Welcome to the World of Online Advertising

When you hear the words 'online advertising,’ it can refer to any of the hundreds of types of digital marketing strategies available today.

From social media ads and influencer marketing to PPC and email campaigns, it can be hard to know where to start with such a broad array of tactics at hand and a limited amount of time (and money).

In this guide, we'll cover the top players in online advertising today, including their platform demographics, who should use each one, and the costs and results you can expect.

This will be a long one, so sit back, grab a cup of your favorite hot beverage, and settle into the state of online ads in 2024.

How successful is online advertising?

Online advertising has become a cornerstone of marketing strategies across industries, demonstrating its effectiveness through substantial engagement and conversion metrics.

According to Statista, global digital advertising spending is expected to reach nearly $796 billion in 2024, a testament to the growing confidence businesses have in online platforms to reach their target audiences.

This investment is not without merit; for example, specific sectors have seen an impressive return on investment (ROI), with some ad platforms like Google claiming 8x return for every dollar spent on their platform. Such statistics underscore the tangible benefits of online advertising, offering not just visibility but measurable financial returns.

Benefits of online advertising

Given that the average person spends 7 hours of their day online, the potential to capture attention through digital platforms is unparalleled compared to traditional methods, and comes with several notable benefits for businesses:

• Targeted advertising: Digital platforms allow for precise targeting based on demographics, interests, behaviors, and more, while traditional methods offer limited targeting options.
• Cost-effectiveness: Generally, online advertising offers a lower cost of entry and a higher ROI, making it accessible for businesses of all sizes.
• Measurability and analytics: Online ads provide real-time data and analytics, allowing advertisers to measure success and optimize campaigns. Traditional methods offer limited immediate feedback or detailed analytics.
• Speed: Online campaigns can be launched quickly, sometimes in a matter of hours, whereas traditional campaigns often require more time for production and placement.

How do I become an online advertiser?

The best thing about online advertising is nearly everyone can do it—but there is a little prep work to do before you dive right in.

Here is my foolproof 8-step method for starting your online advertising journey:

1. Understand your target audience: Before diving into advertising, it's crucial to know who your target audience is. Understanding their demographics, interests, and online behaviors will help you tailor your advertising efforts to reach them more effectively. HubSpot's buyer persona template is a great resource to help you plot everything out.
2. Set clear objectives: Next, you need to decide on your campaign objectives. This can be things like increasing brand awareness, generating leads, or driving sales. You should also find specific KPIs to help you measure your progress towards your goals.
3. Choose the right platforms: Based on your audience research and objectives, select the platforms that will help you reach your target demographic. Note: We'll give an overview of all the platforms, their audience, and use cases below!
4. Develop your creative assets: Create engaging and relevant ads tailored to the platform and your audience. This involves designing graphics, producing videos, or writing compelling ad copy.
5. Determine your ad spend: Next, you need to decide how much to spend on your online advertising efforts. Ad platforms work like an auction house, where advertisers bid against competitors to get their ads seen. Most platforms offer flexible budgeting options, allowing you to start small and scale up based on performance. Note: We'll also cover the costs of the platforms a little later on in this article.
6. Master the platform's advertising tools: Once you found your sweet spot, you need to grow your skills in your platform of choice. Each advertising platform has a unique set of tools (Such as Google Ad Manager and Meta Ads Manager or its Business Suite)and features you can use to create your campaigns. To be truly successful, you need to learn about the advanced features and optimization settings, as the power of the platforms usually lies in these details.
7. Launch your campaign: With everything in place, launch your advertising campaign according to the best practices of that platform.
8. Analyze and optimize: Use the platform's analytics tools to track the performance of your ads. Based on this data, make informed adjustments to your campaigns to improve their effectiveness. This could involve tweaking ad copy, adjusting targeting settings, or reallocating your budget.

Now that you know how to go about advertising, let's dive into the 'little details' that can help set your ad campaigns up for success.

What are the different types of online advertising?

