Part 1: The basics of digital advertising

– Nov 2, 2021
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This is the first article in our two-part series on digital advertising that teaches you the fundamentals of digital advertising. Our next article builds on the below digital advertising lessons and provides a guide to create a killer digital ad.

WHY? The purpose of digitals ads

Digital advertising is a complex marketing medium that can waste a lot of your budget if it is not correctly executed. The below article breaks down the basics of digital advertising so you can better invest your marketing dollars into ads that perform.

Put simply, digital advertising allows companies to run targeted ad campaigns to effectively attract customers, generate leads and increase revenue. Some of the benefits of digital marketing are:

  • Generate brand awareness
  • Build brand reputation
  • Educate customers
  • Find new audiences (e.g. prospecting)
  • Remind customers about your product or service

Digital advertising can be a little intimidating. That’s why we’ve made this guide to help you navigate the process and maximize your results. Our guidance will ensure your digital ad campaigns complement other marketing activities such as lead nurturing and automation.

WHAT? Digital ad categories

There are two types of digital ads – Search and Display

Search uses customer intent to target ads to the right audience. For example, a user who searches Google for running tracks will be targeted with search ads for running shoe brands rather than food delivery services.

Display is a visual medium (social, native, banner, pop-up, etc.) that uses an individual’s segmentation and demographics information to target customers.

Search is more expensive, but usually yields higher returns because it targets customers who have expressed an interest in topics that relate to what you’re selling. Display is cheaper but is likely to generate less leads and conversions because the audience is typically at an early stage of the customer journey.

WHICH? Which digital ad should you choose?

There are two factors to consider when selecting a digital ad strategy: sales model and budget.

If you have a direct sales model (where you pay your sales team’s salary), then we recommend search ads. While Search is more expensive, it is more likely to generate quality leads. This means you are putting your sales team to good use and avoiding them spending time calling lower converting leads.

If you are running an ecommerce business, it is likely that you’re more interested in traffic and therefore will want to get as many people to your site as possible. We recommend you implement Display ads in this case.

While these delineations are helpful, ultimately the best strategy is to run a combination of Search and Display ads. Search allows you to capture customers that are actively looking to purchase your product or service, while Display ads ensure you stay front of mind. Remember, customers need to see a product several times before they recognize a brand and act on a purchase.

WHO? Targeting

Targeting is the big benefit of digital advertising. Traditional print or direct mail campaigns use an untargeted blanket distribution approach to reach as many people as possible, blindly hoping that the wide audience includes some target customers. Digital advertising lets you directly target your customer, therefore avoids spending money on customers that aren’t going to buy your product or service.

Below are several different targeting strategies you can use to reach your exact intended audience:

Keyword – Search ads target customers based on terms they use in their internet searches. To use keyword targeting, you identify specific terms associated with your ad. When any of these terms are used in a Google search, your ad will appear. For example, if you are selling running shoes, then your selected keywords might be athletics, running, running shoes, exercise, apparel, fitness, etc.

Remarketing – This strategy targets users who have previously visited your website with the intention of bringing them back.

Geographic – Audiences can be narrowed based on their geographic location. This strategy is often paired with interest targeting.

Interest – It is possible to target audiences who have frequently visited websites related to your product or service, and are therefore likely to be interested in what you sell. For example, you can target customers who frequently visit the Gourmet Traveller website with digital ads selling cooking equipment.

Email addresses – Businesses can target their current customer base with social media ads using either their customers’ email addresses or phone numbers.

Demographics – Demographics allow businesses to target audiences who match certain customer traits. These demographics could include income level, career, industry, gender, age, homeowner status, education and family status (both martial and children). An example of this in practice is targeting baby products to parents with young children.

HOW MUCH? Digital advertising costs

Digital ad costs are dynamic because they use a market and popularity-based auction model. You will be billed for digital ads based on clicks, conversion or impressions.

Here is an overview of the different billing models you may encounter:

Clicks – You will be billed based on the cost per click (CPC). This is when a user ‘clicks’ on the ad and is directed to your selected landing page, website, form, etc. This billing approach is most common for Search ads.

Conversions – You will be billed based on cost per acquisition (CPA). The cost is accrued when someone clicks on your ad and completes the desired goal e.g. purchases a product from your website. This approach can be used for either Display or Search ads.

Impressions – You will be billed based on the number of times the ad is shown to one thousand people, otherwise known as cost per thousand (CPT). This approach is most common for Display ads.

The who, what, which and how of digital ads should give you a strong foundation to create highly targeted and successful campaigns. Look out for our next article in the series that will combine all of the above lessons into a clear guide that you can use to create a killer digital ad.

Contact us to discuss implementing a new digital marketing program or improving your existing digital marketing efforts.

The who, what, which and how of digital ads should give you a strong foundation to create highly targeted and successful campaigns. Look out for our next article in the series that will combine all of the above lessons into a clear guide that you can use to create a killer digital ad.

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