Is online advertising more than a fad?   

In the US and the UK about one in every four or five advertising dollars is now spent on line. Forbes predicts on-line spending will pass TV spending by 2016. So the global business consensus is clearly  pro-online.

Is it just for big business?  

No. Compared say with TV, on-line actually advantages smaller advertisers.

Is it just for business?

No. Not for profits and other information providers and opinion influencers need to go where the public discussion is, and increasingly that’s online – especially if the talk-back radio demographic is not for you.

Go where the buyers are

Most purchase decisions can be traced back as a chain of events with 5, 10 or more critical steps, eg:

1.    Someone says something about a product or service.
2.    You read something about it somewhere.
3.    You see someone using a similar product or service.
4.    You have a discussion with a friend about the product or service.
5.    You see and ad.
6.    You decide you might want to buy the product or service.
7.    You ask your friends on Facebook if they’ve ever bought it or used it.
8.    You have a look at their website.
9.    You hear an ad offering a special discount or bonus.
10.    You go to the store and buy.

If the astute store owner asks this new customer, “How did you hear about us?” the customer will probably answer, “I heard you’re ad on the radio.” But if you consider the chain above, it’s clear this is a simplistic answer. Many factors have influenced the purchase journey.

Research across several industries is now reporting that a website or other on-line search is a key part of the purchase process up to 90% of the time. Even people walking into bricks and mortar stores to buy very old-style products are most likely to have reviewed their options on line first.

This is called pre-shopping, it’s how people decide which products to buy and which stores to walk into to find them.

The internet step is now probably the most common part of the decision chain, the one that most people use close to purchase, and thus the point at which buyers are most concentrated.  That’s why sellers need to be there.

What are the options?

Most online money is spent on search engines but advertising on social media sites is the growth area. Video ads are also growing.

The options most people consider are:

•    Pay per Click (PPC) such as Google’s Adwords or Facebook ads.
•    Pay Per View (PPV) such as banner ads or video ads.
•    Paid directories.
•    Advertising on related traffic websites.
•    Advertising in apps on mobile devices.
•    Off-line advertising that encourages online traffic.

Pay per click (PPC)

Pay per Click means that you place an ad on someone else’s website; if a person clicks on that link they are transferred to your website, and you pay a fee.

The website is usually Google or Facebook and the fee is determined by an auction-like system, but is most likely between $1 and $10 per person who visits your site.

The great benefits of PPC are:

•    You only pay for results.
•    You can track results.
•    You don’t pay for all the people who see your ad but don’t click, yet this exposure has real value in raising awareness with   potential future buyers (one of the functions you have to pay for with conventional advertising).
•    It’s very fast.

Google gets more PPC revenue than everyone else put together, but right now we are getting better value results out of Facebook, for many clients – and the future client awareness bonus of Facebook is very strong.

You can run a PPC campaign yourself, starting with just $100, but be warned you have to put a lot of time in to learn the systems and tweak them for best results.

Many firms will mange your account for you with fees around 20% but this buys you only generic or set-and-forget style service. To really micro manage and continually refine a PPC account for best results takes much more time and skill. On a small budget you might be paying as much as your advertising again in fees.

Pay Per View (PPV) - banner ads or video ads

Much more like conventional TV or newspaper advertising, under this system you pay every time someone sees your ad.  Fees are usually quoted per thousand views.

Mostly commonly the ad is a banner, it can sometimes be a mini-video. Clicking on your ad can take the viewer to your website.

•    Unlike PPC, with PPV you pay whether there is a result or not.
•    You can still track results from clicks.
•    You get access to a wider range of websites, so you can choose sites that are likely to have traffic interested in your products (eg, choose a recipe site if you sell top quality olive oil).

This is a smaller part of online advertising, but the increasing use of video is driving strong growth. As the web matures, this space will become more interesting.
DIY is harder with PPV as the ad itself must be highly visual. In advertising terms, the creative is far more important. And the technical aspects of preparing it can be far more complicated. Your options range from hiring a studio to make the ads but managing their placement yourself, through to full service providers.

Paid directories

Over the years there have been many paid directories, which are websites that list other websites or businesses in a way that can be searched (yes, Google and Yahoo are in fact directories).

Paid directories attract a lot of traffic to their website and you pay them a fee to have some exposure to that traffic. At least, that’s the theory. Mostly they have failed to get the traffic and then failed. In my experience their return on investment to advertisers has ranged from poor to zero.

An exception is local directories, that focus on giving you local providers. Google (so far) has not done well with local, so using local-focus directories can be an important part of a strategy. I doubt though that anyone will find a paid directory that can be their main advertising source; traffic volumes are low.

So called vertical directories (they focus on one subject, eg engineering) could be useful if there is one for your sector and it is strong, but most often these directories are weak (not enough entries, not enough information, not enough traffic).

Large national directories in my experience are over-hyped and over-priced.

To get started DIY:

•    Google directories <>
•    Google directories <>
•    Google words or phrases you would like to be found for and check out what directories appear in the search results.

Most companies that have agencies or studios helping with their advertising take their advice on directories. Be aware that what advice they give may affect what commissions they receive; ask for disclosure.

Advertising on related traffic websites

This is fundamentally the same as pay per view, however PPV usually ends up meaning buying a package of exposures on various sites put together by a service provider, while people refer to “advertising on related sites” when they are more carefully choosing specific target sites and probably negotiating direct with them.

If you are looking at this option, don’t just buy whatever option a site offers or be put off if they don’t have advertising. Try instead to think of a joint promotion that ads value for both of you, and include reciprocal links that are visible and promoted on each site (many links are exchanged purely to impress search engines and are not promoted to users).

Advertising in apps on mobile devices

Most of those people you see playing with their phone are not talking to anyone, they are playing with an app. And many apps contain advertising, especially the free apps people love the most.

You can run ads inside other people’s apps that connect to your website. If you can find an app that defines your target audience (say, a sports trivia quiz when you own a spot store) then this is worth a try.

Usually app publishers don’t control the ads that run inside their apps, they are managed by the owner of the app platform (eg, Apple for iPhone apps).

Generally these ad managers make it not so easy for you to deal direct: they prefer to deal with an ad professional who should know what’s going on and ask fewer questions. In reality no-one knows what’s going on because this stuff is still being made up as we go along.

Off-line advertising for online traffic

A lot of internet related advertising is actually “off-line” – in newspapers, on TV, on letterheads and brochures. It’s advertising designed to get people who are not on line and move them on line.

You can do a lot of tis type of advertising for no extra cost simply by making a point of featuring your website address prominently on everything you do. Pretty simple, and effective.

Larger companies sometimes use off-line campaigns with the sole purpose of driving traffic to their website, specially when the website is new.  Competitions are often used. Generally this is a big budget adventure and often the return on investment is not great, so tread carefully.

Is this for you – and how do you choose?

If you’ve got a website, yes this is for you.

Even if you are totally convinced, I recommend you start carefully and test as you go.

Your best first option, because it’s easily controlled, low cost and the likely to be the most effective anyway, will be either pay per click Google search terms (Adwords) or pay per click display ads on Facebook.

I’d give both of them a go and compare.

But do give it a fair try; that means you’ll have to put some time into planning and monitoring.