Paid search advertising

Paid search ads are targeted advertisements that appear at the top of search engine results pages (SERPs) based on the specific keywords and bids placed by advertisers. Here's a rundown of the top paid search platforms in 2024.

Google, Yahoo, and Bing

While you've likely heard of all 3 search platforms, you wouldn't be surprised to know that Google takes up 91% of the market share in this industry, with its closest competitor, Bing, coming in at an underwhelming 3.8%.

With this in mind, you might be wondering why you'd even bother to use anything BUT Google. In reality, each platform has its advantages and disadvantages.

Google Ads

Advantages:

• Extensive reach: Google is the most widely used search engine, offering advertisers an unparalleled reach to a vast and diverse audience.

Disadvantages:

• High competition: Being the most popular platform, it often has higher keyword competition, leading to increased costs per click.
• Complexity: The options and features can be overwhelming for beginners, requiring a steep learning curve to use.

Bing Ads

Advantages:

• Lower competition and cost: Generally, there is less competition on Bing, which can result in lower CPC and potentially higher ROI for advertisers.
• Integration with Microsoft products: Offers seamless integration with other Microsoft products and platforms, providing unique advertising opportunities within the Microsoft ecosystem.

Disadvantages:

• Smaller Audience: Bing has a smaller market share, which means ads may reach fewer people. While improving, Bing's international reach is not as extensive as Google's, which may limit visibility for more global campaigns.

Yahoo Ads

Advantages:

• Partnership Network: Yahoo's partnership with other search engines and networks can expand the reach of ads beyond just Yahoo's search engine. That being said, Google does this as well with the Display Network, so we can't give this one a clear thumbs up.

Disadvantages:

• Declining market share: Yahoo's search engine has seen a decline in market share over the years, reducing its overall reach compared to Google and Bing.

Social Media Advertising

Social media advertising refers to ads that are placed on social media networks. Let's take a look at the titans in social advertising now.

Facebook

Facebook (now Meta) is one of the most notable social media advertising tools, mainly due to several unique advantages compared to others like their vast user base, detailed targeting options, and diverse ad formats (image, video, carousel, Reel, Story, etc.).

While Facebook's users are primarily on the younger side, its user count vastly outweighs the rest of the social media platforms on the internet as of 2024. This means that you can find most people (including my elderly relatives) on the platform.

Facebook ads work well for a wide spectrum of industries. However, they are especially powerful for B2C companies looking to connect directly with consumers to boost sales, increase brand awareness, or promote app downloads.

The point of contention with Facebook ads largely lies in the usability of the platform. Though you have a wide array of tools and optimization features at hand, this quickly turns into an overwhelming scenario for most marketers and even prohibits them from getting started in the first place.

While Facebook does offer ad courses to help you, it might take around 6 months of studying to be proficient, which is time best spent on other parts of the business.

Luckily, that's where your friends here at Madgicx have your back :)

At Madgicx, we've created a suite of products that make advertising simple and easy:

AI Marketer

Madgicx's AI Marketer is a tool designed to optimize online advertising efforts by auditing ad accounts around the clock, offering data-driven optimization recommendations, and preparing actionable steps for advertisers to implement with ease.

That means no more struggling to understand Facebook analytics tools or sifting through endless tabs of ads and ad sets. It drastically speeds up the workflow by automating tedious tasks, allowing advertisers to focus on strategy and scaling.

Creative Workflow

Creating your ads can be just as time-consuming as analyzing them. To that end, our suite of creation tools (aka the Creative Workflow) can help speed up this process:

• Ad Library - Find ad inspiration from our library of great Meta ads and search by industry, brand, or format. You can save ads to specific boards (Pinterest-style) and share them outside of Madgicx.

• Sparkle - Not a design whiz? Send design briefs to our on-demand design team, Sparkle, straight from the Ad Library and get your creatives in 48 hours.
• Creative Insights - Use our suite of AI-backed tools to determine what ads (and ad elements) are moving the needle for your revenue.

One-Click Report

The One-Click Report offers advertisers an effortless way to create detailed and comprehensive reports across Meta, Google Ads, Google Analytics 4, Shopify, and TikTok in just one click.

