Have you joined the digital advertising revolution? This year, nearly 25% of all advertising will be online; only television will see greater investment, raking in nearly 40% of all advertising spending. Google has topped many lists for the largest advertising and media companies of 2014. Facebook can be found on many of these lists in the top 20, surrounded by the largest TV and cable companies.

The success that Google and Facebook have achieved comes (in large part) from their ability to create advertising products that are accessible by a large spectrum of advertisers. On both Google and Facebook, it is possible for small businesses to experiment with as little as $100 per month. It is hard to find viable options within traditional TV, print, outdoor, or radio advertising, especially for low budgets.

In addition to giving small businesses a fair playing field, these platforms also offer unprecedented accuracy in targeting audiences based on their interests, intent, and highly specific demographics.


Pay Per Click Services with Google AdWords

Google operates several forms of online advertising, including text ads, product listing ads, and graphic advertisements. Google text ads have the lowest barrier to entry, making it the best place for small to mid-size businesses to start experimenting with paid search marketing.

When searching on Google, you may notice small yellow ad indicators above and/or beside the main search results area. These are Google’s text ads. They consist of 3 lines of text and a website link. They can also be expanded to include phone numbers, user reviews, or additional links. Google AdWords text ads are one of the most effective advertising options for intercepting customers during the buying process. Google search engine users directly state what they are looking for. If your business matches the user’s needs, then you can place an ad on the results page to entice that person to visit your website.

Text ads are purchased using an online bidding system. For a keyword search phrase, such as “Asheville hotels,” an advertiser places a bid for the maximum price they are willing to pay for a click on their ad. The ad will only appear to users searching for that keyword search phrase. Other advertisers also place their bids, but do so without seeing exactly what their competitors have bid. So when a search is completed for “Asheville hotels,” Google sorts all of these bids. The advertiser who bid the most typically gets the first position; however, they only pay the price bid by the second place bidder. The second place bidder pays the price bid by the third highest bidder and this pattern continues for all advertisers on the search results page.

Google text advertising would be relatively simple if the auction and bid price were the only factors that affected advertiser placement. Google also wants to make sure that their users find what they are looking for when they click on an ad. To measure this, Google calculates how long the visitor is gone after they click on an ad, assuming that a longer timeframe away from the search engine indicates a positive user experience on the advertiser’s website. Ads that offer the best value to users are given a higher quality score, which is Google’s assessment of the effectiveness of an ad. Ads with higher quality scores show up more often and can even move up in placement above advertisers with higher bids.

Google also wants to encourage the use of enticing ad copy, which will help maximize their revenues. Since Google only gets paid if ads are clicked on, they reward well-written and well-targeted ads that get clicks. Google calculates the percentage of people who see each ad and who actually click on it. This is called the Click Through Rate or CTR and is found by dividing total ad impressions by total ad clicks. An ad with a higher CTR will make more money for Google than one with a very low click rate, even if the lower click rate ad is willing to pay more per click. For this reason, high click rate ads will get shown more often and in higher positions. If you want learn more about how to improve your AdWords CTR, read through Peter Frisa’s post here.

These factors (and many others) create an exciting challenge for online advertisers looking for quality traffic at the lowest possible price. If you don’t feel confident using AdWords on your own, an online advertising agency can help you execute a strong campaign.


 Google’s Free Online Advertising for Nonprofits

One of the most exciting features of AdWords is the Google Ad Grants Program. Google Ad Grants offers $10,000 per month in free text advertising to nonprofits, excluding those in education and health care.

Qualifying nonprofits can run free Google text ads on any keywords that directly align with their mission statement. Nonprofit organizations that offer classes, products, or entertainment programming can use this free advertising to promote their offerings. In many cases, this free advertising can lead directly to revenue for the organization.


Facebook Targeted Advertising

Facebook knows a lot about its users. While on Facebook, users interact with each other and with businesses that use the platform for communications. Users indicate what they are interested in by liking pages and by engaging with content shared by their friends and that of the pages they follow. Facebook users also often indicate their location, age, relationship status, occupation, schools they attend, places they visit, and many other pieces of demographic information. These traits overlap to create a virtual identity that (in many cases) is an accurate reflection of the person’s real-life personality and interests.

By allowing advertisers to target users based on any and all of the aforementioned demographic information, Facebook has created what can only be described as the most robust, real-time, interest-based advertising platform to date. The combinations available for targeting are nearly endless and are only limited by an advertiser’s creativity and budget.

With Facebook advertising, businesses can insert content directly into a user’s newsfeed. This advertising content will blend with posts by friends and other business pages that the user already likes. When the content is properly targeted, it can feel organic and less like a disruptive commercial or traditional print advertisement.

For example, if you operate a wedding venue, you could target all Facebook users who are located within 50 miles and have a relationship status of “Engaged.” Furthermore, if you have recently launched a new brand of outdoor gear that is designed for a middle-aged male audience, you could create an ad that targets men within your specific age bracket, as well as those who already like pages of established competitors like REI stores or Mountain Hardware. If you do not get the results you had in mind, you can continue to refine your targeting or use test ads with similar target audiences to see what works best for attracting new Facebook users to your content.

This level of target detail makes Facebook’s platform one of the most sophisticated adverting systems ever created. While I’m sure new technology will emerge that provides more robust targeting, as of now, Facebook’s options for connecting businesses with potential customers makes it an essential aspect of social media management and strategy.

 Advertising Tracking and Return on Investment

Google and Facebook advertising are delivered in an online environment, where the transition between the ad and the advertiser’s website is seamless. With free tracking tools like Google Analytics, it is possible to track goals or conversions, and establish reporting dashboards that will give the advertiser real-time data on how well their advertising is performing. This real-time tracking, paired with the low barrier to entry, make these forms of online advertising very low risk for advertisers to test, explore, and integrate into their Internet marketing strategy.