How Businesses Use Online Advertising in 2018
Two-thirds of businesses invest in online advertising, according to a survey of 500 digital marketers. Most businesses use a variety of online advertising channels to influence customers to make a purchase.
An astounding 89% of Americans use the internet to browse search engines and social media, shop for products, and make purchasing decisions.
Because consumers spend so much time online, it is essential for businesses to also be online.
The Manifest surveyed 501 digital marketers at businesses across the U.S. to discover how they use online advertising.
To reach the most consumers possible, businesses invest in online advertising on social media, search engines, and websites.
Online advertising is an important digital marketing strategy, and businesses can use this report to learn how they can benefit from advertising online.
- Two-thirds (66%) of businesses invest in online advertising.
- Social media advertising (86%), display advertising (80%), and paid search marketing (66%) are the most popular online advertising channels that businesses use.
- Fewer than half (43%) of businesses invest in retargeting advertising.
- Increasing sales and revenue (24%) is businesses’ top goal for online advertising.
Two-Thirds of Businesses Invest in Online Advertising
The majority of businesses use online advertising to reach consumers where they spend much of their time – online.
Two-thirds (66%) spend time and money on online advertising.
Businesses should use online advertising because it’s an easy way to reach consumers.
“Online advertising is important because it’s where people spend their time,” said Jeremy Greenberg, founder of web design and digital marketing agency 97 Switch. “If you want to have mindshare over people, you need to be where they are.”
The average American spends 24 hours per week online, so to reach consumers, businesses need to be online.
Because the majority of consumers spend so much time on the internet, all businesses should invest in online advertising – not just 66%.
“It’s crazy to me that number isn’t higher,” said Flynn Zaiger, CEO of Online Optimism, a digital marketing agency in New Orleans. “Knowing that only two-thirds of businesses are doing online advertising means that just starting with an online marketing tactic can put you ahead of one-third of the competition.”
Even investing a small amount in online advertising will help you stand out from competitors that don’t invest in it at all.
For example, Hello Cheffy, a marketplace that helps people find personal chefs for events, relied on online advertising to establish itself when Katherine Hunter-Blyden founded it in 2017.
“Online advertising has really helped us get off the ground,” Hunter-Blyden said. “I’m not sure what else we would have done. It’s one of the most successful ways to reach people.”
Online advertising is a successful strategy for businesses trying to appeal to consumers.
Online Advertising Reaches Consumers at Lower Costs
Online advertising helps businesses reach consumers using more innovative and cost-effective methods than traditional advertising.
Florida real estate developer House Heroes prefers online advertising to traditional forms of marketing and advertising such as direct mail, flyers, and billboards.
Online advertising helps businesses reach a large audience more affordably than traditional advertising.
“Online advertising connects you with prospective customers who are already interested in your service," House Heroes co-founder Earl White said. "With mail pieces, billboards, or commercials, you are broadcasting across an audience who may have little need or interest in your service.”
Businesses can more easily target potential customers with online advertising than traditional advertising.
Online advertising is also more affordable; White estimates that advertising to 10,000 people via direct mail costs about $5,000. Reaching the same number of consumers on Facebook costs $500 – one-tenth the price of direct mail.
Businesses use online advertising because it successfully reaches the consumers who are interested in your brand and is more affordable than traditional forms of advertising.
Businesses Prefer Social Media, Display, and Paid Search Advertising
Most businesses invest in a variety of online advertising channels, but nearly all use social media and display advertising.
Eighty-six percent (86%) of businesses use social media advertising, while 80% use display advertising in the form of banner, image, or text advertisements that appear on websites.
Two-thirds (66%) of businesses also invest in paid search marketing.
Businesses can reach the maximum number of consumers if they invest in social media, display, and paid search advertising together.
“Social media and paid search allow you to reach users on the main platforms they use: Facebook, Instagram, Google, Bing, and Yahoo,” Zaiger said. “Display advertising lets you extend that reach and awareness across most other major web platforms. With all three, you can reach nearly all your likely customer population.”
Consumers frequently use social media and search engines, so businesses can easily reach them on these platforms. Display advertising reaches the remaining customers who visit other websites.
How a Business Benefits From Using the Top Online Advertising Channels
Korean food retailer KPOP Foods finds success using all 3 of the top online advertising channels: social media, display, and paid search.
First, social media advertising helps KPOP Foods encourage consumers to visit its pages.