From overall business metrics like MER and Blended ROAS, through detailed insights on ad spend to its 19 pre-made drag-and-drop templates, you'd be hard-pressed to find another reporting tool that can do it all.

If you want to get started on your advertising journey, you can try Madgicx at no charge during your 7-day free trial.

Instagram

Compared to Facebook, which blends text updates, links, and media in a more conversational and broad-purpose format, Instagram emphasizes visual storytelling, making it a hub for creativity and aesthetic inspiration.

Unsurprisingly, Instagram is the perfect platform for those targeting Millennial generations and below, as its audience mainly sits in the 18-34-year-old range. Just like Facebook, Instagram serves a broad array of brands in different categories, as long as they can maintain an engaging and relevant creative experience for their target audience.

TikTok

Despite what you may think, TikTok isn't just an app for teens to do weird dance moves over a 30-second soundbite. The platform has about 1.5 billion monthly active users and commanded a whopping 2.3 billion in in-app sales through its shops in 2023, making it a major player in the social media realm.

With this in mind, it's also important to note that legislation is progressing through the United States Senate to remove the app entirely from US app stores. While it's unclear as to the fate of the app in the United States, there's no denying its reach and ability to generate revenue for advertisers.

In terms of audience, the demographic of TikTok is evenly spread through genders, with a crowd around 18-25 years old.

While just about any industry and vertical can benefit from TikTok ads, TikTok's content is video-based, with a heavy swing towards the user-generated content style of people talking directly to their cameras, as you can see above. For this reason, brands that can create a great visual narrative and speak to the younger audience should prioritize this over others.

X (Twitter)

There has never been a more awkward time to write about Twitter (or now X) ads than the present. The acquisition by the current owner, Elon Musk, has been mired in controversy, and several large brands like Apple, IBM, Paramount, and Comcast have stated that they have suspended their X ads entirely.

On the other hand, Manscaped, a men's grooming product, achieved a 52% lower cost per purchase and a 234% higher click-to-purchase rate with X ads, so the platform isn't dead for advertisers just yet.

Twitter's demographic has one of the largest gender gaps of any other platform, with an average of 63% of its users being male, and between the ages of 25-34. If you plan to dabble in X ads, keep in mind that the following industries do particularly well on the platform:

• News and media
• Entertainment
• Technology and software
• Sports and gaming

YouTube

What is there to say about YouTube that can't already be said?

From being an educational resource to learn everything from car repair to digital ads, to even being a replacement for cable TV, YouTube has everything you'd need in video format and is on track to grow to an estimated 933 million users in 2024.

As you might expect, they also capitalize off this traffic with their ad platform.

YouTube ads can appear before a video starts, as a shorter clip that can’t be skipped, or as banners and overlays on the video page itself.

Since YouTube is a vast platform with a diverse audience (and a part of the Google suite), these ads can be highly targeted based on user interests, search history, and viewing behavior, ensuring they reach the right people and are useful for every industry and niche. However, those that offer visually appealing, informative, or entertaining content that matches the platform's primary uses tend to perform the best.

LinkedIn

LinkedIn, aka 'Business Facebook,’ is a popular place for professionals to network, look for jobs, hire employees, and share their opinions about their industry. That being said, it's also a great place to advertise to the professional crowd.

While they feature ad types similar to what we've seen here today, given that the core audience here is professionals, eCommerce ads for things like beauty products or recreation generally don't fit into this setting.

That being said, certain niches and campaign goals are tailor-made for LinkedIn ads, like:

• Recruitment and employment ads
• Ads for higher education or skill enhancement
• Campaigns aimed at generating B2B (business-to-business) leads
• Thought leadership and influencer ads (aimed at business professionals)
• Promoting white papers, case studies, and webinars

As a general rule, anyone with a B2B target audience, or who wants to target those in specific job functions, would benefit from adding LinkedIn to their advertising toolbox.

