Online Advertising Can Boost Revenue

Search engine marketing (SEM) can get your company's name before a huge number of potential customers. By leveraging keywords that describe your business, products and services, you can have text and display ads appear on the search result lists of major search engines. You can extend your marketing reach even further by making prudent use of ad networks.

Online advertising is the closest thing on the Internet to traditional advertising. It differs from search engine marketing (SEM) by the way it targets prospects. SEM targets prospects based on keywords. By contrast, online advertising targets prospects using their behavior and demographics.

Like print publications, individual websites attract unique visitors that share common interests, behaviors and demographics. The goal for marketers is to identify websites that attract the largest audience of potential customers and create online ads that will draw customers to your website.

Online ads are typically purchased on a cost-per-thousand (CPM), cost-per-click (CPC) or cost-per-acquisition (CPA) basis:

Cost per thousand (CPM). You pay a fixed fee per thousand advertising impressions. (The M in CPM is the Roman numeral for 1,000.)
Cost per click (CPC). You pay a fixed fee every time a user clicks on your ad and is redirected to your website.
Cost per acquisition (CPA). You pay a fixed fee every time someone clicks on your ad and completes a desired action on your website, such as submitting an order or signing up for your newsletter.

Many types of online advertising options are available to you. In all probability you will want to use a mix of options that best suit your unique business needs. Consider:

ad networks
text ads
display ads
rich media ads
in-text ads

Ad Networks Are Convenient, Efficient

Since there are millions of websites available for online advertising, one of the most convenient and efficient ways to purchase ads is to use an ad network, which sells advertising on behalf of hundreds or thousands of participating websites.

Ad networks serve as a single point of contact for many sites. This saves you the time it would take to contact 20-30 websites individually. Ad networks provide a single invoice for all websites you select for advertising. They provide standardized reporting to compare the performance of individual sites, and they standardize the ad units.

There are three types of advertising networks: representative networks, blind networks and targeted networks.

Representative networks. These are ad networks that represent specific websites. Advertisers select sites they want to advertise on from the network's portfolio and pay specified market rates.
Blind networks. Blind networks buy remnant (unsold) inventory in volume from websites and offer low pricing to advertisers. Since the websites offered by the network will vary based on inventory and demand, potential customers are targeted by demographic characteristics across many websites. In exchange for lower costs, advertisers relinquish control over where their ads run.
Targeted networks. Targeted networks are evolved blind networks than incorporate user behavior into their ad server technology. This allows them to target potential customers across their entire network based on behavioral triggers. For example, if a customer has visited a website related to your industry, the network can continue displaying your ads to the same user—even when they visit unrelated websites.

When selecting a network, consider the quality of websites a network represents and the quality of ads that appear on the network from other advertisers. You should also consider the type of ads supported by the network. Ensure you have the appropriate text ads, display ads and rich media ads for the given network.

Text Ads Are Online Advertising Mainstays

Text ads are the most popular format for Internet advertising. They are easy-to-create, offer good click-thru rates and contribute to your company's unaided brand awareness. Although less immediate than click-thrus, unaided brand awareness is important to marketers because it contributes to future sales when web surfers remember their ads.

Unaided brand awareness is also an important indicator of brand dominance. There is a high correlation between unaided awareness and market share. When people shop, they begin with the brands that they know first. The most effective text ads are designed to work on both levels—whether they are clicked on or not. They inform potential customers about specific products and provide a relevant brand statement.

The following tips can help you create effective text ads:

Be an expert. People use a search engine to learn about products and services. Use text ads to promote an informative article and product guide on your site. From a branding perspective, this can position your company as an "approachable expert" in the mind of site visitors.
Be active. Replace self-descriptive phrases like "We provide savings" with active phrases that describe the benefits of your expertise, such as "Increase your Profits." This provides incentive to click-thru. Ads are more memorable when they present benefits.
Use hot buttons. Hot buttons are emotional triggers related to the keywords associated with an ad. People value emotional rewards. Incorporate words that exemplify the benefit of your product or service. A "problem solver" is more relevant (and memorable) than an "experienced professional."
Think "ads" not "ad." Create multiple ads within a campaign. For each, use a variety of keywords, hot buttons, action verbs and click-thru offers. This allows you to target each ad within a specific context where it can remain effective. When using multiple ads within a Google ad group, ads that have higher click-thru rates will be favored over ads with lower click-thru percentages. To boost the rotation of ads, you can define separate groups for related ads.

When you create text ads, consider whether you've addressed the underlying needs of website visitors. If you understand the reason they buy a product or service, you can use your findings to create an ad that is relevant and memorable—which means they'll click if they need your service now, or remember your company when they need it in the future.

Use Caution with Display Ads

Display ads were once the most popular form of advertising on the Internet. In recent years, however, text ads, driven by search engine marketing, have become more popular. The effectiveness of banner ads relies on volume because click-thru rates are very low, averaging 0.5 percent. This means for each thousand display ads purchased, you can expect five click-thrus.

