November 29, 2022
November 29, 2022

Online Advertising - Everything There Is to Know (2022)

The past 20+ years have offered a revolution in how people and businesses interact with each other. The Internet has made possible the rise of online advertising, which has allowed businesses of all sizes, particularly small businesses, to reach new and existing customers and drive growth. This blog post will cover the following topics:

  • What is online advertising?

  • What are the types of online advertising? 

  • What are the emerging trends in online advertising?

  • How do you measure the results of online advertising?

  • What kind of online ads can you run on Snapchat?

Man in a meeting pointing to a pie chart on his laptop

What is online advertising?

Online advertising is a form of marketing that businesses use to promote products and services to specific audiences via the Internet. Sometimes referred to as online marketing, Internet advertising, digital advertising, or web advertising, online advertising enables businesses to target current and potential customers with marketing messages. Typically, the goal is to get people to take an action, such as clicking through to a business website.

Online ads appear in many places, including websites, search engines, social media sites, apps, and email, as well as showing on all types of devices, from laptops and desktop computers to tablets and smartphones.

In today’s world, it’s crucial to define your potential customer and create a strategy for reaching them, getting their attention, and converting and retaining them. Many consumers have shifted their habits online, spending more and more time on social media, streaming services, online shopping, and other websites. To that end, online advertising offers a number of benefits that have contributed to its popularity.

  • Wider audiences: Many people in many places can potentially see an online ad.

  • Personalization: Online advertisers can connect with customers in a more targeted way, such as trying to reach people of a specific gender and age range who are interested in certain things in one or more locations.

  • Measurable results: Metrics are readily available to show you how your ads are doing both when they’re running and afterward, and provide a wide array of useful insights to inform future efforts.

  • Savings: The ROI (return on investment) from online advertising can be better than more traditional methods, such as paying someone to hand out flyers, print ads, TV and radio commercials, and billboards.

  • Speed: Getting started with online advertising fundamentals is surprisingly quick, as is getting your marketing campaigns in front of the right people. Once acclimated, businesses can improve their results thanks to the machine learning used by ad platforms.

Getting started with online advertising is typically simple: You create a free business account, decide on the target audience you want to reach and the goal you want to achieve, and spend what you want to get the best results you can. All the while you’re in control of your marketing budget.

In fact, you can do all of that on Snapchat right now.

What are the types of online advertising?

Online advertising offers many ways to reach potential customers. Examples of online advertising include social networking ads, banner ads, search results, email, online classified ads, pop-ups, contextual ads, interstitial ads, and reward ads (common in gaming) — essentially, any marketing promotions appearing in the digital realm.

Many online ad platforms use a bidding process that allows businesses to decide how much they’re willing to spend to reach each person. Most of them also have a default option that lets the ad platform bid on their behalf, which is helpful for business owners who are new to online advertising and want to automate as much of the process as possible.

Each time an ad placement becomes available, the advertising platform runs an auction that includes all bidders vying for that exposure and uses algorithms to determine which ad will occupy that space. The three most prevalent ways to pay for ads in that process are:

  • Cost per Mille (CPM): The advertiser pays based on “impressions” — an impression is typically defined as each time an ad is served to someone — measured in increments of a thousand (aka Mille, the Greek word for one thousand). Of the three, this is the most commonly used.

  • Cost per Click (CPC): The advertiser pays every time a user clicks or taps on one of their ads.

  • Cost per Action (CPA): Advertisers only pay when a specific action — most often a purchase — is taken by someone engaging with their ad.

As businesses become comfortable with online advertising, deciding which method works best for a given objective becomes more obvious and easier to execute. For example, CPM can be useful for building business awareness, because it’s optimized for reaching as many people as possible, while CPC is good for getting website visitors, because it’s optimized for people who are more likely to click a link.

Snapchat’s advertising platform offers many kinds of ad objectives across the traditional sales and marketing funnel, including awareness, consideration, and conversion (such as purchases).

Five examples of Snapchat Ads

What are the emerging trends in online advertising?

The evolution of online advertising is dependent on advances in technology and inevitable changes in consumer behavior. Successful advertisers typically adjust their strategies to align with the market’s ever-shifting trends so they can make the most of their investments.

The latest trends dominating the current advertising environment include:

  • Artificial intelligence (AI) & machine learning: Artificial intelligence and machine learning are revolutionizing advertising like nothing before, not only minimizing guesswork and uncertainty, but also adding real-time data-driven structure to business advertising strategies.

    Because digital advertising is algorithm-driven, businesses should be patient when they first launch an ad. Most advertising platforms, including Snapchat, have a learning phase after an ad is published.

    During that time, machine learning determines what kinds of people in the advertiser’s target audience are more receptive to the ad, so the delivery system can show it to more people like them. Snapchat calls it the exploration phase, and we recommend running an ad for at least 15 days to allow it to work.

  • Video ads and authenticity: Video continues to reign supreme in online advertising, and shorter content can get better results. Recent trends indicate that less-polished videos can also result in better ad performance.

    On Snapchat, we recommend that businesses create videos that are reminiscent of user-generated content (UGC), which typically involves one or more people talking to the camera in an unrehearsed way. We’ve found that’s a better way to relate to the young people who use the platform.

  • Social proof: Businesses benefit more than ever from free word-of-mouth provided by people motivated to support their products and services. That amounts to social proof — evidence that someone is benefiting from a given brand and is thus likely to share their satisfaction with their friends and family, increasing the likelihood of more customers. On a social media network like Snapchat, that can come from people sharing an ad or an organic post.

  • Influencers: Influencers typically command the attention of a large audience, so they’re in a good position to promote a business’s products and services. When an influencer promotes a brand, their followers are more likely to take an interest in it.

    Since the influencer is not speaking directly on behalf of the brand, followers of influencers typically interpret their recommendations as authentic and trustworthy, and thus are more likely to engage and take action.

What kind of online ads can you run on Snapchat?

While the many facets of online advertising can seem daunting, Snapchat makes it easy to set up your ads, get them in front of people who are most likely to take action, and receive the results you want.

In fact, 9 out of 10 young people are on Snapchat1, so if they’re part of your customer base, you should consider using the platform to reach the people who matter to your business.

Snapchat can also help you reach important goals, such as building awareness of your business, gathering sales leads, driving app installs, and getting online sales. It offers multiple ways to target your intended audience, and you can use an image or video that you already have on hand.

You can get started with Snapchat Ads in a matter of minutes. Set and control daily and lifetime spend limits and start and stop your ads anytime.

1 90% of 13-to-24-year-olds in 20+ countries. Snap Inc. internal data Q2 2022. Penetration calculated as MAU divided by 2021 population estimates, per United Nations World Population Prospects, 2022.