Why Advertise Online

Advertising is a tried and tested method of growing a business. Selection of an advertising medium plays an important role in determining the effectiveness of an ad campaign. In recent times, online advertising has emerged as the most effective way of reaching the prospects worldwide. Businesses are increasingly advertising on the Internet than ever before. It’s cost-effective, targeted, rapid to implement, and offers a lot of room for creativity and experimentation.

Even if there is only one company in the world offering its products or services, no one will know about it until it advertises. Advertising is a tried and tested way to increase the revenue by informing prospects about a company's offerings. Advertising helps a company stand out from the crowd by creating the product and brand awareness and an effective ad campaign can put a business ahead of its competition.

Online advertising refers to advertising on the Internet. It is different in many ways from traditional advertising media such as TV and print. None of the existing advertising media offers the interactivity of online advertising. Customers can respond to a message, and, in a way that can be measured for its effectiveness. Advertising on the Internet also offers an unprecedented control in targeting the audience to maximize the return on marketing dollars. Compared to advertising in print and television, online advertising through contextual ads, ad panels, and display banners is much cheaper. Because of its ability to elicit action from potential customers, it certainly is more effective. Online advertising offers a unique combination of scalability, cost-effectiveness, targeted marketing and unmatched tracking capabilities. For example, an ad banner combines the benefits of broadcast, print, and direct mail making it a great tool for branding, generating new inquiries, and for driving transactions on a website. Industry-specific directories on the Internet can help businesses reach prospects in hitherto uncharted markets. By advertising online, suppliers can reach buyers when they are actively looking to buy a product or service in the market.

Here are some of the benefits of advertising on the Internet:

Targeted Medium
Unlike broadcast and print media, the Internet allows businesses to target exactly who will see their ads and in what context. Web publications on the Internet serve every conceivable audience, making it easier for advertisers to find a receptive market for their products and services. For example, retailers of consumer products can advertise on portals like Yahoo! to reach their target audience while suppliers to a niche market such as paper industry can use the services of vertical portals to spread their marketing message.

Cost-effective
Online advertising is extremely competitive with other forms of advertising. While ads in print media and on TV could cost a small fortune to businesses, ad space on the Internet search engines, online yellow pages, portals, and directories can be bought at a fraction of that cost.

Scalable
It doesn’t cost much to increase the reach of an online ad campaign. There is no need to print additional copies of a magazine or to create and send direct mail pieces. Expanding the size of the ad campaign can be as easy as buying a text ad or banner space on search engines, directories, and portals.

Tracking and Measurement
On the Internet, advertisers can find out the details about who saw their ads, when, in what context, how many times and so on. Better yet, advertisers receive this information instantly, allowing them to adjust their ad campaign to make it even more effective. This level of unprecedented tracking is not available on any of the traditional ad media.

Ability to Extend Transaction
Traditionally, advertising has been a one-way mechanism. Businesses advertise their products and services and hope the prospects will take a notice of their ad. Apart from techniques such as mail-in coupons inserted into print publications, there was is way for customers to act on the information in the ad. On the Internet, an ad is only a beginning of the sales process. Interested prospects can click on an ad and visit the advertiser's website. Once there, they can access information about the company’s products, make a decision about their purchase, and contact the supplier through an online inquiry form. Other than spreading the marketing messages and generating sales inquiries, online advertising is also effective in:
i) Educating buyers
ii) Gathering market data
iii) Promoting special events
iv) Increasing online registrations

Due to its unparalleled effectiveness, online advertising has gained popularity among marketers, causing a shift in ad spending from offline ad media towards the Internet. Forrester Research, a technology research company, surveyed 126 B2B marketing executives from various industries and concluded:

"Business-to-business (B2B) marketers struggle most to reach decision-makers and measure effectiveness. As a result, they are shifting advertising dollars toward more direct and interactive tactics - supplementing sales forces with higher spending on e-mail, direct mail, and online advertising."

The trend of spending more on the Internet compared to offline media is expected to continue as more and more businesses discover the benefits of advertising online.

For many people outside of marketing circles, online marketing means putting up a website, sending out e-mails to prospects, and buying banner ads. However, the times have changed. There is now a host of options available to businesses. They need to make a choice based on which advertising option best suits their marketing needs without escalating the expenses.

