Paid Advertising: Is it Really Worth Your Money?

The average company spends about 50% of its marketing budget on paid ads. That’s a hefty investment, but the question is, “Is it worth it?” 

If we look at the statistics, global advertising revenue has increased to $763 billion in the last few years. This year, it may even reach $836 billion. So, it’s safe to say companies are deriving tons of value from paid advertising.

Keep reading to learn more about making the most of your paid ad budget with these popular paid advertising examples.

What Is Paid Advertising?

Paid advertising refers to companies paying for an ad space on social media, search engines, or other platforms. It can be in the form of texts, images, photos, videos, or GIFs. There are many different types of paid ads; let’s look at a few common ones.

1. Paid Search Advertising

Paid search advertising means paying for ad space on search engines like Google, Yahoo, Bing, or Ask.com. 

With this type of paid ad, you can choose your custom bid and the keywords you want to appear for. Then, it’s as simple as writing your ad and letting the search engine do the rest. 

Here’s an example from Nespresso that appears for relevant keywords like “coffee pods.” Even though they haven’t earned the #1 spot in the search engine result pages (SERPs) through SEO, the paid ad makes it look like they’re on top. This builds authority, especially on search engines like Google. 

Nespresso Paid Advertising

Your success with paid search advertising depends on how much you’re willing to bid. With enough money, you can even appear before the organic search results. 

2. Paid Social Media Advertising

When it comes to paid advertising, social media is the most lucrative platform. The global market is already at $207 billion, which is only expected to grow. Social media paid advertising refers to paying for ad space on platforms like Facebook, Twitter, Instagram, etc. 

Let’s look at some paid advertising examples on Facebook. 

This sponsored post from Burger will show up on all relevant customers’ newsfeeds and entice them to order the new spicy chicken nuggets. Meanwhile, the convenience “Order Now” button makes the deal even better. The craving would go away for most customers if they had to go through the hassle of finding the restaurant’s website.

Burger King advert on Facebook
Burger King Paid Advertising

Paid social media advertising is a good way to engage potential customers while they’re still in a pleasant mood, catching up with loved ones, or watching their favorite videos. Plus, you can’t doubt its reach – 60% of the population uses social media.

Most importantly, paid advertising on social media allows you to target a niche audience. Most platforms, such as Instagram and Facebook, let you target users by gender, location, age, and other factors. You can opt for images, videos, GIFs, reels, and even just texts to advertize on these platforms.

3. Display Advertising

Display advertising uses images, videos, and text to entice viewers to visit their website. Google Display Ads are the most well-known type.

The Google Display Network boasts two million+ websites and apps on which you can display your ads. Shockingly, these ads can reach up to 90% of all web users. Keep in mind that Google will share your ROI for these ads.

Here’s an example from IE University. 

IE University Paid Advertising

Since display advertising is image-led, it perfectly targets mobile users. They typically don’t have the time to engage with text-based ads, but a quick picture-and-CTA ad will catch their attention. 

Display ads raise brand awareness by repeating the same ads on different platforms. The average person needs to see your brand at least seven times before they buy anything.

4. Video Advertising

Since the pandemic, there’s been a huge spike in the preference for visual content. In fact, video creation is up 29% since last year. 

That’s also why video streaming and content creation apps like YouTube, Instagram, and TikTok have enjoyed a huge surge in views. You’ve probably spent hours watching Reels without realizing it. 

Video advertising places short video ads between your flow of organic content on social media platforms. You can view the ad and scroll past it or click on the CTA to learn more. Video ads are much more engaging than other paid ads because they’re more likely to get your audience’s attention.

Here is an example of Tesco's Video Advertising on YouTube:

How Much Does Paid Advertising Cost?

Paid advertising costs can vary depending on the channel. Let’s look at a few examples. 

