How Paid Advertising Works in 2023

As an entrepreneur, you know that in today's business world, the competition is fierce and every business is looking for ways to get ahead of its competitors. One of the best ways to do this is through paid advertising. 
Paid advertising has become an essential part of marketing strategies for businesses of all sizes. It enables them to reach a larger audience — from local to global — and promote their products or services efficiently and effectively through a wide variety of channels in an even greater number of ways.
In this article, we’ll take a comprehensive look at how paid advertising works and its significance in today's digital landscape.

What is Paid Advertising?

Paid advertising, also known as pay-per-click (PPC) advertising, is a form of digital marketing where advertisers pay for their ads to be displayed on various online platforms such as search engines, social media networks, websites, and mobile apps. Advertisers bid on specific keywords and phrases relevant to their products or services, and when users search for those keywords or browse relevant content, the ads appear in various formats using a combination of text, image, and/or video.
The cost of paid advertising varies depending on the competition for the targeted keywords involved, the ad format, and the advertising platform used. Typically, advertisers can set a daily or monthly budget for their ad campaigns and then pay each time a user clicks on their ads (known as pay-per-click) or when the ad is displayed (known as cost-per-impression).
Paid advertising offers many benefits to businesses, including the ability to target specific audiences based on demographics, interests, and behaviors. It also provides measurable results, allows businesses to track their return on investment (ROI), and is an effective way to increase brand awareness, drive website traffic, and generate leads or sales. That being said, paid advertising requires some upfront work to achieve the desired results and avoid wasting resources on ineffective (ie, poorly performing) ad campaigns.

The History of Paid Advertising

Paid advertising has a long history, with some of the earliest examples dating back to ancient civilizations such as Egypt and Greece. These early advertisements took the form of signs and posters promoting goods and services.
In the early 20th century, with the rise of mass media such as newspapers and magazines, paid advertising became more widespread. Companies began using print ads to reach a broader audience and promote their products. With the advent of radio and television in the mid-20th century, paid advertising became even more prominent. Companies started sponsoring radio and television programs and running commercials during breaks.
In the late 1990s and early 2000s, the internet revolutionized the advertising industry outright. The rise of search engines and social media platforms created vast new opportunities for paid advertising, with companies able to target specific audiences based on their interests and behaviors and leveraging evolving technologies to engage and convert them.
From search engines and social media to mobile apps and video platforms, paid advertising has evolved to become a crucial component of modern marketing strategies. Today, paid advertising is a multi-billion dollar industry, with businesses of all sizes using a variety of digital advertising platforms to grow their business and sell their goods.

The Business Benefits of Paid Advertising

One of the primary benefits of paid advertising is that it enables businesses to reach a larger audience than they typically would through organic marketing efforts alone. By paying to have their ads displayed on various digital platforms, brands can increase their visibility and reach potential customers who may not have otherwise been aware of what they have to offer.
Another compelling advantage of paid advertising is that it allows businesses to target specific audiences based on demographics, interests, and behaviors. Using targeting options offered by platforms such as Snapchat for Business, businesses can ensure that their ads are being shown to people who are most likely to be interested in what they have to offer.
Paid advertising is also a highly measurable form of marketing. Advertisers can track the performance of their ad campaigns in real-time, allowing them to see how many clicks, impressions, and conversions their ads are generating. This level of transparency and accountability can help businesses optimize their campaigns and ensure that they’re getting the most out of their advertising budget.
Another benefit of paid advertising is that it can deliver results quickly. Unlike some forms of organic marketing, which can take months or even years to produce results, paid advertising can generate traffic, leads, and sales almost immediately — making it an ideal choice for businesses that want or need to see a return on investment quickly.
Finally, paid advertising can help brands stay competitive in a crowded marketplace. By investing in paid advertising, businesses can ensure that their brand is visible and top-of-mind for potential customers, even in industries with heavy competition. That exposure can help them attract new customers, retain existing ones, and ultimately grow their business.

How to Develop a Paid Advertising Strategy

Developing a successful paid advertising strategy is a critical step in achieving your marketing goals. These key steps pave the way:
  1. Define your objective: Clearly define your advertising objectivebuilding awareness, collecting leads, driving online sales, or increasing app installs.
  2. Identify your target audience: Understanding your target audience is crucial to creating ads that resonate with them. Conduct market research to identify your target audience's demographics, interests, and behaviors.
  3. Choose your advertising platform: Based on your target audience and advertising objectives, choose the advertising platform that best suits your needs, such as Snapchat Ads.
  4. Set your budget: Determine your budget and allocate your resources wisely. Consider the cost of keywords, ad placement, and creative development.
  5. Develop your ad creative: Use your understanding of your target audience to create compelling ad creative that speaks to their needs and desires. Carefully consider the ad format, images and/or video, copy, and call-to-action.
  6. Test and optimize: Monitor your ads' performance and continually test and optimize to improve their effectiveness. Use data to refine your audience targeting, ad creative, and bidding strategy.

How to Build a Successful Paid Advertising Campaign

Building a successful paid advertising campaign requires careful planning, execution, and optimization. Follow these steps when you’re ready to develop yours:
  1. Set your campaign goals: Define your campaign goals and align them with your overall marketing objectives. Determine your target audience, budget, and timeline.
  2. Choose your ad format: Choose the ad format — such as display ads, search ads, video ads, and social media ads — that best suits your campaign goals and target audience.
  3. Create compelling ad creative: Develop ad creative that gets your target audience’s attention, is memorable, aligns with your brand, and offers an easy way for a viewer to engage. Use eye-catching visuals, persuasive copy, and a clear call-to-action.
  4. Choose your targeting options: Use the targeting options available on your chosen advertising platform to reach your desired audience. Consider targeting by location, demographics, interests, behaviors, and more.
  5. Set your bid strategy: Choose the bid strategy that best aligns with your campaign goals and budget. Consider bidding options such as cost-per-click, cost-per-impression, and cost-per-conversion.
  6. Launch and monitor your campaign: Going live with your campaign is just the beginning. Be sure to keep a consistent eye on performance, then use that data to optimize your targeting, ad creative, and bid strategy.

How Snapchat Is an Ideal Platform for Paid Advertising

Why choose Snapchat for your paid advertising?
  1. Younger audience: Snapchat has a predominantly young user base, with over 70% of users under the age of 35.¹ If your target audience is younger, Snapchat is an ideal platform to reach them.
  2. High engagement: Snapchat users are highly engaged, with the average user opening the Snapchat app over 30 times everyday.² This presents a valuable opportunity to capture their attention with paid advertising.
  3. Creative ad formats: Snapchat offers a variety of creative ad formats with a proven history of resonating with the massive Snapchat community, including augmented reality (AR) lenses and filters. These unique ad formats enable brands to engage with users in entertaining, original, interactive ways.
  4. Targeting options: Snapchat offers a range of targeting options, including demographics, interests, behaviors, and more. This allows brands to reach their desired audience with precision.
1 Kepios analysis of data published in Snap Inc.’s advertising tools in January 2023.
2 On average. Snap Inc. internal data Q4 2020. (Full stat: On average, Snapchatters opened Snapchat over 30 times every day in Q4 2020.)