Click Me the Money

Have you ever wondered how people make money online? How about what happens when you click an advertisement strategically placed on a web page – even if you don’t purchase anything? And why do some websites have more advertising than others?

Social media conglomerates like Facebook, Twitter, and others make money through advertising. Web advertising is increasing exponentially, right along with the use of social media. According to a report on Paid Social Media Advertising in 2013 by Nielsen, marketers approached social media advertising cautiously in the beginning of the year. It was used to supplement other advertising platforms rather as stand-alone branding.

Part of the restraint shown by companies as far as online advertising, is the difficulty of assessing return on investment (ROI). The metrics used to measure the web campaigns are not universal and difficult to assess. Some agencies count how many sales are generated, some determine a lift in brand recognition, and some use metrics like click-throughs on the ads to define ROI.

Many companies have used free advertising tools to get their feet wet, but the outlook for paid social media marketing is on the rise. Most brands are expected to increase paid campaigns in the coming year.

One study revealed that Facebook users reached significantly more people aged 12-54 during the weekdays than four major television networks. These numbers dipped below TV numbers during primetime viewing hours. The total day population reach showed that, in the 18-34 demographic, most were using FB online or via mobile device than watching television.

Television advertising is the tried-and-true method used by marketers. Now the decision must be made about how much online and/or mobile/digital platform advertising will benefit a brand. Do advertisers use digital-only campaigns – designed specifically for online users – or a cross-media approach, with television and digital media reinforcing each other? Nielsen results support a cross-media reach for specific demographics. Brands will have to conduct studies into what the optimal mix of television and digital advertising will work for their products and the best way to measure the impact of the campaign on sales.

What about that clicking? Click-throughs or pay-per-click advertising is a model based on a company’s placement of an ad online, on a website. For every click the ad receives, redirecting the potential customer to the company website or product, the host website receives an agreed upon sum of money. This may be defined by flat rate or an algorithm that takes bounce rates and impressions into account when determining the fee.

At this point, marketers at all competitive businesses should keep in mind that people are continuing to increase digital media use. Netflix and other digital media are available via televisions. Companies that have focused advertising in the television space must adapt and prepare campaigns to take advantage of digital outlets or be left in the dust. With so many owners of desktop PCs, tablets, and mobile phones, ignoring the advantages of advertising in the digital space would be a very foolish move.

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