Beginner’s Guide to Paid Advertising Understanding the Basics

What Is Paid Advertising?

Paid advertising is a marketing method where businesses pay to display their ads to specific target audiences. While it can include traditional mediums like TV or radio, it commonly refers to online advertising.

In this model, advertisers bid for ad placement on platforms like Google Ads or Meta Ads, with algorithms determining which ads are shown based on factors like bid amount, ad quality, and user engagement.

The effectiveness of paid ads is influenced by these factors, meaning ads that are more relevant and engaging are prioritized. Paid advertising is an essential component of a holistic marketing strategy, helping businesses communicate their offerings to potential customers.

Benefits of Paid Advertising

Paid advertising provides several advantages for businesses of all sizes:

  1. Instant Traffic: Ads can start driving traffic to your website as soon as they are launched.
  2. Advanced Targeting: Ad platforms allow you to target specific demographics, interests, and behaviors, ensuring your ads reach the right audience.
  3. Performance Measurement: Detailed analytics provided by ad platforms enable you to measure the performance of your ads and make informed decisions based on the data.
  4. Affordability: Paid advertising is often affordable, and even businesses with small budgets can run effective ad campaigns.
  5. Brand Visibility: Paid ads help increase brand visibility, allowing businesses, especially those with limited brand recognition, to reach new audiences.
  6. Variety of Ad Formats: There are various ad formats available, including text ads, display ads, video ads, and more, allowing businesses to choose the format that best suits their goals and target audience.

Types of Paid Ads

Paid ads come in various formats and are displayed across different channels. Here are five main types:

Search Engine Advertising

Search engine advertising involves placing ads on search engine result pages (SERPs) like Google, Bing, and others. These ads appear when users search for specific keywords related to the advertiser’s business.

Here’s a search ad that shows up when users search for “best ai tool”:

One significant benefit of paid search advertising is its granular targeting capabilities. Advertisers can target users at different stages of the marketing funnel, from those unaware of a problem to those actively seeking solutions. Even if users don’t click on the ad, they still see the brand name, increasing brand visibility.

To set up search ads, advertisers use platforms like Google Ads or Microsoft Advertising. They bid on keywords relevant to their business and pay for clicks received. However, bidding on certain keywords can be expensive, especially those indicating high purchase intent, as more advertisers compete for them.

Analyzing competitors can help advertisers optimize their ad strategies. Tools like Semco’s Advertising Research provide insights into competitors’ Google ad strategies, including keywords they bid on and ad copy they use. This information can help advertisers make informed decisions and improve their own campaigns.

To analyze a competitor’s Google ad strategy using Semco’s Advertising Research tool, follow these steps:

Go to the Advertising Research tool in Semco.

Enter your competitor’s domain (e.g., “nike.com”) into the search bar and click “Search.”

Explore the “Positions” tab, which shows you the number of paid keywords bringing users to the site, estimated monthly traffic, and estimated monthly cost.

Below the “Positions” tab, you’ll find the “Paid Search Positions” box, containing the list of keywords your competitor is bidding on. Click “Export” to download this list for further analysis.

Navigate to the “Ads Copies” tab to see the actual ad copies your competitor is using and details on which keywords each ad is targeting.

You can adjust the dates at the top of the tab to view historical ad copies.

Analyze the ad copy and the landing page it leads to, as well as the messaging your competitors use to convert visitors. Use this information to improve your own ad strategy and campaign performance.

Display Advertising

Display advertising is a method of online advertising that involves placing visual advertisements on websites, mobile apps, and social media platforms. These ads can come in various formats, including images, graphics, animations, and videos, and are commonly known as “banner ads.”

One of the key advantages of display advertising is its ability to reach a wide audience and increase brand visibility. Display ads can be targeted based on factors such as demographics, interests, and browsing behavior, allowing advertisers to reach their desired audience effectively.

To run display ads, advertisers can use display ad networks, which are platforms that connect advertisers with websites and apps that are willing to host their ads. Some popular display ad networks include the Google Display Network, Meta’s Audience Network, Yahoo Advertising, and Taboola.