For advertising options on the Internet, there is no such thing as the best choice. Selection of an advertising option will depend on several factors such as target audience, advertising budget, target return on investment (ROI), and the business owner’s personal experience and preferences. However, there are rules of thumb that can help in deciding where to advertise and presented below is a brief summary:

Search Engines
Contextual text or banner ads on search engines such as Google and Yahoo! help businesses advertise their products and services on the Internet. When a person searching the Net enters a search term, relevant text ads appear by the side of search results. A click on the contextual ad takes the visitor to the advertiser’s website.

In general, search engine marketing is good for businesses that sell consumer goods (B2C) as well as the businesses that sell to other businesses (B2B) exclusively.

Search engine advertising has a potential of providing an excellent return on investment as the pay-per-click pricing model makes sure advertisers pay only when their ads are clicked. However, search engine advertising could be expensive too as there is a competition for popular keywords. For expensive keywords, the cost-per-click could range from $5 to $50. Additionally, if frivolous web surfers, or worse still, the competitors click on the ads, the whole advertising campaign could go off-track with negative ROI. Another drawback of search engine marketing is the time taken to manage pay-per-click ad campaign, as unmanaged campaigns could turn either expensive or ineffective.

Online Yellow Pages
For businesses selling in a limited geographical area such as a city online yellow pages, offer the same benefits as paper yellow pages. With more people searching online for products and services, it makes sense for small businesses to advertise in online yellow pages.

Portals
On horizontal portals such as Yahoo!, MSN, and AOL, businesses can advertise in front of the desired demographics. Banners and text ads can be run on different sections of portals such as current affairs, sports, weather, etc. Most advertisers on these portals are companies selling consumer durables and non-durable goods. Without compelling reasons, advertising on horizontal portals may not be a good idea for B2B marketers.

Vertical Directories and Vortals
Vertical directories and vortals (vertical portals) are websites that cater to a niche industry or market segment such as paper industry. They provide a targeted advertisement medium to businesses, as visitors to these websites are mostly the industry insiders. Inquiries generated in response to ads on these sites are highly qualified and targeted.

Businesses selling their products or services in a niche industry segment should seriously consider advertising on vertical directories and vortals for maximum visibility and better a return on investment. When looking to advertise in directories, it is advisable to go for fixed price listing than the pay-per-click ads as for pay-per-click listing, the click-fraud or frivolous clicks can make the ad campaign expensive.

Conclusion

With Internet dominating the personal and business activities alike, online advertising is growing in popularity, as it brings measurable and tangible results at lower expenses than the traditional media such as print and TV. Additionally, the Internet advertising has changed the dynamics of selling. Now, buyers can quickly access much of the information on the Internet and shortlist potential suppliers before deciding about their purchase. Consequently, companies failing to reach buyers on the Internet, risk losing a substantial amount of business to their competitors.

There are several options available for advertising on the Internet and businesses should choose one or more of them keeping their target market and advertising budget in mind. While advertising on search engines is an attractive option, industry-specific portals present a unique opportunity to gain visibility and generate qualified sales inquiries without spending a fortune on ad campaigns.

Glossary

B2B
Acronym for Business-to-Business

B2C
Acronym for Business-to-Consumer

Banner / Display Ads
A banner is an advertisement in the form of a graphic image that typically runs across a Web page or is positioned in a margin or other space reserved for ads. Banner ads are usually Graphics Interchange Format (GIF) images. Besides adhering to size, many websites limit the size of the file to a certain number of bytes so the file will display quickly.

Cost-per-click (CPC)
An Internet marketing formula used to price online advertisements. Advertisers pay Internet publishers based on the number of clicks a specific ad gets.

Portal
A website featuring a suite of commonly used services, serving as a starting point and frequent gateway to the Web. Web portal services often include a search engine or directory, news, e-mail, stock quotes, maps, forums, chat, shopping, and options for customization. Portals are one-stop destinations for advertisers and marketers offering an endless variety of advertising choices.

Vortal
Vortal is a vertical or niche portal. On the Web, a vortal is a website that provides a gateway to information related to a vertical industry such as paper, steel, health care, insurance, or automobiles. (A vertical industry is one that is focused on a relatively narrow range of goods and services, whereas a horizontal industry is one that aims to produce a wide range of goods and services. Because most industries tend to specialize, most industries tend to be vertical.)