Pinterest

Some say Pinterest peaked in 2012, but this social platform most known for its mood board-esque layout still commands an impressive 482 million monthly users in 2024.

Though this may not be your first choice for ad platforms due to the decrease in audience size compared to its competitors, an average 2x higher ROAS and 2.3X more efficient CPA might make you take a second glance.

Since their platform skews heavily towards a visual aesthetic, any company that can command an eye-catching visual experience would do well here. Most notably:

• Home dècor and renovations
• eCommerce and retail products
• Fashion and beauty
• Travel and leisure

Snapchat

Snapchat turned the social world on its head when it entered the scene in 2011 by introducing short-lived posts, called 'Snaps', that are removed within 24 hours. Luckily enough for advertisers, the ad platform isn't as short-lived.

The main demographic for Snapchat is those around 15-25 years old (representing around 48% of users), making it a great advertising platform for industries serving the Gen Z crowd, like:

• Tech and gaming
• Fashion and beauty
• Entertainment and media

Though farther down the list in terms of users than others, Snapchat Ads have some neat features like Sponsored Lenses and Geofilters that make it super engaging for brands that want to get in touch with a younger crowd.

Reddit ads

Reddit is a bit different from traditional social platforms, which is more like a giant message board than a highlight reel of your life. People gather in smaller groups (called "subreddits") to talk about pretty much everything under the sun.

Reddit users, on the other hand, are a bit more complicated. Users of the platform are known for trolling marketers, with some Redditors on r/Marketing saying that most advertisers are 'lighting their money on fire' by using the same tactics they do on other ad platforms:

On top of this, Reddit's ad formats are somewhat limited compared to other social media platforms. Advertisers have fewer options for creativity and visual impact, which makes it challenging to stand out and grab users' attention.

Pushing all of that aside, some specific niches would benefit from Reddit ads, like:

• Tech and gaming industries: Given Reddit's user base has a strong interest in technology and gaming, ads related to new gadgets, games, or tech services tend to get a lot of attention and engagement.
• Niche hobbies and interests: From knitting to homebrewing or astronomy, niche markets can benefit immensely from the targeted nature of Reddit ads, reaching enthusiasts who are deeply involved in their specific interests.

While Reddit does have a fantastic platform for finding specific interests, this platform usually requires more research and strategy, and a nuanced creative vision that might steer less savvy advertisers away.

Email advertising

Though social media platforms boast an incredible number of users, fighting the algorithms and getting your content seen without spending a fortune is difficult. For this reason, many businesses have turned to email marketing as an additional revenue channel.

Email marketing is a digital marketing strategy that involves sending emails to a list of contacts who have expressed interest in your brand, product, or service. This could be through signing up for your newsletter, giving their email in return for free shipping or discounts, or entering product giveaways.

While it's a bit more difficult to get someone to give you their personal information, email marketing has some incredible benefits when compared to social advertising:

• Since you're reaching out to people who've already shown interest in your brand, your messages are more likely to be well-received (and convert the reader).
• The need to worry about organic algorithms or platforms falling out of use is negated entirely with email marketing.

While there are many perks to having an email marketing program, using both together in a comprehensive marketing funnel strategy is the best approach here.

Web banner advertising

You may be familiar with seeing ads on social media, but where do the ads you see across the other parts of the web come from? The answer is web banner advertising.

Web banner ads are the digital billboards you see across websites when browsing the internet. These banners can be colorful graphics, animations, or even interactive elements, often placed through what we call display networks.

Facebook, for example, has what's called the Meta Audience Network, where the ads you create inside Ads Manager can be placed inside mobile apps or on other websites entirely. Google has a similar feature, called the Google Display Network, and the same goes for Amazon, Microsoft, and Epom.

This is traditionally done through what's known as programmatic advertising, where the automated bidding and auction system will place your ad on websites it deems a good fit without your manual approval.

Since every platform has its own suite of sites it distributes to, it's hard to give a definitive answer on who banner ads are best for, though products that are easy to 'understand' like retail commodities, mobile games, and similar will always have an easier time than something like a niche B2B product.