One important strategy in display advertising is retargeting, which involves showing ads to users who have previously visited your website or interacted with your brand. This can help increase brand recall and encourage users to complete a desired action, such as making a purchase.

To succeed in display advertising, it’s essential to understand your competitors’ strategies and performance. Tools like AdClarity can provide valuable insights into competitors’ display, social, and video advertising efforts, including their total advertising spend, campaign performance, popular ad copy and visuals, and more.

By analyzing this data, advertisers can optimize their own display ad campaigns for better results.

Social Media Advertising

Paid social media advertising is a powerful way to reach targeted audiences on platforms like Facebook and TikTok. These platforms gather user data, such as location, age, and interests, allowing advertisers to tailor their ads to specific demographics.

For example, a company selling home gym equipment might target Facebook users who follow fitness pages. This ensures their ads are seen by people likely to be interested in their products.

Social media platforms offer a range of ad formats to suit different campaign goals. For instance, LinkedIn is ideal for B2B ads targeting business professionals, while TikTok is popular for engaging short-form video content.

To launch a paid social advertising campaign, businesses can use platforms like Meta ads (formerly Facebook ads), LinkedIn Ads, and TikTok for Business. These platforms provide tools for creating, targeting, and measuring the performance of ads, helping businesses reach their marketing goals.

Video Advertising

Video advertising is a dynamic strategy that utilizes video content to promote products, services, or brands. These ads are integrated into various platforms like TV, social media, and streaming services, appearing before, during, or after the main video content.

In addition to being embedded within content, video ads can also be standalone, playing within a webpage or social media feed. These ads often feature engaging visuals and compelling narratives to capture viewers’ attention.

For example, Shopify uses YouTube to showcase its products through video ads. This form of advertising is highly effective, with many marketers reporting that video ads have significantly increased brand awareness, website traffic, and sales.

To place video ads, businesses can utilize specialized video advertising platforms. YouTube Advertising allows for ad placements on the YouTube platform, while Meta ads and other social media advertising platforms enable businesses to publish video ads across various social media channels.

Native Advertising

Native advertising is a form of advertising where the ads blend in seamlessly with the surrounding content, appearing as a natural part of the user experience. These ads are designed to match the look, feel, and function of the platform on which they appear, making them less intrusive and more engaging for users.

One of the key advantages of native advertising is its ability to garner more consumer views compared to traditional display ads. Studies have shown that native ads can receive 53% more views than display ads, and they also tend to increase purchase intent among consumers.

To ensure transparency, native ads are typically labeled as “Sponsored,” “Promoted,” “Paid,” or “Ad,” depending on the platform’s guidelines. This labeling helps users distinguish between organic content and paid advertisements.

Native ads can take various forms, depending on the platform and the content they are integrated into. For example, on news websites, native ads may appear as recommended articles under a “Paid Content” or similar section.

Content recommendation platforms like Outbrain and Taboola are commonly used to place native ads, where advertisers provide ad elements like images, descriptions, headlines, and links to their content. These platforms then place the ads on relevant websites based on the target audience’s interests and behaviors.

Overall, native advertising offers a less disruptive and more engaging way for brands to reach their target audience, leading to higher engagement and conversion rates compared to traditional display ads.

Getting Started with Paid Advertising

Paid advertising is a powerful tool for businesses looking to reach their target audiences and drive conversions. By investing in paid advertising, businesses can instantly get their ads in front of highly specific audiences, increasing their chances of acquiring new customers and growing revenue.

You can also start with paid advertising by going through the steps outlined below. 

Set Clear Advertising Goals

Your advertising goals are crucial for determining the most effective ads to use, as well as the metrics to monitor and optimize. For example, if you aim to increase awareness for a new product, you’ll want ads that reach a broad audience. Social media ads can help track reach through impressions and clicks.

On the other hand, if your goal is to drive sales, you’ll focus on optimizing ads for online purchases or lead generation. A lead might be someone who clicks a search ad, visits your site, and then provides their email for an ebook download, becoming part of your email marketing list.

All goals should follow the SMART framework: specific, measurable, actionable, relevant, and time-bound. This approach ensures that your goals are measurable and can be adjusted based on performance.

Here are a few examples of clear and unclear goals.

