A recent study by PR Newswire reports that the global digital paid advertising market was valued at $350 billion in 2020 and is expected to reach $786.2 billion by 2026.
As the world of advertising is growing at an unprecedented pace, digital paid media has become the cornerstone of modern marketing strategies. Today, businesses invest significant portions of their marketing budget in paid media to reach their target audience and grow their customer base. Therefore, to remain profitable, companies must ensure that their paid media investments generate substantial returns.
However, with various channels available- from search engines, social media platforms, display networks, and more, the challenge lies in knowing where to focus the efforts, which channels to invest in, and how to measure the effectiveness of the campaigns.
To overcome this issue, businesses must strategically set goals, develop scalable content plans and optimise advertising efforts. This blog will provide you with practical insights and tips to build a cost-effective paid media strategy that ensures high returns and keeps your business ahead of the competition.
So, let’s dive in and unlock the power of ROI-driven paid media!
1. Paid Media: Definition & Types
What is Paid Media?
Paid media refers to any form of advertising a business undertakes to promote its products or services across a wide range of digital channels. It involves paying for the placement of promotional content on platforms including search engines, social media platforms, display networks, video platforms, and more.
Paid advertising campaigns can be highly effective when implemented correctly and monitored properly. It allows businesses to reach their target audience, drive traffic to a website, increase brand awareness, generate leads or sales, and achieve a strong return on investment (ROI).
As we dive more into how paid media works, let’s first understand the various types of paid media that can benefit your business.
Types of Paid Media Platforms
1.1 Search Engine Ads
When users add a query in a search engine or search for specific keywords, these ads are displayed at the top or bottom of the search engine results page (SERP). The two most popular search engines for advertising are Google and Microsoft.
A. Google Ads
Here are some examples of the most common types of Google Ads:
- Search Ads– These are text-based ads displayed at the top or bottom of the search engine results page when a user searches for a particular keyword or phrase.
- Sponsored ads– These can be in the form of images, videos, or text and appear on various websites and apps that are part of the Google Display Network.
- Google Shopping– These ads are for e-commerce businesses that display product images, prices, and other details when a user searches for a product on Google.
B. Microsoft Ads
Here are some examples of the most common types of Bing Ads:
- Search ads– These ads are like Google’s search ads that appear at the top or bottom of the Bing search results page when a user searches for a keyword or phrase.
- Microsoft Audience Network ads– These are image/text-based native ads published in Microsoft Audience Network such as MSN, Outlook.com, etc.
- Bing Shopping ads– These are image-based ads that showcase product details, prices, and purchase links when users search for specific products.
1.2 Social Media Ads
Social media ads are offering businesses a massive audience that can be effectively reached through paid advertising on social media platforms. Given the rising popularity, let’s take a closer look at how ads work on some of the most widely used social media platforms –
- LinkedIn- LinkedIn offers more detailed targeting criteria for professionals in specific niches or job titles, company size, industry, and other demographic data. It allows to create and display LinkedIn ads in various formats, such as sponsored content, sponsored InMail, and display ads.
- Facebook- Facebook ad options include photo ads, video ads, canvas ads, carousel ads, Messenger ads, and more. These ads can target specific audiences based on their demographics, interests, behaviour, and location.
- Instagram- With Instagram ads, you can target your ideal audience with options similar to Facebook, including photo ads, video ads, carousel ads, and collection ads. You also have the option to post ads to your company’s main Instagram feed and stories.
- Twitter- Twitter Ads allow businesses to create and display ads in various formats, such as promoted tweets that appear in users’ feeds, In-stream/promoted video ads, and direct message cards to spark conversations.
- YouTube– YouTube offers a range of video ad formats that can be displayed before, during, or after a YouTube video (Unskippable video ads & Bumper ads), as well as in search results or on the YouTube homepage.
1.3 Display Ads
Display ads are a type of online advertising that consists of graphical ads or images displayed on websites, mobile apps, etc., to promote products or services. Most display advertising uses square, landscape, or skyscraper formats with ad copy and a strong (CTA) that entices users to click.
There are several types of display ads, including:
- Banner Ads – These are static or animated graphical ads displayed on websites or mobile apps, often used to promote products or services, generate leads, or drive traffic to the advertiser’s website or landing page.
- Native Ads – These ads are designed to blend in with the website or platform’s content, often appearing as recommended content, sponsored search results, or promoted social media posts.
- Video Ads – Display ads with video content often engage audiences by communicating a specific message, asking a thought-provoking question, or introducing a product or service.
- Pop-up Ads – Pop-up ads typically appear as small, square boxes on a website, encouraging users to take specific actions, such as signing up for a newsletter or filling out a form.
