How Digital Advertising Works: PPC, Search and Display Ads

While online advertising is a proven way to target and reach audiences with concise messaging, myriad options make it tough to know which avenues will be most effective for a business. The major online advertising options (described below) offer enough variety so businesses of any size, type, and budgetary constraints can conduct an ad campaign that suits their needs.

Benefits of Online Advertising for Businesses

Businesses of any size and type can participate – eCommerce (sells only online), local/regional service or product business (lawyers, restaurants, brick & mortar stores, etc.), services not limited by location (consulting, IT support, etc.) – and reach the right customers. Benefits include the ability to:

  • Advertise directly to target audiences based on demographics, interests and location, with easily-customizable, specific messaging
  • Track effectiveness via metrics showing an ad campaign’s impact on website traffic and conversions, then modify in real-time as needed
  • Get clear ROI data and much more fluid, dynamic, and precise marketing opportunities than print advertising

How Online Advertising Works

Online ads can and should be precise in who they target, going only to viewers based on location, age, interests, or other demographics relevant to the business. Most businesses structure and pay for online ads in one of the following ways:

  • Pay-per-click (PPC) is paying for an ad based solely on the number of clicks it gets. A business can post multiple versions of the same ad and quickly see which gets the most clicks and make changes as needed. This is effective for those with a strict budget, as spending limits can be preset.
  • Budget-based/fixed-rate is when businesses pay a set price for ads up front, and is used often on content-focused sites where the target audience is likely already there.
  • Cost-per-thousand (CPM) is when the advertiser pays for every thousand impressions, and impression being each time an ad appears on a user’s screen, regardless of whether the user interacts with it.

In al cases, the ‘click’ goes to the business’s homepage or a content-specific landing page, and it’s easy to track.

Types of Digital Ads

  • Display Ads – These fixed rate ads are distributed to countless websites in the form of banner, video (pre-roll), or native (similar to an advertorial) ads. They automatically appear on sites where targeted users are likely to be, rather than appearing based on a user’s search. This example shows a regional newspaper’s website with display ads for local businesses on the top and right.
  • Search Ads – When a user types in a query, and a list of results appears, those at the top of the page are often search ads and are designated as such, with the word “Ad” displayed. Then, when a user clicks the ad, the business is charged (PPC). Example: user types in keyword phrase “airport parking” and  the following appears – two ads followed by organic results. Most major search engines offer this type of search advertising, including Google, Bing, DuckDuckGo and others.
  • Google Adwords – This is the dominant platform for search advertising, with a robust administrative dashboard behind-the-scenes that allows very precise control of the campaign. These PPC ads are effective for campaigns based on specific keywords. 
  • Shopping Ads – These are similar to search ads, except these ads appear on the right size of the search results page, with images. This example shows how ads appear ahead of organic search results for search criteria of “buy a PC”.
  • Social Media Ads – These are paid ads on social media sites such as Facebook, Instagram and Twitter. These can be bought and sent to users based on data the sites collect and are especially effective for businesses that have a strong social media presence. Learn more about Social Media Marketing here.
  • Business Directories – Sites like Yelp are built around helping people find and review businesses, and are now crucial in reaching potential customers. Many businesses make premium accounts so they appear higher on searches in the site, and can highlight good reviews.

Something else to keep in mind is the process of remarketing to or retargeting people who have visited a site but may not have made a purchase or contacted you. It works by placing a cookie in the user’s browser history (a common practice), so after the user leaves your site, your ads appear on other sites they visit as a reminder about your products or services.

Shown below: example of search ads, shopping ads, and display ads

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Additional Resources

Display Advertising
Digital Marketing: Laying the Groundwork to Succeed
Remarketing Your Website Keeps People Visiting
Glossary of online marketing and website development terms

August 16, 2017

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