Identify and Understand Your Target Audience

Understanding your target audience is crucial for effective advertising. Conduct market research to gather and analyze data about your audience, including their demographics, preferences, and behaviors. This information helps you create buyer personas, fictional profiles of your ideal customers.

Utilizing tools like Semrush’s Market Explorer can provide valuable insights into your target audience.

To start out with general market information, choose your business category and press “Research a market.”

By selecting your business category and exploring the “Audience” tab, you can access demographic, socioeconomic, and behavioral data about your audience.

This information can help you understand your audience’s preferences and tailor your advertising strategies accordingly.

The “Social Media” section of Market Explorer shows which social platforms are popular among your target audience.

For example, if you’re in the travel and tourism industry and discover that your audience prefers YouTube, you might consider incorporating YouTube ads into your advertising strategy.

Understanding your audience’s online behavior and preferences is essential for optimizing your paid advertising efforts and selecting the most effective advertising platforms.

Select the Right Advertising Platforms

When selecting the right advertising platform, it’s crucial to consider various factors to ensure your ads are reaching the right audience and achieving your goals. Here are some questions to help guide your decision:

  1. Is your audience spending time on the platform?
  2. Are your competitors advertising there?
  3. Can it help you achieve your advertising goals?
  4. Does the platform offer data to help you analyze your ads’ performance?
  5. Do you have the skills or support needed to use the platform effectively?

Researching online communities can help you understand where your audience spends time. Look for popular social media pages, niche forums, or influencers that your audience follows. Platforms hosting these communities are potential places to advertise.

Monitoring your competitors’ advertising efforts can also provide insights. If your competitors are focusing their ads on a specific platform, it could indicate that your audience is there as well.

Platforms like Google’s Ads Transparency Center and Meta’s Ad Library section can provide details on ads run by your competitors on their platforms.

Consider the effort required to create ads on different platforms. For example, creating video content for YouTube ads may take more time than creating a simple Facebook ad with an image and headline.

If you choose Google Ads, consider taking a course on PPC fundamentals, such as the one offered by Semrush.

Additionally, tools like the Ads Launch Assistant app can help you set up Google Ads campaigns easily by providing keyword suggestions and AI-generated ad copy.

Create Compelling Ad Copy and Creative

Creating effective ads involves refining various elements, including copy, visuals, and calls to action. Here are some tips for crafting compelling ad copy:

  1. Use concise and simple language.
  2. Use language that resonates with your audience.
  3. Incorporate emotional appeals to connect with your audience.
  4. Include persuasive calls to action to encourage action.

It’s also crucial to ensure that your messaging is consistent across your ads and landing pages. Consistency reinforces key selling points and guides visitors toward a desired action, such as making a purchase or signing up for a service.

Visual elements, including images and videos, should also be consistent and on-brand. They should feature high-quality imagery and convey an effective message that aligns with your brand.

For example, Colgate’s ad shown above effectively combines compelling copy with visually appealing imagery to promote its product.

Consider using tools like the AI Writing Assistant app to help you create engaging ad copy that resonates with your audience.

The AI Writing Assistant app offers support in crafting compelling ad copy. To access this feature, navigate to the dashboard, click on “All Tools,” and select “Social Media & Ads.”

From there, choose a tool that aligns with your specific needs, such as “Google Ads Description” for search ads.

Enter relevant details like product descriptions and names. The tool will generate multiple ad descriptions for you to use in your campaigns.

Set a Budget and Bid Strategy

Setting a budget and bidding strategy for your advertising campaigns is crucial for success. There are different approaches you can take, depending on your goals and resources.

  1. Fixed Budget: Some companies have a set monthly budget for advertising, such as $5,000. This fixed budget determines how much you can spend on ads each month.
  2. ROI-Based Budget: You can also set a budget based on your desired return on investment (ROI). For example, if you aim to acquire 50 product trial leads and know that 10 out of 50 leads convert into paying customers, with a profit of $1,000 per customer, your budget should not exceed $10,000 to acquire those 50 leads.
  3. Bidding Strategies: Ad platforms offer various bidding strategies to help you achieve your goals:
    • Target cost per acquisition (CPA) bidding: Get the most conversions for a set dollar amount.
    • Maximize clicks bidding: Get as many clicks as possible for your budget.
    • Maximize conversions bidding: Get as many conversions as possible for your budget.
    • Maximum cost per view bidding: Get as many views as possible for your budget.
  4. Quality Score: Platforms like Google use Quality Score (QS) to determine ad relevance. A higher QS means your ads and landing pages are more relevant to your audience, leading to better ad placement.

