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The ROI.com.au Guide to Buying Online Advertising

Get a better understanding of online advertising before investing

Online advertising has changed the face of advertising in many ways. The two key differences between advertising online and advertising in traditional media are cost and measurability.

The low cost of buying online advertising has opened up the realm of advertising to even the smallest companies in Australia. Where traditional advertising formats required hefty marketing budgets, online adverts have varying rates, can be switched on and off and include daily budgeting options which mean it ends up costing as little as a few dollars.

Even companies with reasonable marketing budgets struggled to see how effective offline advertising was – yet nowadays, when businesses buy advertising space online, they can measure exactly how effective it is and can accurately evaluate the return on investment (ROI) of every advertising dollar spent through Google Adwords, SEO strategy programs other advertising platforms.

Where’s the best place to advertise online?

The best place to advertise for most companies is Google. Australia relies heavily on Google for conducting searches, but getting ads on Google is harder as a result.

Paid advertising – the sponsored links section of Google search results, gives instant access to your target market, however it comes at a cost as what you spend buying such advertising space increases as traffic and competition for those keywords increases.

SEO presents the best possible return on investment when it comes to advertising online, but it’s a medium to long-term strategy so investing in a mix of paid advertising and SEO within budget is a solid approach which delivers success to a lot of companies.

Facebook and social media present an alternative for some businesses – particularly those products and services aimed at youth. The low cost and the option of pay-per-click or cost per thousand impressions (CPM) presents an opportunity to manage the advertising in a way that best suits your business so ad placement in social media should not be discounted.

Understanding PPC, CPC, CTR, CPM and CPA – what do they mean?

In understanding online or digital advertising it’s important to know what the various acronyms mean:

PPC – Pay-per-click advertising such as Google sponsored links

CPC – This is the cost-per-click associated with PPC advertising

CTR – The click-through-rate is how often a searcher clicks on an advertisement, relative to how often it is displayed

CPM – Cost per thousand impressions is the cost incurred for having your ad displayed 1000 times. This is used commonly in banner and social media advertising.

CPA – Cost per acquisition is the cost you incurred to secure a customer.

One form of online advertising might suit one business more than another

Banner advertising and social media ads are generally seen as less effective than sponsored ad placement on search engines like Google. The click through rate (CTR) is usually much lower than PPC ads and there are credibility issues to contend with.

However, here’s an example worth consideration – if the cost-per-click (CPC) for your chosen key phrase is $3.50 and you have 1000 ads per month on Google with a click-through-rate (CTR) of 2%, you get 20 visitors and the cost of online advertising incurred will be $70.

A related cost per impression (CPM) offering may present 1000 impressions for just $5. Although the CTR is generally less than half of one per cent, you may get 4 clicks (0.4%) – scaling that to your $70 PPC investment will give a return of 56 site visitors for the same investment.

This will not happen in every industry, in fact by and large, Google advertising will prove more effective but it’s worth bearing in mind that a one-size-fits-all policy doesn’t exist and there can be effective results for businesses willing to do their research before deciding which form of advertising to buy into.

The effectiveness of online advertising will depend on your end objective

Are you aiming to build brand awareness or simply generate more sales?

From a brand awareness standpoint buying into and relying on one form of online advertising is a flawed approach to marketing your business. Extending your reach, within your marketing budget will effectively deliver your message to a greater spread of your target market.

Even from a simple sales generation standpoint, it makes sense to buy into different forms of advertising to test their effectiveness before weighting your investment on what gives you the greatest return (ROI).

Test various forms of Online Advertising to find the best fit

Continuous testing and tweaking is important when evaluating the effectiveness of online advertising – this is the best route to getting the advertising mix that suits your business.
Evaluating the effectiveness of online advertising isn’t simply a case of selecting which ad delivered the best return on investment (ROI). To get a best-fit and an optimal return from your online investment you need to also examine how it impacts on brand awareness and how it fits in with your medium and long-term marketing goals.

Testing different forms of advertising, tweaking ad copy, SEO strategies, ad creation and on-page content, getting a more detailed knowledge of what percentage of traffic comes from various stages of the buying cycle and understanding brand maturity will bring you closer to getting the optimal return on investment (ROI) for your online advertising spend.

If you would like to make the most of your advertising budget, roi.com.au can help – we manage online advertising campaigns for hundreds of Australian businesses, delivering excellent results in various industries through Google AdWords.