Online Advertising – The One Thing You Need To Know About It
Or maybe a better way to phrase it is that Online Advertising uses a technique that has been popular and effective for centuries.
Whether it’s a Google Adwords Campaign or Getting your Ads onto websites, the technology behind these things relies on bidding.
Advertising online is like Bargain Hunt on speed. How it works sounds sort of sci-fi but I will do my best to explain.
When you set up an Ad online, be it a Google Ad or a Display Ad, you place a bid for the action you want it to achieve, that action is generally to be shown, or to be clicked.
Then, when someone types your particular keyword into Google, your competitors bids are taken into account and who ever bids the highest wins that space and – Ta-Da! – their Ad is displayed.
This happens in seconds – no, less than seconds. Milliseconds.
Are you still with me?
It’s all a bit cloak-and-dagger. Google provide you with an average cost per click and you have to play them by stealthily lowering your own costs accordingly to get your cost per click as low as possible. Too low and your Ad won’t be displayed, too high and you are lining Google’s pockets and depleting your own.
If you want to line Google’s pockets though, that’s cool – I hear they need a new air hockey table.
Here is the part that most people find confusing.
Just like you wouldn’t arrive at an auction with nothing in your pockets, you need to have some money to spend on your Ads. So, you decide the absolute maximum you want to spend on online advertising per day.
Then you go to the virtual auction room with that in your pocket. If someone clicks your ad, the amount you have bid for a click is taken from your daily spend. This keeps going until all your money for that day is gone – or until the day is done.
Let’s do an example in my favourite multiple: 10.
Lets say you bid 10c a click and have a budget of €10 a day.
If 100 people click on your Ad in one day, you have spent that €10.
If 50 people click on your Ad you spend €5,
If 10 people click on your Ad you spend €1
If you get one click a day you spend 10c a day.
If 101 people want to click your Ad, well, that last one can’t – because your budget is just €10.
So there you have it.
Maybe the BBC will make a show about it in the future in the great tradition of Antiques Roadshow. Until that blessed day arrives, why not sign up to our newsletter below to get more online marketing tips and tricks for your business. No spam, just good solid advice.