If you're unsure about going all in on banner advertising, you can always reach out to websites in your niche and inquire about direct ad placements.

Affiliate marketing

The best thing about finding a new product you adore and recommending it to your friends is getting paid to do so. Thus, the affiliate marketing strategy was born.

Affiliate marketing usually falls under one of these frameworks:

Affiliate programs—Typically this strategy is open to the general public, where someone can use a special code or link to give out when referring a product. A commission is given based on the revenue made from the sale.

Influencer marketing— In this case, a company reaches out to a specific thought leader or influencer in their niche and provides a specific code or link. Depending on the influencer, they can be paid a flat fee, a commission based on sales, or a combination of both. While companies can have more than one influencer, it's usually a closed program only available upon invitation.

The best part of affiliate marketing is that there isn't one good audience for it. If you have happy customers who love your products, running an affiliate program helps increase net new revenue and keeps your current customers coming back for more.

Online advertising costs

While the cost of your paid ads can vary depending on industry, platform, goals, and audience, here is a general overview of some of the costs you can expect.

Facebook and Instagram ads cost

CPM

CPM (or cost per mille) is the cost advertisers pay for every 1,000 views or impressions an ad receives. You can expect an average CPM of $10.41 on Facebook and $10.56 on Instagram.

CPC

CPC or cost per click, is the amount of money spent for every click. Facebook has an average of $0.75 per click, while Instagram is slightly higher at $1.47.

Additional Facebook ads cost benchmarks can be found in this blog post.

Google ads cost

The team at Wordstream found that the average cost per click on Google Ads was $4.22, with a cost per lead of $52.52. 

YouTube ads cost

WebFx found that the average cost of YouTube ads was anywhere from $0.11 – $0.40 per view, with most respondents spending $100-$1,000 per month.

Pinterest ads cost

You can expect to pay up to $0.10 per click, up to $2.00 per conversion, and up to $1.50 per 1,000 impressions for your Pinterest ads as stated by WebFX.

LinkedIn ads cost

A survey by Databox found that the average CPM for LinkedIn was around $26.91 in February 2023, with an average $3.62 CPC.

Twitter (X) ads cost

According to WebFX, X ads cost $0.26 $0.50 per first action for promoted posts and 

$1.01 – $2 per follow for promoted accounts.

TikTok ads cost

According to Varos, the average TikTok ad CPM is around $9.16 as of November 2023. A minimum budget of $500 is required, with a daily minimum budget of $50 at the campaign level and $20 at the ad level.

Concerns about online advertising

Online advertising, while powerful, is not without its challenges and concerns. Some of the most pressing issues include security concerns, privacy issues, spam, and even the effectiveness of your ads over time. Each area poses a unique set of challenges that advertisers must navigate.

• Security and privacy issues: Online advertising often relies on collecting and analyzing user data to target ads effectively. However, this practice raises significant privacy concerns. Users are increasingly wary of how their data is collected, used, and shared, leading to a push for more stringent data protection regulations (e.g., GDPR in Europe and CCPA in California). Advertisers must navigate these regulations carefully, ensuring user data is handled transparently and ethically.
  
  
• Spam: The proliferation of unsolicited ads, especially in email marketing, has led to a significant increase in spam. These unwelcome interruptions can annoy users and harm the reputation of brands associated with spammy practices. Maintaining a balance between reaching out to potential customers and respecting their preferences and privacy is crucial for advertisers to avoid being labeled as spam (and comply with the aforementioned security and privacy laws).
  
  
• Ad fatigue: This phenomenon refers to users becoming so accustomed to seeing ads that they unconsciously ignore them, significantly reducing the effectiveness of these advertising efforts. The saturation of digital ads has led to users developing a sort of immunity to banner ads, and the only cure is to create more engaging ad campaigns that stand out.

Conclusion

Today we've traversed the landscape of ad types, delved into actionable insights for budding advertisers, and unpacked the costs associated with them. Now you're ready to create an online advertising strategy that works for your business, and most importantly, your pockets.