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The digital marketing field is full of fantastic low-to-no-cost options for businesses. It costs nothing to start a social media page and nada to create a blog. However, many companies use paid advertising as a part of their online marketing strategy. Discover why your company should consider doing the same.

What Are Forms of Online Advertising That You Might Pay for?

While many types of of online advertising and marketing are very low cost or entirely free, there are a few that do come at a cost:

Social Media Ads

You can purchase ads on social media sites like Facebook and Instagram to hyper focus on your target market. Most social media ads are what are known as “display ads.” They usually show up as sponsored posts in between the content the users subscribe to. Many companies try to make their social media ads look as much like normal posts as possible so that users won’t automatically ignore the content of the ad.

Search Engine Ads

Google and other search engines offer pay-per-click, or PPC, advertising. It entails a bidding system for keywords, and you only pay if your ad gets a click from a potential customer. Search engine ads are almost always search ads, which differ from display ads in that they look just like any other entry on the search engine results page, or SERP, rather than what you might consider a classic ad with pictures and slogans. Search engine ads include a link to the webpage and a short description of the content of the page.

Search Engine Optimization

While you can usually do the legwork of SEO for free, it can be worthwhile to hire a marketing company or digital marketing experts to help you determine the best strategies for maximizing your SEO. This is a broad category and could include a number of different strategies as determined by the marketing team, some of which may be paid advertising.

Of course, within each of these categories are specific subcategories of paid advertising. Each has its own costs, benefits, and disadvantages to consider before selecting a paid advertising option for your business.

Image via Unsplash by austindistel

Why Does Anyone Pay for Online Advertising?

It might sound counter-intuitive to pay for something you can do for free, but paid advertising does have some benefits that free advertising doesn’t. Consider why you might pay for online advertising:

  • ROI – Paid advertising, particularly PPC ads, have a high return on investment and are responsible for the majority of clicks as compared to organic ads.
  • Analytics – Some social media sites, like Facebook, allow you to pay for bonus analytics like Audience Insights through their paid ads platform. You can get data that will help you finely target the ideal potential customer for your product or service.
  • Reach – A creative paid advertising option is the use of influencers. You can pay them to promote your product or brand on their page, which reads like normal, unpaid content to many followers, unlike traditional search or display ads.
  • Consistency – Banner ads, those display ads that populate at the top or bottom of webpages, have a surprisingly high click-through rate. You can often count on them to produce a number of customer conversions you wouldn’t otherwise receive.
  • Retarget – Some types of paid advertising allow you to retarget potential customers with follow up content after they engage with one of your ads, increasing the likelihood that they’ll convert.

What Sorts of Costs Can You Expect for Online Advertising?

Paid advertising is often quite flexible — you can decide how much you’d like to budget for paid ads and then select strategies that fit within your budget. Consider these general cost estimates to help you determine how much you might reasonably expect to pay for a few of the most popular paid online ads, but remember, of course, that your specific situation could cost more or less than the averages:

  • Google ads – The average cost for a single ad is $2.32 for the search network and $0.58 for the display network.
  • Google advertising search campaign – The average cost per action, or CPA, for this specific campaign is $59.18.
  • Google keywords – Keyword costs can range dramatically depending on their popularity. The most expensive keywords on Google cost, on average, $50 or more.
  • Facebook ads – Facebook divides its ad costs into cost per click, or CPC, cost per action, or CPA, and cost per mille, or CPM. The average cost per click is $1.72 while the average cost per action is $18.68. The cost per mille, or the cost of a thousand views, is roughly $10 on average.
  • Instagram ads – Instagram ads cost about $5 per mille, but that price is quickly rising to keep up with Instagram’s increasing popularity.

Overall, the average small business’s paid advertising costs on Google alone are about $10,000 per month, or $120,000 per year. If your business also wants to use social media advertising or enlist the help of a digital marketing expert, that average is likely to go up.

Remember, however, the ROI on paid advertising is high, and you don’t have to play by the averages. In fact, consider employing a basic, minimum budget for online paid advertising if you want to keep costs low but still take advantage of the potential conversions. Facebook and Instagram both charge as little as $1 a day for impressions and $5 a day for clicks, views, or likes. Using a flat-rate strategy like that can help you manage your money more effectively than a sliding scale CPA, CPM, or CPC strategy.

Paid advertising can provide a number of benefits to companies who use it, including increased customer conversions and brand awareness. Know what you can expect to pay on average and set a clear budget for your company when embarking on paid ads.

Knowledge Base: Intro to Marketing

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