  • Google. You can expect to pay anywhere from $100 to $1,000, depending on the SERP ranking you’re going for. It typically costs $2.69 per click and $0.51 to $1000 for each 1000 impressions. It’s quite pricey, but you can expect an 800% ROI on average
  • Bing. Bing typically charges $1.54 per click, which is 33% cheaper than Google Ads. However, it doesn’t have the same reach, so you can’t expect a good ROI.  
  • Facebook. Facebook paid advertising may cost around $1 to $500 monthly, depending on your ad specifics. Some companies even spend a monthly $3,000 on their Facebook ad campaigns. You can expect a 200-500% ROI
  • Instagram. Instagram ads cost around $0.25 per click, $4.00 per 1000 impressions, and $0.08 per engagement. That’s pretty affordable, considering the app’s incredible reach. 
  • TikTok. TikTok is the best place to reach your Gen Z audience. Its average CPM is $9.16. Other than that, you can expect to pay $0.02 per click.
  • LinkedIn. LinkedIn paid advertising costs about $2 to $3 per click, which is far from cheap. They also charge $8 per 1000 impressions and $0.50 per send for sponsored inMail campaigns. 

Benefits of Paid Advertising

Now that we know the different types of paid advertising, let’s explore its benefits. 

  • More Control. With paid ads, you have much more control over what you put out there. Meanwhile, if you opt for a press release, the publication may edit the ad to suit its specific tone of voice. 
  • Detailed Analytics. Paid ads also allow you to measure results via detailed analytics. This way, you can see just how your ads are performing. Some platforms even give you a quality score so you can optimize your campaigns accordingly.
  • Instant Visibility. You’ll get instant visibility. SEO is much more affordable than paid ads, but you won’t get optimal results before three to 12 months. If you’re willing to pay the right amount, paid ads make you visible to potential customers right away.
  • Tailored Ads. Most platforms that display paid ads allow you to target certain audiences. You can tailor your ads to a specific gender, location, age group, and other factors. When your ad is only shown to those it concerns, you’re much more likely to increase your conversion rate.
  • Automation. With paid ads, you can also experiment with automation. That means being as hands-on and hands-off as your schedule or budget allows you to be. For instance, you can opt for automated bidding on Google Ads. This will automatically improve your bids to appeal to hosts who are more likely to help reach your advertising goals.

Implementing Paid Advertising Strategies

When working with paid ads, it may be tempting to dive right in. We admire that approach, but it’s even better to first map out a good strategy. This strategy should essentially be your blueprint for marketing your brand. 

A good paid advertising strategy will help you identify:

  • Your goals
  • The product/service you want to advertise
  • Your competitors
  • Your choice of platform
  • Your audience

Here are a few paid advertising strategies that have been successful in the current digital landscape.

Step 1: Choosing the Right Platform

When you get into paid ads, here’s the first thing you’ll ask: what’s the right channel for my business? 

In some cases, one channel is enough to get the job done. In others, you must take a multi-channel approach to reach your goals. Ask yourself these questions before you decide:

  • What channels are my competitors using? 
  • What’s my goal with paid advertising? Paid search ads may target ready-to-buy customers, while display ads raise brand awareness.
  • Where are my potential customers in the market funnel?
  • What is my budget? Microsoft Advertising is a lot cheaper than Google Ads. 
  • Who is my target audience? TikTok is best for Gen Z, Instagram targets millennials, and Facebook caters to Gen X.
Online Ad Platforms

Step 2: Setting Goals

Now, let’s zoom in on those paid ad goals a little. It’s crucial to pinpoint what you want out of your paid ads strategy. You may want more:

  • Website visits
  • Revenue
  • Leads/inquiries
  • Brand awareness
  • Social media followers, and so on. 

Whatever your goal is, it needs to be SMART: Specific, Measurable, Attainable, Relevant, and Timely. That means it’s not enough to just say, “My goal is to improve our conversion rate.” You’ll also need to specify:

  • Which channel’s conversion you want to improve
  • When you need to reach this goal
  • How you’ll reach this goal
  • The specific conversation rate percentage you want to reach

Above all, the goal must be realistic and relevant to your business objectives. For example, there’s no need to track vanity metrics like page views or email subscribers. 

Step 3: Creating Compelling Ads

High-quality paid ads compel customers to want to learn more. Here are some tips to create ads that drive clicks:

  1. Step outside the box. The ad needs to make your customer stop and stare. 
  2. Keep it short and sweet. There’s nothing more important to mention than the pain point and how you’ll improve it for the customer.
  3. Experiment with testimonials and user-generated content. Prospects are a lot more likely to trust the opinions of existing customers. 
  4. When opting for Google Ads, make the most of the assets. Take this opportunity to tell customers more about yourself and take up space in the SERPs. 
  5. Always end with a call to action. Customers don’t want to spend time figuring out what to do after seeing your ad.