Choose a bidding strategy that aligns with your goals. For instance, conversion-focused campaigns should use conversion bidding, while brand awareness campaigns may benefit from maximizing views.

Remember, monitoring and optimizing your ads are essential to ensure they resonate with your audience and achieve your objectives.

Monitor and Optimize Your Campaigns

Most advertising platforms offer analytics features to analyze ad performance. These tools are essential for monitoring the effectiveness of your paid campaigns and identifying which ads are generating positive results, as well as those that are not performing well.

Meta’s Ads Manager is one such platform that provides detailed insights into the performance of your Facebook and Instagram ads. It allows you to track metrics such as views, clicks, and demographic performance, helping you understand how your ads are resonating with your target audience.

In addition to platform-specific tools like Meta’s Ads Manager, you can also use third-party tools like Semrush’s Position Tracking to monitor your campaigns. This tool enables you to track your search rankings for the keywords you are bidding on, providing valuable data that can help you optimize your campaigns for better performance.

To set up tracking for your keywords, follow these steps:

Go to the Position Tracking tool and configure the settings for your campaign.

Click on your project name to access the tracking data.

In the “Landscape” report, you’ll see various data points, including the “Ranking Distribution” and “Keywords” sections.

Click on the figures in the “Keywords” box to view specific keywords you rank for in different positions. You can also click on the “New” and “Lost” figures to see keywords for which your rankings have changed.

After setting up tracking, the next step is to optimize your ads. This can be done automatically or manually.

Automatic optimization occurs when advertising platforms adjust your campaigns based on performance data. For example, Google may show your ad more frequently for a keyword that is driving conversions.

Manual optimization involves identifying underperforming ad elements. For instance, if your social media ads receive many clicks but few conversions, it may indicate that your ad copy resonates with the audience but your landing page needs improvement.

To identify issues and improve performance, consider conducting A/B testing. Test one change in your ads at a time, such as a headline, image, or call to action, while keeping other elements constant.

Wait to see which version performs better and then refine your ads accordingly.

Measure ROI and Performance

Calculating your ROI requires tracking the performance of your ads. There are certain metrics that can help you do this:

  1. Click-through rate (CTR): the percentage of people who click on your ad after seeing it.
  2. Conversion rate: the percentage of users who take a desired action after clicking on your ad, like making a purchase or signing up for a newsletter.
  3. Cost per click (CPC): the average amount you pay every time someone clicks on your ad.
  4. Cost per conversion (or cost per acquisition, CPA): the average cost for each successful conversion or acquisition.
  5. Lifetime value (LTV): refers to the projected revenue from a customer over the entire future relationship.

A simple way to measure ROI is to see if the LTV is significantly higher than the CPA. If it is, it indicates a healthy ROI.

Another way is to use the following ROI formula:

ROI=(Amount gained−Amount spentAmount spent)×100ROI=(Amount spentAmount gained−Amount spent​)×100

For instance, if you spent $1,000 on an advertising campaign that generated $5,000 in revenue, then the ROI calculation would be:

ROI=(5,000−1,0001,000)×100=400%ROI=(1,0005,000−1,000​)×100=400%

This means you made a return of 400% on your initial advertising investment.

ROI is not only about the revenue but also about understanding user behavior and developing a brand that drives long-term value. A good ROI can also be increased reach, engagement, brand awareness, customer feedback, and more.

Launch Your Paid Advertising Campaign

Ready to kickstart your paid advertising campaign? With paid ads, you can swiftly reach your target audience and boost revenue, even with limited budgets.

Choose a platform that aligns with your business goals, implement the strategies outlined, and leverage Semco tools for added support.

Ready to dive in? Sign up for a free trial now and begin your journey to advertising success!