- Retargeting Ads – These ads target users who have previously interacted with the advertiser’s website or app but have not completed the desired action. These ads can appear as banner ads, native ads, or video ads.
Now that we’ve discussed the various types of paid media, let’s dive straight into its key benefits:
2. Understanding the Value of ROI-Driven Paid Media
In 2022, American businesses spent nearly 153 billion dollars on paid advertising, and the spending is projected to increase by approximately 27 percent- Statista
Now, why are these businesses going all-in on paid media?
That’s because investing in it drives a plethora of benefits! Let’s look at some of the major ones below.
1. Measurable results
One of the primary benefits of paid media is that it is highly measurable. You can track exactly how much money you’re spending, how many people have seen your ads, and how many of those took any action. Further, you can identify outperforming and under-performing ads and adjust your strategy to maximise the ROI.
2. Better control over advertising spend
Paid media allows you to set daily, weekly, or monthly budgets and target specific keywords, search terms, demographics, etc. By doing so, businesses can strategically allocate their campaign budget, analyse the returns generated from paid media spending, and optimise them based on the results. Further, this also helps reduce wasteful expenses and boosts returns on your advertising budget.
3. Higher conversion rates
Paid media allows businesses to target specific audiences more likely to be interested in the products or services. By utilising advanced targeting options, such as demographic filters, geographic location, interests, and behaviour, businesses can ensure that their ads reach the right people at the right time. As a result, the conversion rates, or the percentage of leads that turn into actual customers, tend to be higher than other marketing methods.
4. Precise targeting
Paid media platforms offer advanced targeting capabilities that enable businesses to reach their desired audience with precision. For example, on social media platforms like Facebook or LinkedIn, one can define their audience based on age, gender, location, job title, interests, etc. This way, you can reach the target audience most likely to be interested in your product or service, ultimately driving higher conversion rates and ROI.
5. Increased brand awareness
According to SEO Tribunal’s recent study, paid media ads can potentially increase brand awareness by 80%.
Paid media can make your brand more visible across different platforms and in front of a larger audience, thereby helping your business establish a strong online presence. This increased exposure can lead to greater brand recognition and, ultimately, more customers
4. Essential KPIs for Your Paid Media Initiatives
Do you often find it challenging to measure the effectiveness of the ads?
Have you ever experienced low ROI despite spending a lot on ads?
This is where understanding the right Key Performance Indicators (KPIs) for your business is essential. Enlisted below are some critical KPIs for your paid media initiatives:
1. Return on Ad Spend (ROAS):
ROAS is a vital KPI that measures the revenue generated in relation to the cost of advertising. Higher ROAS values indicate a more profitable campaign, while lower values indicate less efficient ad spending.
ROAS = Revenue Generated / Cost of Advertising
2. Cost per acquisition (CPA):
t is a critical KPI that calculates the cost of acquiring a new customer through an ad campaign. It helps determine the expenses associated with each customer’s acquisition and assess the return on investment (ROI) of marketing efforts.
CPA = Total Cost of Campaign / Number of Acquisitions
3. Conversion rate (CR):
It measures the percentage of users who complete a desired action on a website after clicking on an ad. It could be filling out a form, subscribing to a newsletter, downloading an e-book, or making a purchase. A higher conversion rate signifies that the ad campaign drives relevant website traffic.
Conversion Rate = (Number of Conversions / Total Website Visitors) x 100
4. Cost per Click (CPC):
It refers to the amount of money an advertiser pays for each click on their ad. A lower CPC generally indicates more efficient spending and better value for the advertiser.
Cost per Click = Total Cost of Campaign / Number of Clicks
5. Click-Through Rate (CTR):
It represents the percentage of people who click on an ad after viewing it. A higher CTR indicates that your ad is relevant and engaging to the target audience.
Click-Through-Rate = (Total Clicks / Total Impressions) X 100
6. Social Media Engagement:
It measures the number of likes, comments, shares, and other interactions on social media ads. It provides insights into the level of engagement the ads generate and helps optimise ad performance.
Engagement = (Total Impressions / Followers) x 100
7. Impressions & Reach:
Impression refers to the number of times an ad or content is displayed or shown to an audience. If the same individual sees the ad multiple times, each instance counts as a separate impression.
Impressions = Total number of times the ad or content is displayed or shown
Reach represents the unique number of individuals or users exposed to an ad or content within a specific period.
Total Reach = (Number of Impressions) / (Frequency)
In this formula, frequency refers to the average number of times an individual is exposed to the ads.
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Now that we’ve explored various KPIs, let’s move on to the steps to creating an effective paid media strategy.