Here is an excellent example of paid advertising by Nike:

nike social media marketing example
Nike Paid Advertising

Step 4: Optimizing Your Campaigns

Your paid ad strategy isn’t something to set and forget—it needs constant revision. It’s best to check your campaigns at least once a week to ensure they’re working as expected. 

This is also the chance to run A/B testing. That means creating two versions of the same ad, with minor differences in CTAs or image choices. Run them both to see how audiences respond to each. 

ab test of same ad
A/B Test of the Same Ad: Photo Credit to Jeff Bullas

Step 5: Analyzing Key Metrics

The best thing about paid advertising is how easy it is to track results. Most platforms have robust data analytics and reporting features, which allow you to track your ad’s performance and how people are responding to it. 

So, what should you consider when tracking paid ad KPIs? Let’s look at a few key metrics to measure.

  • Impressions: This is the number of times users have seen your ads. Higher impressions mean your ad is more memorable, and users may have seen it again and again. 
  • Click-Through Rate (CTR): The number of people who saw and clicked on your ad. Interesting and valuable ads have a higher CTR.
  • Cost-Per-Click (CPC): This is the amount you’ll pay each time a user clicks on your ads. Your CPC should be as low as possible.
  • Conversion Rate: This is the percentage of users who clicked on your ad’s CTA. For instance, they may have bought a product or signed up for your newsletter.
  • Return on Ad Spend (ROAS): This is the amount you’ve profited from your paid ad campaign. The higher, the better.

Of course, you don’t need to track all these metrics – just find ones that suit your goals. For instance, track impressions if you want to increase brand awareness. However, the conversion rate is more important to track to generate more leads.

Advanced Ads click tracking in Google Analytics event reports
Ads Analytics. Credits: Advanced Ads

Takeaway

If you haven’t started paid advertising yet, you may be missing out. Around 59% of companies have already increased their Google Ads budget this year, while 84% have upped their TikTok budget. 

You’ll also want to hop on this train if you want to bring the right audience to your doorstep. Find out which paid ad trends work for competitors and get in the game. 

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May 19, 2024

Paid Advertising: Is it Really Worth Your Money?

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The average company spends about 50% of its marketing budget on paid ads. That’s a hefty investment, but the question is, “Is it worth it?” 

If we look at the statistics, global advertising revenue has increased to $763 billion in the last few years. This year, it may even reach $836 billion. So, it’s safe to say companies are deriving tons of value from paid advertising.

Keep reading to learn more about making the most of your paid ad budget with these popular paid advertising examples.

What Is Paid Advertising?

Paid advertising refers to companies paying for an ad space on social media, search engines, or other platforms. It can be in the form of texts, images, photos, videos, or GIFs. There are many different types of paid ads; let’s look at a few common ones.

1. Paid Search Advertising

Paid search advertising means paying for ad space on search engines like Google, Yahoo, Bing, or Ask.com. 

With this type of paid ad, you can choose your custom bid and the keywords you want to appear for. Then, it’s as simple as writing your ad and letting the search engine do the rest. 

Here’s an example from Nespresso that appears for relevant keywords like “coffee pods.” Even though they haven’t earned the #1 spot in the search engine result pages (SERPs) through SEO, the paid ad makes it look like they’re on top. This builds authority, especially on search engines like Google. 

Nespresso Paid Advertising

Your success with paid search advertising depends on how much you’re willing to bid. With enough money, you can even appear before the organic search results. 

2. Paid Social Media Advertising

When it comes to paid advertising, social media is the most lucrative platform. The global market is already at $207 billion, which is only expected to grow. Social media paid advertising refers to paying for ad space on platforms like Facebook, Twitter, Instagram, etc. 

Let’s look at some paid advertising examples on Facebook. 

This sponsored post from Burger will show up on all relevant customers’ newsfeeds and entice them to order the new spicy chicken nuggets. Meanwhile, the convenience “Order Now” button makes the deal even better. The craving would go away for most customers if they had to go through the hassle of finding the restaurant’s website.

Burger King advert on Facebook
Burger King Paid Advertising

Paid social media advertising is a good way to engage potential customers while they’re still in a pleasant mood, catching up with loved ones, or watching their favorite videos. Plus, you can’t doubt its reach – 60% of the population uses social media.

