Online advertising can be mysterious for some; we know its important, people tell us its important, but when we advertise online where does our money actually go to? We demystify the mysteries of online advertising in plain-english, identifying the 3 core areas which where your marketing dollars go to.
Online advertisements are most commonly shown on specific websites (Advertisement placements) or when the user conducts a search on a search engine (Search Marketing). Because advertisements online are extremely targeted, segmentation by time of day, age range, specific interests and geographic area, you will not waste your advertising budget on any unqualified audiences.
Online marketing is very much like advertising in traditional media, like an ad in the newspapers an online advertisement can take many forms the most common 3 are contextual (text only ads), banner ads (ads with moving graphics ), or video ads (just like TV).
So now that you understand a little more about online advertisements, we can start to show you where your money is used online.
Search engines are paid
Contextual and search marketing all depend on the user’s search, each time a user clicks your advertisements on search engines you would have to pay the CPC (cost-per-click) value of that advertisement. This CPC value can range anywhere from $0.50 to $20.00 for more brand-specific keywords. So you actually pay these search engines for advertising space like how you would pay a newspaper.
Search engine marketing requires persistent monitoring and optimization, keyword bidding is a delicate process and can sometimes be a difficult concept to grasp, more on that later on.
Placement websites are paid
When you advertise on a website, the site owners have to be paid. Essentially you are using their online traffic to advertise your business’ products. Online placements advertisements are highly in demand because your brand becomes associated with the website’s reputation. Online placements include advertising on newspaper and magazine websites. Having an advertisement on NYTimes.com is always more effective and cost efficient than placing an advertisement in the physical newspaper, New York Times.
Search engines are paid again
Over 70% of all advertisements, both search engine related and placement related funnel though search engines. Expect your marketing dollars to be funnled to the various different search engines again, indirectly of course. But eventually the search engines are the main medium to help you get more clients and will have you increase your brand awareness.
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Now you have a clearer idea of where your advertising dollars go to when marketing your business online, what is more difficult than managing your online budget is to plan a sound strategy to extend your brand awareness and establish lasting relationships with customers online.
If you need any help with your online marketing strategy or if you just want to say hi, send us an email so we can help you grow your business.
Nicholas Lin is a consultant at Async Minds, a fast growing marketing and interactive online firm.