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The Basics of Web Advertising

The Basics of Web Advertising

Word of mouth can only get your business so far. Whether you have a brick and mortar location, an online store, or some combination of both, a web ad campaign is a great way to advertise your small business with a modest budget. When starting a new web ad campaign, it is important to understand the basics. In this article, we will outline the basic ways to advertise online and define some of the commonly use phrases.

PPC – Pay Per Click

  • The max amount an advertiser is willing to pay each time a user clicks on their ad

CPC – Cost Per Click

  • The cost of each click an advertiser pays once a user clicks on an ad

CPA – Cost Per Action

  • What the advertiser is willing to pay when their ad click leads to an action like a sale

CPM – Cost Per Thousand

  • The cost for a thousand displays—not the number of clicks

CTR – Cost Through Rate

  • The percentage of the number of views versus the number of clicks

Conversion Rate

  • Used to compare the total number of website visitors to the overall goal of the ad. (sales, subscribers, ect.)

Contextual Advertising

  • Targeted ads such as ads for clothing stores displayed on pages having to do with fashion.

ROI – Return on Investment

  • The percentage of profit versus the cost of running the ad campaign.

There are many sites from which you can launch a web ad campaign. Social media sites such as Facebook and Twitter offer an easy way to target individuals based on certain criteria such as age, gender, and location. The down fall of advertising on sites like those is they tend to have a very low CTR. Conversely, ad campaigns through search engines, such as a Google Ad Word campaign, target ads to users who are already looking for something similar. While they have higher CTRs, Google Ad Word campaigns can have a higher overall cost and a lower conversion rate.

No matter how you choose to advertise your small business, it is worth looking into doing so on the Internet as the risks can be small and the rewards great.

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