Most importantly, paid advertising on social media allows you to target a niche audience. Most platforms, such as Instagram and Facebook, let you target users by gender, location, age, and other factors. You can opt for images, videos, GIFs, reels, and even just texts to advertize on these platforms.

3. Display Advertising

Display advertising uses images, videos, and text to entice viewers to visit their website. Google Display Ads are the most well-known type.

The Google Display Network boasts two million+ websites and apps on which you can display your ads. Shockingly, these ads can reach up to 90% of all web users. Keep in mind that Google will share your ROI for these ads.

Here’s an example from IE University. 

IE University Paid Advertising

Since display advertising is image-led, it perfectly targets mobile users. They typically don’t have the time to engage with text-based ads, but a quick picture-and-CTA ad will catch their attention. 

Display ads raise brand awareness by repeating the same ads on different platforms. The average person needs to see your brand at least seven times before they buy anything.

4. Video Advertising

Since the pandemic, there’s been a huge spike in the preference for visual content. In fact, video creation is up 29% since last year. 

That’s also why video streaming and content creation apps like YouTube, Instagram, and TikTok have enjoyed a huge surge in views. You’ve probably spent hours watching Reels without realizing it. 

Video advertising places short video ads between your flow of organic content on social media platforms. You can view the ad and scroll past it or click on the CTA to learn more. Video ads are much more engaging than other paid ads because they’re more likely to get your audience’s attention.

Here is an example of Tesco's Video Advertising on YouTube:

How Much Does Paid Advertising Cost?

Paid advertising costs can vary depending on the channel. Let’s look at a few examples. 

  • Google. You can expect to pay anywhere from $100 to $1,000, depending on the SERP ranking you’re going for. It typically costs $2.69 per click and $0.51 to $1000 for each 1000 impressions. It’s quite pricey, but you can expect an 800% ROI on average
  • Bing. Bing typically charges $1.54 per click, which is 33% cheaper than Google Ads. However, it doesn’t have the same reach, so you can’t expect a good ROI.  
  • Facebook. Facebook paid advertising may cost around $1 to $500 monthly, depending on your ad specifics. Some companies even spend a monthly $3,000 on their Facebook ad campaigns. You can expect a 200-500% ROI
  • Instagram. Instagram ads cost around $0.25 per click, $4.00 per 1000 impressions, and $0.08 per engagement. That’s pretty affordable, considering the app’s incredible reach. 
  • TikTok. TikTok is the best place to reach your Gen Z audience. Its average CPM is $9.16. Other than that, you can expect to pay $0.02 per click.
  • LinkedIn. LinkedIn paid advertising costs about $2 to $3 per click, which is far from cheap. They also charge $8 per 1000 impressions and $0.50 per send for sponsored inMail campaigns. 

Benefits of Paid Advertising

Now that we know the different types of paid advertising, let’s explore its benefits. 

  • More Control. With paid ads, you have much more control over what you put out there. Meanwhile, if you opt for a press release, the publication may edit the ad to suit its specific tone of voice. 
  • Detailed Analytics. Paid ads also allow you to measure results via detailed analytics. This way, you can see just how your ads are performing. Some platforms even give you a quality score so you can optimize your campaigns accordingly.
  • Instant Visibility. You’ll get instant visibility. SEO is much more affordable than paid ads, but you won’t get optimal results before three to 12 months. If you’re willing to pay the right amount, paid ads make you visible to potential customers right away.
  • Tailored Ads. Most platforms that display paid ads allow you to target certain audiences. You can tailor your ads to a specific gender, location, age group, and other factors. When your ad is only shown to those it concerns, you’re much more likely to increase your conversion rate.
  • Automation. With paid ads, you can also experiment with automation. That means being as hands-on and hands-off as your schedule or budget allows you to be. For instance, you can opt for automated bidding on Google Ads. This will automatically improve your bids to appeal to hosts who are more likely to help reach your advertising goals.

Implementing Paid Advertising Strategies

When working with paid ads, it may be tempting to dive right in. We admire that approach, but it’s even better to first map out a good strategy. This strategy should essentially be your blueprint for marketing your brand. 

A good paid advertising strategy will help you identify:

  • Your goals
  • The product/service you want to advertise
  • Your competitors
  • Your choice of platform
  • Your audience

Here are a few paid advertising strategies that have been successful in the current digital landscape.

