• A Short Primer on Online Advertising

    by  • January 20, 2012 • General, Marketing

    Where to spend advertising dollars?

    Another announcement of the impending crowning of online advertising as king came out yesterday. Obviously, this is not the first time such articles have been written, but none the less, if online advertising has not already surpassed print advertising expenditures, it will very soon.

    So what does that mean for a business unsure of where to spend their marketing dollars? Unsure of tug of war between the various online sources? Actually a bit of common general business acumen and an understanding of the basics behind print and online advertising is all you need.

    Although I am not ‘Madison Avenue‘ – I have managed marketing shifts to online mediums in 4 different organizations of medium size (300+ employees) to small (11-26 employee) companies as well as a real estate trade organization. I’ll try to lay out in broad terms how I strategically look at this process and decision and how I explain online marketing to other stakeholders.

    Review and create a customer/client profile:

    Print marketers will all say that print marketing is not dead or diminishing in its returns. While those sorts of statements are generally not true – they do hold true for certain demographic customer profiles. Before you embark on any marketing or advertising campaign or medium shift you have to know who you are trying to reach.

    Say your typical customer is a senior, print magazines such as the AARP or GuidePost will provide the exposure to your target audience better than an online ad. Or possibly a combination of both online and print will reach your target the most. Print marketing expenditures can provide a very good amount of exposure and return. Trade journals for specific specialized industries such as medicine also make sense. Also print ad salespeople are quick to make the point that ‘print advertising drives online sales/conversions’ – while that is probably true in some cases – it is increasingly not the norm (install analytics to your website as referenced below – you can create ways to measure the success of print ads driving prospects to your website).

    On the other side of print advertising, take for example a typical 18-24 year old, your print advertising may not reach them. Newspapers will not provide adequate exposure or return for your target. In fact Pew Research Center published a study on newspaper readership by age group, and as of 2006 18-24 and 25-35 age groups were equally the lowest – dropping about 1% per year. Online advertising (along with much costlier TV and Radio) probably provide better exposure to your targets.

    In short, your target audience will dictate your medium or mix of mediums.

     Ok, so I need to advertise online, there are so many choices:

    Here again, your customer or target profile will help tremendously in determining the online advertising medium(s) you utilize. But also, this is where much of your own common sense and business acumen should come into play. I am not going to get into ‘per-click’ vs ‘per-impression’ because in effect they are both ‘impression’ driven, and it is beyond the charter of this post. With that said, you will need to research and contemplate the before mentioned ‘pers’ prior to launching your online campaigns.

    Online advertising basically is separated into three groups: search, social and display. All three provide superior analytical data to almost any other form of advertising. You can tell when someone clicked on your ad, how long they stayed on your site, where they visited, where they were from, what kind of computer they use, if they converted to a sale (if you have an online ‘shop’), and more and more. In many ways, the ability to actually measure ROI for ad expenditures makes online a much superior medium for valuation of marketing expenditures.

    Before I jump into the three food groups below, I cannot impress enough the importance of making sure your website is up to date, engaging and is capable of capturing prospects and targets. You should also talk to your web developer about installing analytics on your website. Google provides this for free, but a piece of tracking code needs to be uploaded first.

    Display ads are the ones that the local news’ website has blaring everywhere, or that the local radio station ad rep tells you about each month they come by your office, or even as preludes to YouTube videos. For most small businesses these do not make much sense. Display ads to have some benefits though, and they are increasing their ability to command top dollar every day (currently to the tune of $5billion annually).  They are much more image, video and color friendly – you can catch your viewers’ attention. Display ads are also most similarly priced to their print counterparts. The pricing is based on raw historical viewership or distribution, as well as location of the ad. For example a banner ad is similar to ‘cover 1’ while a sidebar ad would be more similar to a 1/4 page inside. I should also no one large benefit to display ads is the ability to provide brand exposure without actually directing people to your website.

    Social Media advertising is the latest trend. And also the most controversial, mainly because it has been positioned to compete with search based advertising. When debating the merits and discussing social vs search ad placement with stakeholders – I always ask the question ‘if you were looking for or in need of your product or service, how would you go about finding out about providers online?’ Arguments can be made for both sides, but I think the vast majority of the time, Google or a search engine is the first and most relevant stop. One study shows that 66% of social media users ignore the ads and a majority (56%) do not like to buy from ads on social media – this means over half of your target finds your ad to be a disincentive.  That said, social media advertising is a great source of ‘gorilla’ marketing and PR outreach. Many organizations have used it successfully for promotions and ‘coupons.’ The problem here is that often the sales conversions that do result are from existing customers or people with some previous knowledge of your brand. Do you have measurable return, yes, but it is more along the lines of brand maintenance and loyalty opposed to new exposure and new revenues? Just keep this in mind. Social media has another big plus: is it by far the least expensive method of online advertising.

    Search Engine advertising can be best seen on google or bing. When you type in a product or service, a banner like section at the top and a ribbon and classified ads on the side bar are displayed along with the search results. The ads displayed are keyed on your historical search profile and your search keywords – the advertiser believes their product or service to be relevant to you. The benefit here is that you are more likely to reach your target audience when they are looking for you. Like social media advertising, you can also have control over who sees your ad – people in Wisconsin only? Or people who search for keywords that you want to capture? etc, etc. You also have the same analytical data and metrics to track your ads’ effectiveness and conversion rate as well as monitor expenditures. Because you are placing your ads around keywords and your exposure is based off of the relevance to the specific search, often businesses find that search advertising provides them the best measurable response to their ads. That said, unlike display and social media advertising, you do not often have the opportunity to use color, pictures, video – and you miss out on their capacity for branding without redirecting viewers to your website – you are in the ‘sales zone’ where your ad expenditure is trying to capture a searcher and send them to your website, and then your website will do the branding. Although it is best to have a website that is set up for branding as well as capture and conversion – if you utilize a search advertising campaign or heavy mix – your website is the most important factor – as that is most often where your ads will direct or redirect your target.

    As a path forward – I find that the search engine advertising is easier to setup, track and measure. Display and social media can work too, but you must be very engaged, dedicated and confident in your target profiling to realize sustained sales conversions.


    Patrick Sprouse has over a decade of experience in the commercial real estate sector. Mr. Sprouse has held numerous positions in commercial brokerage, real estate technology and executive operations on regional, multi-market and national scales. Currently Mr. Sprouse is providing management and technology consulting service for a private real estate services company based in Washington, DC with over $1.5 billion in 2015 revenue. Mr. Sprouse has an extensive background in business management, sales engineering, project management, software selection and business analysis as well as organizational change and brand management.