Strategy

The Two Most Effective Types of Online Advertising

Brad Smith
October 20, 2011

Advertising is a critical part of your promotion plan.

It’s one of the fastest ways to build buzz and generate leads or sales.

But there’s no one size fits all model. You can’t just throw money around.

Large businesses can use every type of advertising because they have the capital to back it up.

But small businesses need to figure out what type of advertising is right for their them.

Here are the two most effective types of online advertising that every self employed professional and small business owner should be utilizing.


Blank Billboard
Image courtesy of mediaboytodd

1. Brand Advertising

This type of advertising focuses strongly on the display of the brand, logo, and message.

Offline, that includes TV advertisements, radio spots and billboards. Online, it’s mostly banner ads and other forms of integrated advertisements.

The main metric you’re using (and paying) is CPM, or Cost Per Thousand customers.

You want to know both the total reach, and unique impressions to determine your cost/benefit.

Display advertising is usually difficult to track and measure directly, but it’s powerful nonetheless. It’s the single best way to reach as many people as possible.

Sponsorships and promotions would also fall under this category, although the benefits are somewhat intangible.

Another example of using brand advertising is retargeting.

Have you ever noticed that specific ads will follow you around the internet? They place tracking cookies on your computer, and are trying to get you to come back or remind you to fulfil an abandoned purchase.

2. Direct Response Advertising

This type of advertising wants to elicit a direct response from the customer.

The best online example is Google AdWords.

When using Pay-Per-Click (PPC) type advertising, you’re paying based on each action a customer takes with your advertisement.

When analyzing Cost-Per-Click (CPC) advertising, you want to know the volume, competition, and average CPC bids. That helps you set up a framework to determine how much it will cost to acquire customers.

Direct response advertising is easier to measure direct results. Online, you would send this paid traffic to landing pages with Opt-In forms or sales pages.

You would then measure your conversion rates to determine if the advertising was cost effective. How much you could grow by investing more in advertising, or by increasing the conversion rate?

Another new variation is paying based on engagement. There are a few, exciting social media platforms that are now using this to track the ROI of social media advertising.

Two perfect examples are Twitter’s new Promoted Tweets and Accounts platform, and Social Rewards. You only pay when someone takes action (Click through, ReTweet, etc.) with your advertisement.

Advertising is an integral part of your marketing strategy. It’s the best way to reach people and get the quickest results.

How does each type play in to your promotion plan?

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