Paid advertising is any kind of advertising that you have to pay for, versus owned or earned advertising.
With paid advertising, marketers pay the owner of ad space in exchange for use of that space. The price paid for the ad space is often settled through a bidding process between marketers and the ad space owner.
There are several categories, including pay-per-click (PPC), pay-per-impression (PPI), and display ads. Why is paid advertising important in marketing?
Efficient marketing campaigns capitalize on all channels for advertising. Although paid advertising costs more than owned or earned advertising, paid forms are an effective way to expose your company’s name to a large audience.
Paid ads are usually displayed to users on the sides, tops, or bottoms of web pages. Marketers can pay more to have their ads featured on more popular websites to increase traffic.
The different categories of paid ads — PPC, PPI, and display ads — allow marketers to further customize their campaigns. The growing popularity of social media has recently turned sites such as Facebook and LinkedIn into effective platforms for paid ads.
A display ad, also known as a banner ad, is a form of online paid advertising that is typically a designed image or a photo and copy. Viewers can then click on the image with the promotion to then be taken to the corresponding landing page.
Display ads function differently than text ads because they aren’t found in search results. They can be spotted on websites and can feature interactive displays or some type of animation to engage the user.
Retargeting can also be used for these ads. For example, on ecommerce or shopping site a user may place something in his or her cart and then leave the site without purchasing. Ads can then be used to advertise exactly what that user placed in his or her cart to get them to complete the purchase that they left before.
What is the role of a display ad in marketing?
Display ads can be a main component in a marketer’s paid advertising campaigns. Developing click-worthy images help directs a viewer to a landing page with relevant content about the brand or company.
These ads not only can increase brand awareness, but they can engage or re-engage visitors to your marketing in order to help filter the visitor into your funnel to become a lead.
Cost Per Impression
Cost per impression (CPM) is the measured of cost that one will pay when their ad is shown per one thousand impressions. CPM helps to determine other calculations for ads such as CPC (cost per click) and the CTR (click-through rate).
A digital advertiser will bid on the cost cost per (one thousand) impressions before the actual ad is shown. These bids will help to determine if the ad is shown before other ads or it’s overall rank in placement.
Why is cost per impression important to marketers?
With any ad campaign, CPM is a vital metric to monitor to find out how effective your ad is.
Cost per impression can help marketers prove return on investment (ROI) for the campaign and potentially your cost per lead.
Brand loyalty is the tendency of consumers to continuously purchase one brand’s products over another. Consumer behavior patterns demonstrate that consumers will continue to buy products from a company that has fostered a trusting relationship.
Loyalty is extremely beneficial to businesses as it leads to repeat purchases by consumers, higher revenues, and customer referrals.
Why is brand loyalty important?
Having a loyal customer base can help a business push past its competitors and give it the competitive advantage it needs to succeed in the marketplace.
Companies with strong brand loyalty will see its customers repeatedly buy its products or services, regardless of changes in price or convenience. Frequent purchasers of one company’s product are less likely to be swayed by the marketing messages of competitors, thus increasing the chances that those customers will continue to conduct business with the that company.
In addition to having higher sales than those without brand loyalty, companies that have successfully established a loyal following can enjoy a growing customer base as well. Loyal customers have the potential to turn into open advocates and brand ambassadors for a company. Satisfaction with a business will drive them to spread brand awareness and refer new customers, effectively providing a company with costless advertising.
A great method for nurturing brand loyalty is having a rewards program. Many companies entice customers to make a purchase by offering points or a similar object to be redeemed for prizes and awards.
ROI (Return on Investment)
ROI (return on investment) is a measurement of the value that an investment provides. It is the return you gain relative to the price of the initial investment.
ROI is calculated with the following formula: (Gain from investment – cost of investment) divided by the total cost of the investment.Why is ROI (return on investment) important?
Return on investment is considered one of the most important measurement metrics in determining the success of a company’s marketing campaign. Using this return, businesses can get an idea of how effective they are at structuring paid advertising campaigns.
Paying a small amount of money for advertisements or keywords, and having them generate a lot of conversions or website traffic, means that those advertisements or keywords have a high return. On the contrary, if you pay a high price when bidding on keywords or ad space, and they are not performing well, then those have a low return.
ROI generally denotes the profitability of an investment, but it can be used to measure different things depending on what a marketer considers to be the costs and the returns. Return on investment can be a measurement of success in order to determine if you should continue to move forward with a paid advertising campaign.
Market segmentation is the process of dividing a market of potential customers into groups, or segments, based on different characteristics. The segments created are composed of consumers who will respond similarly to marketing strategies and who share traits such as similar interests, needs, or locations.Why is market segmentation important for marketers?
Market segmentation makes it easier for marketers to personalize their marketing campaigns.
By arranging their company’s target market into segmented groups, rather than targeting each potential customer individually, marketers can be more efficient with their time, money, and other resources than if they were targeting consumers on an individual level. Grouping similar consumers together allows marketers to target specific audiences in a cost effective manner.
Market segmentation also reduces the risk of an unsuccessful or ineffective marketing campaign. When marketers divide a market based on key characteristics and personalize their strategies based on that information, there is a much higher chance of success than if they were to create a generic campaign and try to implement it across all segments.
Marketers can also us segmentation to prioritize their target audiences. If segmentation shows that some consumers would be more likely to buy a product than others, marketers can better allocate their attention and resources.
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