This guide will introduce you to the benefits of digital advertising and show you how it’s different from traditional advertising. By the end of this guide, you should have a the basic information you need to decide whether or not digital advertising is right for your business.
Why do people advertise?
No matter the size of your business or the type of business you have, it’s likely that you advertise for a few reasons: to make people aware of your brand, to create buzz around your brand, and ultimately, to make people want the product or service you’re advertising.
What is marketing?
Marketing is the tool you use to tell your business’s story. Good marketing will help you create brand awareness, get potential customers to consider your brand as an option and hopefully, build customer loyalty and get the right type of customers to buy and buy again.Step 1: Increase brand awarenessStep 2: Get people to consider your brandStep 3: Get people to make a purchase
What are the benefits of advertising online?Advanced targeting options
Targeting is one of the most important benefits of advertising online because it gives you the ability to show your ads to specific types of people.
Keep in mind that not all digital advertising is the same, and most online advertising tools have limited targeting options. For instance, you may see targeting options like location, age, gender, interests and potentially a few others depending on the advertising platform.
But Facebook is different.
People on Facebook share their true identities, interests, life events and more. With over 1 billion active users on Facebook, advertisers have the option to target their Facebook ads to the types of people who matter most to their business.
Facebook targeting options
- Location: Reach people based on country, state or province, current city or zipcode
- Age and Gender: Narrow your audience based on age and gender
- Language: Target your ads to specific languages
- Interests: Reach people based on the interests they’ve shared, their activities, the Pages they’ve like on Facebook and closely related topics
- Behaviors: Reach people based on purchase behaviors or intents, device usage and more
- Connections: Reach people who are connected to your business’s Facebook Page, app or event or their friends
- Custom Audience: Create your own audience using your pixels, email addresses, phone numbers or app user IDsLookalike Audience: Reach people who are similar to your audiences
Ad scheduling and budgeting controlsAd tracking and performance metrics
What marketing terms should I know?
Here’s an overview of some terms you may see during the advertising process. Keep in mind that advertising platforms may have different terms or definitions for the concepts below.The parts that make up an ad
Online ads typically have the following parts:
- Ad creative: The ad image and text that shares your message to your audience.
- Targeting: The audience that you’re targeting your ad to.
- Placement: A place where the ad appears (ex: in search results, in a social media feed, somewhere on a website page).
- Bid: The amount you’re willing to pay to have customers see your ad and click it or take some other action. On Facebook, you can use automatic bidding (your bid will automatically be optimized to help you reach your objective). Or, you can choose manual bidding and set your own maximum bid.
- Budget: The amount you want to spend for your whole ad campaign.
- Schedule: The length of time that you want your ad to run.
Terms to know while creating your ad
- Advertising objective: The goal you want to achieve with a particular ad campaign. For example, your advertising objective may be to get more people to see your ad and then sign up for services on your website.
- Targeting: The process of choosing the people you want seeing your ads.
- Remarketing or retargeting: A marketing technique that lets advertisers target people who’ve already visited a website. For example, if you look at a pair of shoes on one website, you may see an ad for those shoes on Facebook if that advertiser is using remarketing.
Understanding ad auctions
For many online advertising platforms, ads that you create will then compete against each other in an ad auction, which is an online market that’s similar to an auction in real life.
Check out the example below to see a typical auction process:
- Lee visits a website that has advertising.
- The website gathers ads that are targeting their message to someone like Lee, based on things like age or location.
- The bid that an advertiser placed when creating the ad will be used to compete against other advertisers who are also trying to reach Lee.
- The auction selects the winning ad based on the advertisers’ bids and targeting.
- The winning ad is shown to Lee.
Terms to know while looking at your ad results
Once your ad is shown on an advertising platform or website, you may see some of the following terms when results of your ad campaign start coming back:
- Clicks: The number of clicks your ads get from people who’ve seen them.
- Click-Through Rate or CTR: The number of clicks you received divided by the number of impressions.
- Impressions: Advertising platforms may measure impressions differently. At Facebook, impressions are the number of times your ad entered someone’s screen for the first time.
- Reach: The number of people your ad was shown to.
- Frequency: Frequency is the average number of times your ad was shown to a person.
- CPM (Cost per 1,000 Impressions): The average cost you’ve paid to have 1,000 impressions on your ad.
- CPC (Cost per Link Click): The average cost you pay each time someone clicks your ad. This number is calculated by dividing the amount of money you spent on an ad divided by the number of clicks it received.
- Conversions: Conversions are actions that customers complete, like making a purchase or adding to a shopping cart on a website.
- Attribution: Before someone purchases a product or service, they may see several pieces of marketing for that product or service. For example, they can hear a radio commercial, see a billboard and then see an online ad. Attribution looks at those different marketing efforts and gives each credit for contributing to someone making that purchase. Keep in mind that marketing platforms may have different attribution models and ways of assigning credit.
How do I know how my ad campaign is doing?Understanding return on advertising spend
It’s important to know how to measure the success of your online advertising campaign. Understanding your campaign’s success will help you figure out what you’re getting for the amount of money you’ve spent on advertising. This is called Return on Advertising Spend or ROAS. Once you know what your ROAS is, it’ll help you figure out how to plan future advertising campaigns.
For example, say that you own a hair salon and get about 30 appointments booked online per week. You decide to spend $25 on a 1-week ad campaign to increase the number of online appointments booked. When your campaign is done, you see the following results:
- 10,000 people saw by your ad
- 60 people booked an online appointment
- You spent $0.42 per booked appointment (also referred to as a website conversion)
|Where did you start?
|Where did you end up?
|How much did the number of appointments go up?
|30 appointments per week with no advertising dollars spent
|60 appointments per week with $25 spent in advertising
|30–60, or an increase of 100%
If you feel this $25 was a good investment for your business, then you may want to create similar ad campaigns in the future.Understanding your ad results
Every advertiser is unique and may need to set their own goals for how well their ads are performing. Here are some suggestions for understanding your ad results and setting goals to improve your results:
- Did I meet my targeting goals? Compare the targeting you defined to the results you see. It’s a good sign if people in your targeted audience are the ones interacting with your ad. If people outside of your audience are seeing your ad, you may need to adjust that audience (ex: make your audience more specific).
- How much am I spending per action on my ad? Your ad results should show you how much you’ve paid per action on your ad. For example, if you spend $25 on a campaign and get 60 clicks, you’ve spent about $0.41 per click. As you continue to run ads, you’ll want to increase the number of actions while lowering the cost of each action.
- Am I spending the amount I set in my budget? Even though you set a budget amount, you may not spend that entire amount because your ad isn’t delivering to your audience. This can happen in ad auctions. Factors like low bids or the quality of your ad may also affect the delivery of your ad. If you see a trend where you’re not spending your budget amount, re-evaluate the amount you’re setting.
Knowing when ads are contributing to your business
You may be asking: “How many of these new appointments are a result of my ad?” For objectives like website conversion, you can use the Facebook pixel to see how many of these booked appointments were made after someone clicked your ad. The Facebook pixel is a piece of code added to your website (as an invisible 1×1 pixel image). The pixel lets your advertising platform know when someone visits or takes an action there. Learn how to create a Facebook pixel.Improving your ad performance over time
When creating future ad campaigns, look at previous successful campaigns and ask yourself:
- Who was in my audience?
- What did the image and text look like in my ad?
- How long did I run my campaign?
- How much did I spend?
You can create campaigns similar to the ones that have succeeded in the past or you can test out different versions of that campaign to understand what makes that ad do so well. For example, try running multiple ads with different images, headlines or target audiences to compare the results.