Business Insights: Are Ads Worth The Splurge?
By Leonard Wills
The face of advertising has evolved radically in the past years. Traditional media (TV and radio) used to dominate advertising. Now, advertisers have moved to social media and digital marketing to remain relevant. With people spending more and more time on social media and internet browsing like never before, the shift of advertising from conventional to virtual platforms is anything but inevitable.
With advertisers and business owners rushing to leverage the emerging trend, digital advertising expenditure has steadily increased since its inception. To illustrate, 54% of total ads generated in the US comes from digital ads, with advertisers shelling out a whopping total amount of USD$356 billion in 2020.
A Bit Of History
The first digital advertisement—a banner ad for a telecommunications company—was created in 1994, almost three decades ago. Upon clicking the ad, users were forwarded to the landing page.
Initially, advertisements like these were paid upfront, which then changed to a pay-per-click (PPC) rate, which is a more realistic, viable, and effective mode for advertisers since you only pay when someone clicks on the ad.
Two years later, in 1996, return on investment (ROI) tools for digital campaigns were launched. The tool enabled marketers to track specific details like who clicked the ad by demographics and which platform was visited most. This artificial intelligence (AI)-powered tool allowed marketers and advertisers to analyze the results more scientifically and make informed decisions on succeeding marketing campaigns.
Fast forward to 2006, digital ads become hyper-targeted. This was created to integrate ad content in a more personal and non-intrusive way, so only those interested can see the ad based on their data on social media platforms.
In November 2007, Facebook ads were launched, and since then, the growth of digital advertising has been exponential.
How Much Do Ads Cost?
If you're a business owner, depending on your business type and your budget, you can readily see which ad platform you can put your money on. A 30-second commercial on a major television network costs USD$104,700, which does not include the production cost.
On the other hand, out-of-home (OOH) advertisements, which include billboards and in-flight, stadium, and arena advertising, cost around USD$750-14,000 per month. The cost is staggering, and you don't even know who is viewing your ads.
Digital ads cost considerably less compared to the first two types mentioned. Facebook advertising, on average, costs USD$0.97 per click and USD$7.19 per 1,000 impressions.
Why Spend On Ads?
- Build Brand Awareness
Ads are an effective way to create brand awareness, which refers to the degree that consumers recognize your product or service by its brand name. Ideally, it should familiarize the public with the qualities of your brand that distinguishes it from other brands in the market. Building brand awareness is essential to any business because it could boost your sales.
The unique and targeted strategy of Facebook ads enables you to push your brand to those whose demographics (age, gender, location, income bracket, and hobbies) show they’re more likely to be interested in your product or service. This allows you to reach potential customers with your message about your brand.
- Increase Your Email List
You can effectively build your email list through lead generation ad campaigns. This way, you can create future advertising campaigns through email marketing.
Email marketing is still widely utilized, allowing you to reach thousands of people in one click. This marketing tactic also contributes significantly to brand awareness, customer engagement, customer loyalty, and ultimately, more sales.
- Promote Your Products
Ads can significantly help in launching your company’s new products and promoting existing ones. By disseminating relevant and compelling content, ads connect your products to potential customers. Similarly, this action also increases brand recall, especially if the ad is well thought out and strategically placed.
- Announce Events And Promotions
To ramp up sales, businesses create virtual events to attract more customers to purchase their products or hire their services. Utilizing ads to promote these events is highly effective and can drive traffic to your website or e-commerce platform, which could translate to more online sales.
Ads serve as a reminder to consumers to buy. And if you’ve built a solid reputation over time, consumers are more likely to pick your brand over your competitors.
Conclusion
Whether you have the money for TV, billboard, or digital ads, what's important is how you plan to build your business and how you will strategize to make it happen. Anyone who studied marketing can tell you outright that for a company to expand, retain its current customers, and stay ahead of the competition, strategic advertising is vital.
Learn more about Social Hire
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Our specialists are a company that assists our customers further their presence online by giving online marketing on a regular basis.
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