Since the average Internet user is exposed to hundreds of display ads each day, most have learned to look at display advertisements without seeing them—a practice referred to as banner blindness. Banner blindness means Internet users focus on the content of a page and ignore the advertisements. This is especially true for bright, flashing ads, and ads unrelated to the website content being viewed. To the extent the users do see these ads, the have a very negative response—not the goal you want from your advertising dollars.

Since display ads have a lower click-thru rate than text ads, many marketers challenge their effectiveness as a tool for generating sales. At the same time, however, marketers recognize the contributions that banner ads make to a company's unaided brand awareness. Unaided brand awareness is important to marketers because it contributes to future sales when web surfers remember an ad they've seen—even though they never clicked on it.

The effectiveness of display ads is determined by their size and location on a given web page. People read web pages in an "F-pattern", narrowing their focus as they scroll down a page of content. Readers focus on the content at the top of a page, read a little bit further down, then give up and go back to the beginning of the same or subsequent page.

This means that display ads that appear on the top and top-right side of a page have higher visibility than ads placed on the left or further down the page.

When creating display ads, marketers can optimize their click-thru rates by considering best practices:

Target your message. Tailor the design, content and offer in your display ad to appeal strongly to a specific subgroup instead of to everyone in your target market. Create several versions of the ad that appeal to different subgroups and rotate them. Determine those that perform best and use them more frequently.
Keep it simple. Avoid clutter. Don't try to use a display ad as a substitute for visiting your site. Choose complementary colors that grab a visitor's attention. Highlight a specific offer.
Create a sense of urgency. The best display ads promote a product or offer with high demand, but limited availability. Phrases such as "Hurry!", "Limited time!", and "Special offer!" promote urgency.
Promise and provide a better destination.Your display ad should promote your ad's landing page as a better destination than the current website. Create a landing page that's specific to the ad, rather than dropping visitors on your homepage. The landing page should be targeted toward the consumers and the specific offer described within the ad.

Don't be discouraged if your display ads don't generate instant click-thrus. As with any advertising format, it's important to experiment with different designs, content and offers to determine what works best for your company.

New Technology Expands Online Advertising Opportunities

Wide-adoption of high-speed Internet has made it possible for marketers to integrate video, audio and interactive features within their online advertising. This makes it easier for marketers to reinforce their print and TV ads by re-purposing photos, video and music from those campaigns for online ads.

Rich media ads allow viewers to submit information by filling out a form, or even make an online purchase, from within the ad. They can also include programming that provides immediate feedback or alternates the content of the ad based on predefined criteria.

Based on data gathered by The Nielsen Company in the third quarter of 2010, and reported by DoubleClick, rich media ads accounted for 10 percent of all ad serving volume. An earlier report found that exposing audiences to a single rich media with video ad results in an average 1.16 percent increase in purchase intent among exposed groups. Using rich media without video results in an average 0.50 percent increase. The research firm ComScore Inc. reported that, in April of 2010, flash and rich media ads combined to represent 40.3 percent of the 409 billion display ads viewed that month.

Key findings of the report include:

Users click video "Play" buttons more than they click on image ads.
Video ads garner about three times the replay rate as image ads generating click-thrus to advertisers' sites.
On average, video ads play two-thirds of the way through. Play-through rates do not vary greatly by expandable or standard video ad formats.
Video click rates are far higher than image format ads. Users click on video ads about five times as often as they do on image ads.

Flash and rich media ads represent 40 percent of U.S.online display ad impressions, according to comScore, Inc.

In-Text Ads Turn Ordinary Words Into Advertising

The prevalence of display banners and text ads has made all but the most annoying online ads nearly invisible to online users. To stand out from the crowd, some marketers are turning to a simple, relevant and transparent advertising format: the text link.

In-text ads insert hyperlinks into ordinary website content around keywords in order to trigger advertising.

Many online marketers have recognized the benefit of in-text ads. Amazon offers in-text ads to all of its affiliates. By placing a few lines of javascript on each page of their website, affiliates can build revenue by integrating links to products sold on Amazon.com. Keywords that appear in their website content (authors, book titles, and brand names) automatically link to product pages on Amazon. Like Konetera, Amazon also integrates pop-up ads on mouse-over that include product name, image, rating and price.

The benefits of in-text ads aren't without cost, though. Sites using in-text ads tend to load slower (as in-text ads are integrated) and can make pages less user-friendly. For example, as users scroll down the page they may inadvertently cause ads to flash on/off. And while the ads begin subtly as text links, some users are offended by the sudden appearance of uninvited multimedia ads in the middle of their computer screen.

A less risky, and more promising, use of in-text advertising is available without the use of pop-ups. In addition to attracting customers without use of pop-up ads, this approach allows marketers to organically grow their website's link popularity and search engine ranking by gaining incoming links that search engines can't identify as ads.