.
- Organizations that advertise are able to protect their branded terms from competitors.
- Search ads appear before the search results in search engines.
Search ads enable you to target the wants and needs of your potential customers. Google factors the keywords people use and matches your ad with those queries. Each ad group targets a small set of keywords, and the search engine displays your ads based on it.
Let’s say Jane wants to go on a hike and is looking for hiking boots. So, she goes into Google and types “best hiking boots for women”. Therefore, she’s going to see results for advertisers that are targeting keywords like “hiking boots for women” and “hiking boots”.
Ads can be text or images too. Before the text ads, the search engine shows image ads.
As you see, the ads appear right in position zero of the page. Why did these ads appear right away? Because search engines consider the user intent when choosing the ads to display. In this case, search ads were the most useful. If instead, you will be looking for a location, you’ll see “promoted pins” on the map.
How do you choose your keywords? Keywords can be branded or not branded. A brand keywords includes the brand’s name. Non-brand keywords don’t include the brand’s name or its variations.
2. Native advertising
Popular publishers like The Dodo produce viral content every day, and they help other brands to do it too. Brands pay these publishers to create and distribute posts to their audience with the hope of going viral. This method is called native advertising.
Native advertising doesn’t disrupt the audience’s browsing experience but enhances it. This type of advertising creates a relationship between publishers and brands. Publishers get another source of revenue, and advertisers reach their audience in a natural way, while they are looking for content related to the keywords.
3. Social media advertising
Social media networks don’t stop growing. As of 2021, Facebook — the leading social media network — has 2.895 billion monthly active users. Instagram is not far with over a billion users, same for TikTok. We all use social media to connect with friends, have news updates, for business, and for shopping. The high number of users in social media makes social advertising attractive for businesses.
Advertising in social media has many advantages:
- You can target specific audiences based on their interests.
- Leverage multiple ad formats.
- Implement specific offers and advertising campaigns that help you achieve your business goals.
Facebook, YouTube and Instagram are the most used social platforms. You can use their wide reach to find an audience for almost any type of business.
4. Display advertising
Advertisers have been using display ads for over two decades. While display ads had a bit of an intrusive reputation in the beginning, in recent years, display advertising technology evolved and ad networks can offer more effective targeting strategies and more relevant ads, by using machine learning and data analytics.
Difference between online and traditional advertising
The main difference between digital marketing and traditional advertising is the medium marketers use to reach the audience. Traditional marketing uses print, radio, and TV, while digital marketing uses the Internet to deliver its marketing messages. Traditional marketing is still important, and there are things that digital experience cannot provide. The feeling of a glossy magazine and the immersion of a TV commercial are hard to replicate.
Digital marketing has the advantage of being able to reach the user from many touch points. Since users are online most of the day, digital marketing weaves marketing communication into digital channels.
FAQ’s
1. What is programmatic advertising?
Programmatic advertising is a marketing method and technology that enables the automated buying and selling of online advertising. Marketers use targeting tactics to segment audiences based on data. This enables advertisers to only pay for the ads effectively delivered to the right user at the right time.
2. How do I choose the right ad network?
- Check what your competitors are doing, which networks are running on the websites your audience uses.
- Once you have a network in mind, evaluate it. Check its size, the quality and format of them, what placements they offer.
- Check the compensation model.
- See that the network offers ad management and support.
3. Which online ads are most effective?
Display and contextual ads are the most effective. Display ads increase purchases by 5%.
4. How effective are online ads?
Online paid ads are a great way to increase traffic and conversions faster than other marketing tactics like SEO. Especially combined with programmatic advertising, it provides a quick (though not that easy) way to increase sales.
5. What makes a good online ad?
There are five principles of a successful ad:
- Understand the purpose of the ad: the ad should help solve a marketing problem and align with business goals.
- Define a plan of action for the ad:the game plan for the campaign and each ad are defined in the media plan. The messaging should be consistent and allow you to target specific demographics.
- Create an enticing call to action: it should be visually attractive, easy to understand and compel the user to act.
- Optimize for mobile: with most mobile searches resulting in action in a day, you cannot afford to be out of mobile devices.
- Focus on the audience:it is never about your company or the product, and always about your customer.
6. What is programmatic advertising?
Programmatic advertising is a marketing method and technology that enables the automated buying and selling of online advertising. Marketers use targeting tactics to segment audiences based on data. This enables advertisers to only pay for the ads effectively delivered to the right user at the right time.
7. How do I choose the right ad network?
- Check what your competitors are doing, which networks are running on the websites your audience uses.
- Once you have a network in mind, evaluate it. Check its size, the quality and format of them, what placements they offer.
- Check the compensation model.
- See that the network offers ad management and support.
8. Which online ads are most effective?
Display and contextual ads are the most effective. Display ads increase purchases by 5%.
9. How effective are online ads?
Online paid ads are a great way to increase traffic and conversions faster than other marketing tactics like SEO. Especially combined with programmatic advertising, it provides a quick (though not that easy) way to increase sales.
10. What makes a good online ad?
There are five principles of a successful ad:
- Understand the purpose of the ad: the ad should help solve a marketing problem and align with business goals.
- Define a plan of action for the ad:the game plan for the campaign and each ad are defined in the media plan. The messaging should be consistent and allow you to target specific demographics.
- Create an enticing call to action: it should be visually attractive, easy to understand and compel the user to act.
- Optimize for mobile: with most mobile searches resulting in action in a day, you cannot afford to be out of mobile devices.
- Focus on the audience:it is never about your company or the product, and always about your customer.
What type of ads can you find in CodeFuel, and how do they increase conversions?
CodeFuel is an all-in-one platform for monetizing digital properties. We leverage multiple ad formats, for mobile and desktop devices. With CodeFuel, you can enhance the user experience through shopping and search ads, and news feed. Our contextual approach enables us to deliver highly targeted, intent-based adverts that align perfectly with the interests and intent of your user. Thus, enhancing your user experience and increasing conversions.
