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Sixty-eight percent of marketers said paid advertising is “very important” or “extremely important” to their overall marketing strategy. — Getty Images/Mikolette

The first steps into the world of digital advertising is overwhelming for many business owners and marketing professionals. There are many different ad platforms and channels you can choose from to advertise your business. Knowing where to start is often the most challenging part.

In this guide, you will learn why an investment in advertising is important for modern businesses as well as the basics of the four different types of online advertising.

Why invest in online advertising?

Most business owners would agree that the most important factor of any advertising or marketing strategy is the result your efforts produce. To that end, entrepreneurs who aren’t familiar with digital advertising may be dissuaded from the seemingly high costs of online ads. Instead, they may choose to only pursue organic marketing strategies in which they can closely monitor the cost-effectiveness of the platform.

However, online advertising is becoming increasingly more popular and important to modern marketers and business owners. In fact, according to a Hubspot report, 68% of marketers stated that paid advertising is “very important” or “extremely important” to their overall marketing strategy. The same report reveals that 33% of marketers invest in digital ads to increase brand awareness, while the next 24% use it to directly impact sales.

Today, paid advertising is one of the most utilized channels to follow one of the oldest principles in marketing: the Rule of 7, which stipulates a brand must make seven impressions on a customer before they make a sale.

Finally, digital advertising is often viewed as its own siloed platform that is separate from all organic marketing efforts. However, online ads work alongside all your other marketing efforts and can benefit your organic strategies in the following ways:

  • Gain a better understanding of your audience(s) through ad platform analytics.
  • Create higher-performing organic content based on successful ad strategies.
  • Increase traffic to your website and organic content.
  • Increase brand awareness and reach.

[Read: 9 Free Ways to Promote Your Small Business Now]

There are four main types of online ads: paid search, social media, native and display advertising.

Types of online advertising

The four main types of digital ads include paid search, social media, native and display advertising. The benefits and drawbacks are detailed below:

Paid search advertising

One of the oldest forms of online advertising, paid search ads gives you the opportunity to get your target audiences’ attention when they search for something specific online. The primary benefit of search ads is you can anticipate a user’s wants and needs, allowing you to deliver highly specific results to entice them to your page.

Paid search ads start with target keywords, which is a word or phrase that someone types in a search field. Over time, advertisers discovered they could interpret a user’s intent through specific keywords. For example, an advertiser could create search ads for a moving company by targeting people who use the keywords “best moving company” and “moving company near me.”

The three main search ad platforms are Google, Bing and Yahoo. Google is by far the largest search engine with over 3.5 billion searches every day, and it generates about six times the amount of searches than both Bing and Yahoo combined. This ad platform can significantly grow your business, but the competition and costs are generally thought to be steeper than others.

Social media advertising

Social media has become a very popular advertising platform because there are millions, if not billions, of active users on each platform. For instance, Facebook and Twitter have 2.5 billion and 330 million active users each month, respectively. Because of the sheer number of users, business owners and advertisers are flocking to these platforms and are expected to spend over $84 billion on social media advertising.

Advertising on social media has many benefits, such as reaching very specific audiences, learning user behavior through platform-specific analytics, utilizing multiple ad formats, and focusing on strategies and platforms that drive results for your business.

The most common and popular social media platforms to advertise on are:

  • Facebook
  • Instagram
  • LinkedIn
  • Twitter
  • Pinterest
  • YouTube
  • Snapchat
  • TikTok

Native advertising

For this type of online ad, an advertiser works with a publisher or media platform to create a paid ad that matches the look, feel and form factor of the format they appear on. The main differentiating factor of native ads from other digital ads is that they often don’t look like ads at all.

Native ads are very common in social media feeds and are identified as an ad when they have a “promoted” or “sponsored” sticker next to them. Another popular native ad form factor is recommended content sections on a web page that look like they are part of the editorial content. The key here is to create nondisruptive ads.

[Read: How to Create a Native Advertising Plan for Your Business]

Display advertising

Finally, display ads are some of the oldest forms of online advertising and have a checkered past. In the late ’90s, display ads were often aggressive and misleading. At their worst, display ads could be used to install malicious software on a user’s computer, infecting it with viruses. Because of this negative association, users developed “banner blindness” and ad blockers became increasingly popular.

However, display ad technology has advanced to the point in which advertisers can deliver relevant ads to specific users through big data analysis and machine learning. The two most popular display ad networks are Google Display Network and Facebook's Audience Network.

Display ads can take the following form factors:

  • Banner ads
  • Interstitial ads
  • Rich media
  • Video ads

Regardless of the form factor, display ads are intended to attract a user’s attention and take a specific action, such as visiting a website or making a purchase.

[Read: Unlocking Export Potential: How to Advertise and Market Internationally]

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