The 4 types of online advertising

The whole point of technology is to make more money by spending less money. The internet is no different.

Offline advertising is very risky. You take a risk and if the advertising works, you make money. If the advertising doesn't work, you lose money. But the internet can take all of this risk away.

So it's a shame that more companies are losing money advertising online than are making money, because they are advertising using offline advertising techniques instead using the technology available.

There are basically 4 ways to advertise online, going through a spectrum from most risky, to no risk at all.

If you do not understand all 4 forms of online advertising completely, you might as well just throw your money away. And the same goes for employing an online marketing agency that doesn't understand the 4 types.

Advertising online basically follows the principle that you will advertise on someone else's website, to drive traffic to your website, to achieve an end goal, which may be to generate a sale on an e-commerce shop, to generate an email enquiry, a mailing list signup, or a telephone call.

Old-style, offline-style advertising (newbie advertising/wally advertising)

A significant amount of money is wasted on the first form of online advertising. This is because it is identical to the old-style, offline advertising. You basically pay a fixed fee for your advert to appear on a website for a fixed period of time.

This form of advertising does't really have a name, but you could call it newbie advertising, or wally advertising. It's advertising for people who really don't "get" the internet. The websites that offer this form of advertising are frequently con artists or cowboys, or people that equally don't get the internet.

There is very little point in advertising online like this. You are taking all of the risk and the company displaying your ad is taking no risk at all. You might as well stick to offline advertising, you're more likely to make a sensible decision about exactly where to advertise if you stick to offline advertising this way.

You've taken a huge risk betting on your own business, why should you take another risk betting on someone else's?

A lot of companies selling this form of advertising are cowboys because they give huge visitor numbers to justify advertising on their site. This includes companies like yell.com who really don't get it. In short, it doesn't matter how many thousands, or millions, of visitors they get each month. The only thing that really matters here is the quality of visitors which they get, and only you can be the judge of that.

Sometimes, this form of advertising is justified, but only if you have a specific reason for advertising on a specific website that doesn't offer any of the other advertising methods. And if you are absolutely certain that it is going to work.

CPM

A slightly better way to advertise is call CPM, or cost per mille, which means that rather than paying for a fixed period of time that your advert will be displayed, you pay for a fixed number of times that your advert will be displayed. This number is usually a multiple of 1,000 and you pay per thousand, or "per mille".

This takes a little bit of the risk out of the advertising because if the advert isn't displayed to the numbers of people they claimed it would be, then it doesn't cost you for the people who never saw your advert.

However, you are still taking a risk on whether the advert will generate any clicks through to your website or not.

PPC

Pay-per-click advertising (sometimes called cost per click, CPC) takes away all of this risk, because you are effectively getting your advertising for free. You only pay for the visitors that actually click on the advert and visit your website.

This method is now really starting to use the technological advantages that the internet provides.

This is how advertising on Google works (and Bing and Yahoo). Obviously Google "gets" the internet. Unless you have a specific reason for advertising somewhere using CPM (or newbie advertising) then this should be the minimum default requirement for your online marketing campaigns.

Find out about our PPC campaign management service.

Obviously, this isn't just restricted to search engine advertising. There are many other websites where you can advertise using this method.

The only risk you are taking here is that once the visitor reaches your website, you are hoping to convert them into a lead/enquiry or sale.

Affiliate marketing

The last form of advertising removes even this risk.

With affiliate marketing, your advert is displayed for free. If a visitor clicks on your advert to visit your site, that is free also. You only pay if that visitor buys from your website, or signs up to your mailing list, or satisfies whatever your predefined goal is.

This is really maximising the technology of the internet to your advantage!

This form of online advertising is the internet's worst kept secret. All of the biggest e-commerce sites run an affiliate marketing campaign, and conversely, all of the smallest don't.

Amazon pioneered this method in the mid 1990s and it is commonly acknowledged that this was a major contributory factor in them becoming the world's largest online retailer; a title they still hold to this day.

This method is most often used for e-commerce websites because it makes sense to offer a commission on actual sales. It's easy to determine the return on investment and you can choose what commission you want to pay.

Find out about our affiliate marketing campaign management service.

This means that you can, of course, offer a tiny commission on sales, because it's entirely up to you what you offer. But you need to offer a high enough commission to attract websites to your affiliate marketing program. If you don't offer enough, they'll promote your competitors instead.

Unlike most web design agencies, OpenGlobal E-commerce understand how the internet works and how to use the technology to its full advantage, rather than just giving it lip service. We choose appropriate marketing strategies for each website, rather than a "one size fits all" approach.

If your web designer doesn't understand these 4 different types of advertising (and the best way to use each one), then you need to move to one that does.

Fast.

Contact us today on 0845 269 9624 before you waste money on the wrong marketing strategy.

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