How Does Online Advertising Works?

Have you ever wonder why is online advertising is so popular nowadays?

Everyone keeps saying that every business needs to be online.

In this article, we will help you to answer this:

  1. How is online advertising is different from other types of advertising?
  2. Why is online advertising important for YOUR business.
  3. How does it work?

Imagine Dan owns a small business called Denim Duds for Dudes, or DD4D for short. Everything he sells is denim, even his shoe collection.

To promote DD4D, Dan has an idea for a print ad that looks like it’s made out of denim. Once the design is complete, he spends a good amount of his marketing budget buying a full-page ad in the local newspaper.

When he opens up the Sunday paper and sees his ad in all its glory, he’s excited. He’s pretty sure this will help DD4D drum up new customers. But, can he really be confident that this ad is working?

The ability to track your ads’ performance is just one of the reasons why online advertising can be a valuable tool for small businesses.

Online advertising also offers a lot of flexibility and can help you reach a variety of business goals – whether you want to sell more products, get potential customers to contact you, or achieve something else altogether.

With online advertising, you have power over:

Customization– Tweak your ads to help them reach the right audiences

Search Term Selection – Choose which search terms you want your ad to show up for.

Localization – Target your ad to specific geographic areas.

Cost – Adjust how much you are spending on clicks and views at any time.

You can take steps to make sure your online advertising is set up for success. We’ll show you how to target specific customers, be found by people searching for your products or services, set your budget, and measure your ad’s success and value.

First, let’s look at how you can use online advertising to target specific groups of customers.

If you want to reach customers who are, for example, active online during certain time periods, make sure your online ads only run at those time.

You can also target your ads to reach people who live in specific geographies or speak certain languages.

Another targeting strategy is to think about where your ads should appear: in search results, on websites, or a mixture of both. Think about who your ideal customers are and where you can best reach them.

Let’s say Dan only wants to reach customers who live near DD4D, and he wants his ads to encourage customers to call his store when it’s actually open and there’s someone available to help them.

He can make sure his ads only appear on local websites and in search results for people nearby. He can also show ads with DD4D’s phone number during open hours, and then show ads without the phone number after hours.

Along with targeting certain customer groups, you can use online search ads to be found by people searching your products or services.

You’ve probably already seen search ads while doing your own searches on platforms like Google or Bing. Whenever you search using certain words or questions, you’ll see organic results as well as the paid result (AKA online ads).

paid search ads

When people do searches using terms related to your products or services, you want your ads to show up. To make sure this happens, choose the search words, or keywords.

You can use tools like Google Trends to create a keyword list.

Google trends

You can also check your business website’s analytics page to see which search terms are sending the most traffic to your site.

For example, Dan at DD4D might see that the search terms “jeans” and “menswear” send him the most traffic, so he adds them to his keyword list.

Some ad platforms let you show ads on websites that have content related to what you sell. In this scenario, Dan might buy online ad space on men’s fashion blogs.

Once you have a good idea of who you’re targeting and how you’re going to be found, start setting your budget.

How much money you spend on online advertising depends on your overarching marketing plan, and whether or not most of your potential customers find you online or through more traditional forms of advertising.

Some tools like AdWords Express can give you a recommend budget based on the average click volume for your business type and location.

After you figure out your online budget, choose how much you want to spend each day. The good news is you can only pay when people click on your ads. And, you can change budget whenever you want.

Why would you need to adjust how much you’re spending per click? If you start noticing that clicks from certain customer groups are more valuable than others, you’ll want to spend more money targeting those groups.

This leads us to our final point: Online advertising makes it easy to evaluate clicks and measure the success and value of your ads.

Most ad platforms track and report on the clicks on your ads. While a lot of clicks can be a good thing, some clicks are more valuable than others.

Clicks that result in customers taking desired actions are the types of clicks you want. Depending on your goals, that might mean click-throughs that result in sales, app downloads, newsletter sign-ups, etc.

Once you have accessed your clicks and know what’s working harder for your business, you can readjust your budget and focus on the best performing types of ads.