Updated: Nov 22
Author: Vincent Bernard
Date of Publication: 14/03/2023
The use of paid advertisements has become almost mandatory in the world we live in. Indeed, advertising on the internet has become a major channel for companies to promote the products or services they offer. Therefore, with the digital era in which we live, people spend more and more time browsing on social networks or on different search engines. So, this represents a huge potential for companies.
Advantages of using paid ads
Using paid ads for a company has many advantages:
They allow a very fast result contrary to organic publications where the investment in time is much more important. This is because an active community must be created around the company’s posts on social networks. Thus, with the use of paid ads, once the marketing campaign is set up, the ads will be quickly visible.
Ads will manage a large amount of data that will allow optimizing the ads. This sets a specific target according to the context, the localization, the user’s behavior contrary to organic ads which remain rather general.
What’s more, the use of paid ads has become one of the main ways in digital marketing for a company to publicize the products and services it offers. In fact, it gives the opportunity to bypass the disadvantages of organic ads, which require a large investment in time to obtain results. However, this method is rather limited because it depends on the algorithms of the platforms on which the ads are posted.
Paid ads give access to a large number of distribution channels accessing a very large sample of the population who will be potential clients.
So now, let's see what the different paid ads are.
Different types of paid ads
There are 8 types of paid ads:
Paid search ad:
The paid search ads allow the referencing of the site on a searched subject. They bring visibility to the website because they appear first in an internet search .
The display ads are ads that appear on Google’s partner sites. Actually, they usually contain text and a photo that takes up the majority of the ad. So, these ads are therefore more attractive than a simple ad without a photo.
Social media ads:
Social media ads are one of the most popular forms of paid ads. TSpecifically, they give access to a very large sample of the world's population with, according to Statista, 4.7 billion users in July 2022.
Remarketing ads intent a re-engagement with the company and to become anchored in the mind of the potential consumer. Therefore, they appear to promote a product/service that they have already seen on the company’s website.
Google shopping ads:
Google shoppings ads are ads that appear on the research page of can where it’s possible to see the product, price and a rate of the product. There are several proposals of the same product or substitute on the page, and it allows us to make comparisons.
Local service ads:
This type of ad allows us to promote local services such as plumbers, electricians etc… Thus, these ads include the name of the business, a mark and also the phone number to contact the person. As a result, this method uses the location of individuals in order to reach a target that is in the area covered by the business in question.
Gmail sponsored ads:
The advantage of this ad is that the advertising mail looks like normal mail except that there is an “ad” tag, and the subject line is in bold. So unlike other types of ads where you can easily distinguish them from the rest of the content on the page, it’s more complicated at the first look. So, it has more chances to reach the targeted person.
These are the ads that appear before or during YouTube videos, it's a YouTube paid promotion. The advantage of this type of ad is that it enables you to develop the proposed offer more deeply. What’s more, they make it attractive with a beautiful video that is appealing to the eye.
The different ways to pay for an ad
When setting up an online marketing campaign, the company decides on the billing method for the advertising purchase. Each method will have different effects and the company will have to choose the method according to the objectives of its marketing campaign.
Cost per 1000 Impressions (COM)
The first method is cost per 1000 impressions (CPM). First, let’s define what an impression is in marketing. An impression is known as the display of an advertisement of this method to promote a product/service that is not yet known. This is because the success is when the ad appears on the page of the individual as he will see it. He will then discover the existence of the product or service put forward. To calculate the cost of this method, we must divide the expected audience by the total budget of the campaign and then multiply by 1000.
Cost per Click (CPC)
The second method is cost per click (CPC). This method is used once the marketing campaign has captured attention. The interest of this method is to know the number of clicks on an ad. Therefore, the cost of this type of method is calculated by multiplying the predefined cost of a click by the number of clicks on an ad.
Cost per Lead (CPL)
The third method is cost per lead (CPL). Now, let’s define what a lead is. In marketing, a lead is a potential consumer. Thus, to calculate the cost of this method, we have to divide the total cost of the campaign by the number of leads acquired.
Cost per Acquisition (CPA)
The fourth method is cost per acquisition (CPA). This is the final stage of a marketing campaign, when the prospect becomes a customer. So, to calculate the cost, simply divide the total cost of the marketing campaign by the number of sales made.
Click Through Rate (CTR)
Another way to measure the success of a marketing campaign is through rates. The first one is the click through rate (CTR). In particular, this is the ratio between the number of clicks on an ad and the number of impressions of it. This rate allows us to define the attractiveness of an ad. On the other hand, the second method is the conversion rate (CVR). It is the ratio between the final action such as purchase, subscription and the number of visitors to the website. However, the problem that arises is what type of campaign to choose according to its needs.
How to choose the right type of paid ad
The CPM method is a good way to improve the visibility of the brand by reaching more people. In fact, it allows us to discover the products/services offered to a large audience. Actually, it is to obtain many leads which will help it identify and refine its information towards a precise target. As a result, there will be increased conversions. In addition, the CPM has a low cost because we only pay a limited number of impressions that will be quickly used to make the ad more accurate. Therefore, we are able to launch another campaign. However, the disadvantage of the CPM is that it doesn’t target a specific audience. So, the audience that will see the ad may be totally indifferent to it.
The CPC method is always profitable for a company because it will pay only when an individual decides to click on the ad. Moreover, this method will allow us to have a precise target by taking into account the geographical data. Moreover, through this method we can measure very precisely the results of the campaign . As a result, we can improve the ads according to what works best. However, this type of campaign requires investing a lot of time because it requires regular monitoring to optimize and improve the ads.
The CPL method has the advantage of accurate measurement of the return on investment (ROI). It is very easy to determine the cost per lead and to see if the campaign is worthwhile based on the general quality of the leads and the price. In addition, this method has the advantage of generating quality leads that will have a high probability of buying the product or service. Therefore, you can control the budget and have an affordable cost because the company will only pay for the leads generated. So you are bound to benefit from this method.
However, CPL also has disadvantages because even if it generates quality leads, you can never be sure that they will all be ready to buy. One of the problems with this method is that you must make sure that the leads generated are all authentic and qualitative. This is because there can be fraud in generating leads.
The advantages of the cost per acquisition method is that it will measure the success of the different channels on which are posted the ads that will give information on what works best. Moreover, this cost is only charged if there is the conversion of a prospect into a real customer, so the company is winning. In addition, this helps optimize the targeting of the right audience because they aren’t only quality prospects who will have a strong chance to buy the product / service offered. Therefore, by analyzing the collected data, it will allow us to improve the advertisements and the website to further improve the quality of the prospects. However, this method has some disadvantages such as the fact that it is not suitable for branding campaigns. As a result, you should only use it for companies that are already well established.
All in all, paid ads are a good way to promote the activity of a company because it has many advantages. However, it is not necessary that the company concentrates exclusively on this type of promotion. This is because that would make it dependent on what would be harmful for the company. Therefore, it is important in parallel to the use of paid advertisement to develop organic research because it helps to build a strong relationship with customers.