What is paid advertising: types, examples, and features

Alina Ostapenko
18.08.2020280 views Write the first comment
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It is considered that paid ads are the most popular form of online marketing. It is used by 82% of European advertisers who promote online, according to a study of Eurostat. Read what paid ads are and why do you need them. The article will be especially useful for those who are just starting to promote online and choose the appropriate format.

What is paid advertising: types, examples, and features

What are paid ads

Paid advertising is a type of online promotion in which an ad is displayed depending on the content of the page or request entered in the search engine. Users see these ads if their interests intersect with a product or service that is being promoted. Simply saying, paid ads are the placement of advertising messages in relevant content.

You probably see such ads dozens of times a day. These are the first results in search results, next to which there is an “Ad” mark, a banner on separate pages, pop-up videos in the middle of a master class, or a mobile game. Paid advertising appears on social media feeds and it also “pretends” to be linked to other articles on news sites. Consider the classification with specific examples.

Example of paid adExample of paid advertising

Types of paid ads with examples

Each provider of paid ads offers its own classification of these services. We combined their approaches in meaning to make a generalized list of types of paid advertising.

 

By placement

Thematic paid ads. These are ads that appear in designated places on partner sites and partner apps of ad networks. Automated systems make ads “fit” to the context of sites, focusing on the preferences of a particular user and keywords. This includes not only banners but also video ads that autoplay, static images “read more from our partners” on news sites and ads on social media feed.

Types of paid ads with examples
 

Search paid ads are advertisements that appear immediately below the search bar and at the end of the search results. It is shown not only on the main page of the search engine but also on maps, in catalogs, and on third-party sites. This is mostly about text ads, but it may contain images, for example, in the case of Google Merchant Center.

Search paid ads

That’s how typical search ads look like

 

Remarketing/retargeting is a way to remind users about the site that they have visited before. It mostly focuses on the characteristics of the audience but not on the context of the site. Such ads are seen only by people who were previously on the advertiser’s site. Remarketing appears in the form of thematic paid ads, and in search results.

For example, a user watched Puma sneakers in the online store. When he goes to another site, he sees an ad from the same site where he has recently selected shoes. Now Puma sneakers offer him a discount. This increases the likelihood that a “warm” user will buy a product that previously interested him.

Do you know the difference between remarketing and retargeting? Retargeting ads are a form of online targeting advertising. They are shown to people who have already visited your site, for example, a lead or customer. Neil Patel, New York Times bestselling author, sees retargeting as a part of remarketing and calls the second one as an “umbrella term” for marketing. What to discover more information? Check the article “In brief: discover 9 facts about remarketing in three minutes.”

how remarketing works

Native advertising is a “natural” way of promotion via the media. Usually, it is created by the employees of the media, not the client. Due to this, an ad fits the context of the publication, and even for a regular audience is indistinguishable from other materials on the site. 

You can discover several forms of native advertising:

  • in-feed;
  • search ads;
  • recommendation widgets;
  • promoted listings.

Native advertising example

 

Example from the New York Times that promote the subscription to the news

 

By service provider

Media giants are engaged in the placement of paid ads: search services and social networks. Here are a few major providers of paid ads:

  • Google.Ads;
  • Bing Ads;
  • Facebook and Instagram;
  • LinkedIn;
  • Baidu.

What is paid advertising: types, examples, and features

The most popular search engines in the world: five leaders promote paid ads, the latter does not fundamentally use it. At the same time, Yandex leads in Russia and Baidu in China, which should be considered while working with these markets.

 

Cost of paid ads

There is always a little more than you were going to spend on it :) A lot of factors influence the cost of a click, impression, or conversion, up to the time of day. But all of them can be reduced to two denominators:

  • competition;
  • ad quality.

In the paid advertising market, there is a supply-demand relationship — the more advertisers qualify for placement, the more expensive it is. In addition, it’s unprofitable for sites to display irrelevant ads. Therefore, Google, for example, ranks advertising content and reduces the price for ads with a high “Quality score.”

 

Payment forms of paid ads

Some people call paid advertising PPC, in other words, Pay Per Click — in honor of the most common way to pay for it. But paid ads do not only sell clicks. We’ll look at other ways to evaluate a campaign.

  1. CPC, Cost Per Click. This is the cost for user interaction with an ad, transfer by the link.
  2. CPA, Cost Per Action is the cost per conversion. Not only the user’s transfer to the site but also the performance of targeted actions: subscribing, purchasing, filling out a form, etc.
  3. CPV, Cost Per View. This is the cost per ad display to the user. For example, Google Ads uses this parameter to calculate the cost of TrueView videos, and it is also used in campaigns aimed at brand awareness, not conversion.

 

Benefits of paid ads

  1. Paid advertising is relevant for users and can complement the content of an advertising platform. Thus, ZEFR’s study shows that 71% of 8600 participants found paid advertising videos relevant to themselves.
  2. Increase of the conversion. The same study showed that the desire to buy something after viewing paid advertising is 63% higher than with other targeting methods.
  3. Convenient analytics of advertising providers allows you to immediately understand how much and what you pay for. Google Ads and other advertising providers in a real-time report on impressions, clicks, and cost.
  4. Unlike offline advertising, contextual advertising is convenient to edit, you can stop or start it at any time. This does not require long negotiations with anyone.

What is paid advertising: types, examples and features

 

Here’s an example of data from Google Analytics that can be used to analyze the effectiveness of paid ads

 

Weak points of PPC

  1. Paid advertising requires constant attention from the advertiser. You need to monitor the size of bets, launch new ads, change messages when new players enter the market.
  2. Analytics systems of paid ads collect information about online user actions, but cannot track offline without special additional settings. If the specifics of your area involve frequent calls, analytics will not show where the called lead came from. But this gap can be eliminated by using call tracking or call analytics. 
  3. It is difficult to regulate how many times a user sees the same offer, so there is a danger of annoying him. This task is complicated by the prohibition of the storage of cookies on users’ devices. Earlier, we described how to configure the extension for managing cookie rights in compliance with GDPR.

 

Conclusion

  1. Paid advertising is a method of Internet promotion that focuses on the content of the placement site or the user’s request. It allows you to display relevant content and therefore looks organically without causing rejection.
  2. Paid advertising can be divided into the search, thematic, native, and remarketing. 
  3. Although Google is the world leader among search engines, the situation may differ in different countries. Yandex is the leader in Russia, Baidu in China, and Yahoo and Bing are also popular in the US media market. This is important to consider while choosing a site for promotion.
  4. Payment for paid advertising may depend on your settings — the number of clicks on it, conversions, or impressions. 
  5. 71% of the paid advertising audience considers it relevant, according to a ZEFR study. Moreover, the desire to purchase a promoted product or service after viewing paid ads is 63% higher than with other methods of digital promotion.
  6. Paid advertising services show detailed analytics on the interaction of users with the ad. But offline promotion requires additional tools. For example, marketers use call tracking to monitor calls from paid ads.

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