Online advertising basics

We now turn to online advertising. The two most common forms are paid search advertising and display advertising.  We’ll look at their use on the web and, increasingly, in social media, and we’ll look at how advertising can fit into book or ebook campaigns.

John Wanamaker

John Wanamaker, marketing pioneer

Half the money I spend on advertising is wasted; the trouble is I don’t know which half. — John Wanamaker

Nineteenth century marketing pioneer John Wanamaker made a fortune in retailing but he’ll be remembered for the quote to the right.

The good news is you now have a much better chance than Wanamaker did of spotting which half of your advertising is working because online advertising is highly measurable.

It’s also big business. In many markets, online advertising has overtaken traditional media such as magazines and radio in advertising market share.

Publishers have traditionally been small advertising spenders, relying on booksellers, publicity and word-of-mouth to drive sales. But as publishers and authors focus more of their promotional efforts on reaching out directly to their readers, and in many cases selling directly to their readers, direct advertising is likely to play a larger role.

Online advertising basics

There is a huge range of advertising available online. Most of it falls into two basic types.

Paid search advertising

This is the largest advertising category, dominated by Google. Advertisers pay to have their ads displayed to users as they type queries into search engines. The ads usually appear as links in the search engine results pages.

Display advertising

This is the next most popular form of online advertising. Ad banners appear on websites in various sizes, positions and formats, including text, images, and rich media. They can be displayed to all visitors, or their display can be triggered by the visitor’s profile, location or interests to make them more relevant and effective.

The emerging power of social media advertising

While most online advertising has traditionally run on search engines and websites, social networks including Facebook, Twitter and LinkedIn, are emerging as powerful channels to run advertising.

Most of the ads they offer are types of display ads, but because they know a lot about their users’ demographics, interests and online activities, they are proving very effective at targeting ad messages and generating leads. This opens up effective new advertising possibilities for book marketers.  We’ll look at social media advertising in more detail a little later.

Email advertising

While this section is about online advertising, email is a very powerful tool that features in highly in successful book marketing campaigns. We’ve covered the importance of building an email database but you can also tap into this power by paying to feature in email “deal of the day” lists such as BookBub. It’s one of the most effective ways to boost sales quickly and it’s worth setting aside some money for it in your ad budget.

How online advertising is sold

Online advertising — also referred to as interactive advertising — is generally sold using one of three methods.

Cost Per ClickCost per click (CPC) — also known as Pay per click (PPC)

In this form of advertising, the advertiser is charged each time a visitor clicks on an ad.

For this reason, it’s often called performance-based advertising since you only pay for results. This is the method used in paid search advertising.

Cost per thousand impressions (CPM)

This method is most often employed for display advertising. The advertiser is charged by the number of times an ad is displayed to visitors, referred to as impressions.

Payment does not depend on the ad’s performance but there are ways to track its effectiveness.

Fixed cost

Advertisers pay a fixed amount for an ad to appear for a period of time, regardless of how many times it is viewed or clicked on.

While you can deal directly with websites, most advertising is sold through ad networks which run your ads across a range of websites, based on parameters you select.

Among the biggest ad networks are Google AdWords and Microsoft adCenter.

How paid search advertising works

Search engine advertising is part of a larger field called search engine marketing (SEM). We’ve looked at one part of this field, search engine optimization (SEO), in which marketers try to beat the search engine’s algorithms so that their listings appear high up on the first page of search results for their chosen keywords.

You can’t buy a higher ranking on these pages and this method is also referred to as organic search to distinguish it from paid search in which you can pay for your listing to appear when a visitor searches for a keyword.

Google Search

Google search results page. Click to enlarge.

So, here’s how paid search advertising works.

  • You, the advertiser, choose keywords and phrases that will trigger your ad.
  • You buy these ads in an online auction by bidding for the keywords on a cost-per-click basis. That is, you agree to pay only when your ad is clicked on, not based on how many times it is seen.
  • When a search engine user types a query that includes your keywords, your ad pops up at the top or side of the results page, in a section labeled ‘ads’ or ‘sponsored listings’. If the user clicks your ad, you pay.
  • You limit your spending by specifying a daily budget limit. Your bid price determines whether your ad appears, and in which position – higher bids run near the top.
VIDEO: What is AdWords? (3:53) — Google

VIDEO: Writing online ads that attract customers (3:52) — Google

Online display advertising

Display ads are the advertising banners that appear on many sites including news sites and blogs. They usually include images and, increasingly, rich media like video and animations.


Ad sizes and placement

Banner ads generally run across the top or down the sides of websites. In recent years, the industry has established a number of standard ad units — specific sizes and formats — to simplify the job of creating and running these ads. Most websites that run advertising conform to these industry sizes.

Ad networks

Most online display advertising is sold through ad networks which represent groups of websites to advertisers. It is particularly prevalent in the market for smaller advertisers and websites. The ad networks also take care of the distribution and tracking of ads.

The largest ad network is Google AdWords which operates a global ad network. Amazon is building an ad network — expect advertising to feature more prominently in Amazon’s future — and there are many smaller networks. These are often country-specific or serving vertical markets, and there is rising interest in mobile networks which serve ads to mobile devices.

But perhaps the most important recent development in online display advertising is the rise of social media advertising. Facebook leads the field but its rivals are quickly building sophisticated advertising platforms of their own.

Targeting ads

While display ads run in fixed positions such as across the top of a website, they are often aimed at specific visitors using sophisticated targeting technologies.

  • Contextual advertising targets visitors based on keywords. The advertising system scans the website for keywords and matches ads to relevant pages.
  • Behavioral advertising targets visitors based on information that ad systems learn about internet browsing behavior such as pages visited, links clicked on, time spent on sites, and searches made. Google pioneered this technology which has controversial privacy issues associated with it.

Cost per thousand impressions (CPM) vs cost per click (CPC) advertising

It’s very common for display advertising to be sold on a CPM basis, while search advertising is more commonly sold on a CPC basis.

In CPM-based advertising, the advertiser pays for the number of times an ad is viewed (impressions), regardless of whether the visitor takes an action such as clicking on it. This is very common if the goal of the campaign is branding or awareness rather than direct response.

Publishers will often set a fixed CPM for their site and advertisers will buy a fixed number of impressions. Ad networks can run an advertiser’s campaign across multiple sites

Some networks will let advertisers bid for the CPM they are willing to pay, just as they can bid for the cost per click.

Tip: Where both CPC and CPM options are available for a target audience, a good strategy is to run a test campaign on a CPM basis. Based on the cost and the percentage clicking on your ad — the click-through rate (CTR) — you can calculate how much to bid for a CPC campaign.


Find out more about this topic on our Digital Publishing 101 useful resources site.


Feedback Icon Feedback or suggestions for this page
(Visited 19,039 times, 1 visits today)