Step 1: Choosing the Right Platform

When you get into paid ads, here’s the first thing you’ll ask: what’s the right channel for my business? 

In some cases, one channel is enough to get the job done. In others, you must take a multi-channel approach to reach your goals. Ask yourself these questions before you decide:

  • What channels are my competitors using? 
  • What’s my goal with paid advertising? Paid search ads may target ready-to-buy customers, while display ads raise brand awareness.
  • Where are my potential customers in the market funnel?
  • What is my budget? Microsoft Advertising is a lot cheaper than Google Ads. 
  • Who is my target audience? TikTok is best for Gen Z, Instagram targets millennials, and Facebook caters to Gen X.
Online Ad Platforms

Step 2: Setting Goals

Now, let’s zoom in on those paid ad goals a little. It’s crucial to pinpoint what you want out of your paid ads strategy. You may want more:

  • Website visits
  • Revenue
  • Leads/inquiries
  • Brand awareness
  • Social media followers, and so on. 

Whatever your goal is, it needs to be SMART: Specific, Measurable, Attainable, Relevant, and Timely. That means it’s not enough to just say, “My goal is to improve our conversion rate.” You’ll also need to specify:

  • Which channel’s conversion you want to improve
  • When you need to reach this goal
  • How you’ll reach this goal
  • The specific conversation rate percentage you want to reach

Above all, the goal must be realistic and relevant to your business objectives. For example, there’s no need to track vanity metrics like page views or email subscribers. 

Step 3: Creating Compelling Ads

High-quality paid ads compel customers to want to learn more. Here are some tips to create ads that drive clicks:

  1. Step outside the box. The ad needs to make your customer stop and stare. 
  2. Keep it short and sweet. There’s nothing more important to mention than the pain point and how you’ll improve it for the customer.
  3. Experiment with testimonials and user-generated content. Prospects are a lot more likely to trust the opinions of existing customers. 
  4. When opting for Google Ads, make the most of the assets. Take this opportunity to tell customers more about yourself and take up space in the SERPs. 
  5. Always end with a call to action. Customers don’t want to spend time figuring out what to do after seeing your ad.

Here is an excellent example of paid advertising by Nike:

nike social media marketing example
Nike Paid Advertising

Step 4: Optimizing Your Campaigns

Your paid ad strategy isn’t something to set and forget—it needs constant revision. It’s best to check your campaigns at least once a week to ensure they’re working as expected. 

This is also the chance to run A/B testing. That means creating two versions of the same ad, with minor differences in CTAs or image choices. Run them both to see how audiences respond to each. 

ab test of same ad
A/B Test of the Same Ad: Photo Credit to Jeff Bullas

Step 5: Analyzing Key Metrics

The best thing about paid advertising is how easy it is to track results. Most platforms have robust data analytics and reporting features, which allow you to track your ad’s performance and how people are responding to it. 

So, what should you consider when tracking paid ad KPIs? Let’s look at a few key metrics to measure.

  • Impressions: This is the number of times users have seen your ads. Higher impressions mean your ad is more memorable, and users may have seen it again and again. 
  • Click-Through Rate (CTR): The number of people who saw and clicked on your ad. Interesting and valuable ads have a higher CTR.
  • Cost-Per-Click (CPC): This is the amount you’ll pay each time a user clicks on your ads. Your CPC should be as low as possible.
  • Conversion Rate: This is the percentage of users who clicked on your ad’s CTA. For instance, they may have bought a product or signed up for your newsletter.
  • Return on Ad Spend (ROAS): This is the amount you’ve profited from your paid ad campaign. The higher, the better.

Of course, you don’t need to track all these metrics – just find ones that suit your goals. For instance, track impressions if you want to increase brand awareness. However, the conversion rate is more important to track to generate more leads.

Advanced Ads click tracking in Google Analytics event reports
Ads Analytics. Credits: Advanced Ads

Takeaway

If you haven’t started paid advertising yet, you may be missing out. Around 59% of companies have already increased their Google Ads budget this year, while 84% have upped their TikTok budget. 

You’ll also want to hop on this train if you want to bring the right audience to your doorstep. Find out which paid ad trends work for competitors and get in the game. 

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