5. Steps to Build ROI-Driven Paid Media Strategy
Whether you’re just starting a business or have been around for a while and looking to expand your customer base, implementing paid advertising marketing helps in business growth and success.
Enlisted below are six vital steps to building a successful paid media strategy:
1. Define Goals & KPIs
When you start building a paid media strategy for any platform, the first thing you should do is define your objective. Start by answering questions such as:
- What do you want to accomplish with paid media?
- What KPIs are most important to your business?
- Are you looking to build brand awareness, foster social engagement, increase website traffic, generate more leads, or all the above objectives?
For example, a B2B service provider of a marketing automation tool may set a goal to increase the number of leads generated from paid advertising campaigns by 30% in the next three months. To make this a SMART goal, the business needs to ensure that it is Specific- Increase the number of leads, Measurable– Attain a 30% increase, Achievable- Use data-driven insights to optimise ad targeting, and ad copies to increase conversions, Relevant- This will help grow the customer base and revenue, and Time-bound- Within the next six months.
By setting a SMART goal like this, businesses can align their paid media strategy with their overall business objectives, track their progress, and make data-driven decisions to improve their results.
2. Understand your Target Audience
To develop an effective paid media strategy, businesses must thoroughly understand their target audience. One way to achieve this is by creating buyer/audience personas that represent their ideal customers. The business should ask questions such as:
- What are the common characteristics of the ideal customer, such as demographic details, interests, and behavioural traits?
- What are their pain points, challenges, and motivations for purchasing your product/service?
Using these insights, a detailed profile of the ideal buyer persona can be created. For instance, let’s consider John, a 35-year-old marketing manager at a medium-sized software company, is displeased with time-consuming manual processes. He seeks a marketing automation solution to streamline his team’s workflow and boost productivity. By developing an ideal buyer persona like John, the B2B service provider business can tailor their advertising campaigns and messaging to target and attract the ideal customers.
3. Perform Competitor Analysis
Performing a competitor analysis is another important step in developing an effective paid media strategy. This involves doing a SWOT analysis and examining the strengths and weaknesses of multiple competitors in the market. For example, the B2B service provider may research and analyse the marketing automation tools offered by their competitors.
This includes pricing strategies, features offered, target audience, and overall marketing approach. Additionally, the business can also analyse its competitors’ paid advertising campaigns to gain insights into their messaging, ad formats, keywords, and targeting strategies. This way, companies can make informed decisions about their own paid media strategy and optimise campaigns for maximum effectiveness.
4. Develop an Effective Paid Media Strategy
Based on the information gathered from the above steps, companies can now proceed to develop an effective paid media strategy. Using the example of a B2B service provider, the focus should be on channels that can reach their ideal buyer personas, such as LinkedIn ads and Google AdWords, which offer targeting options relevant to B2B businesses.
Once the channels have been selected, the next step is to finalise the budget and bidding strategy. Then, the business should focus on understanding what sets them apart from competitors and create messages highlighting their unique value proposition (USP). This approach will differentiate them from competitors, effectively help reach their target audience, and increase conversions.
5. Implement Your Strategy
Once your strategy is developed, it’s time to implement it by creating and launching your paid media campaigns. To get started, developing a paid media ads calendar or schedule that outlines when and where your ads will run is essential. This helps ensure your ads are strategically timed and placed for maximum impact.
As you implement your strategy across your chosen channels and ad formats, it’s vital to ensure that your creative assets are uniform across all channels. This will help you maintain brand consistency and improve the effectiveness of your campaigns.
6. Monitor and Optimise
To ensure that paid media campaigns are effective and deliver high ROI, monitoring and optimising them continuously is crucial. This involves analysing KPIs like click-through rates, conversion rates, and cost per acquisition to evaluate targeting effectiveness. Tracking these metrics helps you identify areas for improvement and optimise campaigns.
Businesses can also use A/B testing to experiment with different ad copies and designs to determine what works best. Finally, through continuous monitoring and optimisation, the B2B service provider can improve their campaign’s performance and achieve their goal of increasing the number of leads generated from paid advertising campaigns.
By following these steps, you can create a powerful and efficient paid media campaign that drives results for your business.
6. How can a Digital Marketing Company Help Maximise ROI from Paid Media Advertising?
A digital marketing agency offers customised paid media strategies tailored to your specific business goals and target audience. From refining messaging to adjusting bids and budgets, they ensure you maximise your ROI and achieve the desired outcomes.
Growth Ganik is a leading full-stack marketing agency that is armed with deep knowledge of the latest trends and best practices in paid media advertising to keep you ahead of the competition and drive remarkable growth for your business.
Contact us today to schedule a consultation with our digital marketing professionals and discover how our expertise can help you achieve your business objectives.