“Social media advertising has worked well for us because we have a sound social media strategy that revolves around publishing organic and paid content,” said Mike Kim, KPOP Foods co-founder and chief operating officer. “When a potential customer sees an ad from us and explores our Facebook or Instagram account, they see that … they can expect more [interesting content] from following our accounts.”
KPOP Foods’ social media advertisements influence customers to consume its organic content.
Second, KPOP Foods uses display advertising to find consumers on websites with similar content or interests.
To reach this group, KPOP Foods targets websites and outlets it knows consumers frequent.
“We search for and identify bloggers, media outlets, and other authoritative domains that receive web traffic from customer groups similar to our own,” Kim said.
Display advertising helps KPOP Foods reach new consumers who are likely interested in its products.
Third, paid search advertising helps KPOP Foods reach consumers who express interest in purchasing Korean food.
“[Paid search is] effective because it allows us to target people who have purchase intent,” Kim said. “These are people you can get to purchase on a first visit since they’re already in the market for the product you’re providing.”
Consumers who use search engines to find Korean food have an obvious intent of purchasing. Paid search advertising helps KPOP reach these consumers.
Using a combination of online advertising channels helps companies such as KPOP Foods reach a variety of consumers – those who become aware of the company, those who have similar interests to its products, and those who are ready to make a purchase.
Businesses Hesitant to Invest in Retargeting Advertising
Many businesses don’t value retargeting advertising, or online advertisements aimed at consumers who have previously visited a business’s website or purchased a business’s products.
Fewer than half (43%) of businesses invest in retargeting advertisements.
Businesses avoid retargeting advertisements because they think consumers dislike them.
“Maybe businesses don’t want to appear too aggressive online to their consumers,” Greenberg said. “Businesses may worry that retargeting advertisements could bother customers. However, retargeting is very important and does work.”
Some businesses may think retargeting is invasive to consumers, but it can be a successful channel.
For example, Hello Cheffy uses retargeting advertising to target consumers who are already familiar with its brand.
“With retargeting, we’re targeting specific demographics who are most likely to convert to a sale on our website,” Hunter-Blyden said. “We can get the people who are most responsive.”
Retargeting helps Hello Cheffy reach consumers who are more likely to be familiar with and interested in its services and are therefore more likely to convert.
Many businesses think retargeting is invasive and annoying to consumers, but it can be a successful strategy.
Businesses Use Online Advertising to Boost Sales
Businesses invest in online advertising in the hopes that it leads to sales.
The top goal businesses have for online advertising is to increase sales and revenue (24%).
Every business strategy should have the ultimate goal of earning new sales and revenue.
“Sales and revenue are at the heart of the business,” said Aylin Cook, head of content marketing at digital marketing agency Single Grain. “Without it, the lights wouldn’t remain on, and no one would get paid. Revenue is key to keeping a business alive.”
Even if a business’s top online advertising goal is to improve brand recognition or drive website traffic, it likely does so with the hope that it will eventually lead to a sale.
For example, PPC Protect, a start-up that specializes in ad fraud prevention, relies on online advertising to encourage customers to convert.
“Online advertising helps us increase our sales and revenue by targeting users who are most likely to benefit from our service,” PPC Protect Marketing Manager Sam Carr said. “We run a range of paid ads across different networks and platforms. Not only does this lead to more interest and sign-ups, but ultimately, it leads to more conversions.”
PPC Protect runs advertisements on a combination of channels to reach the most consumers who will convert. For example, it ran a Facebook advertisement to promote its services using an image meant to show that “robots are stealing businesses’ advertising budgets.”
“We received a good amount of leads from this campaign,” Carr said.
Online advertising helps businesses like PPC Protect find leads, make sales, and ultimately, make more money.
Online Advertising Is an Essential Digital Marketing Strategy
Businesses use a variety of channels for online advertising, such as social media, display, paid search, and retargeting, to reach consumers efficiently and affordably.
Online advertising helps businesses convert customers and increase their revenue.
Businesses that don’t invest in online advertising miss out on successfully reaching the majority of Americans who are online.
About the Survey
The Manifest surveyed 501 digital marketers from U.S. businesses with more than 100 employees.
Most survey respondents are managers (36%), associates (15%), C-level executives (13%), senior managers (12%), and directors (12%).
Nearly three-fourths (73%) of respondents are from B2C companies; 27% are from B2B companies.
About 29% of respondents’ companies had a 2017 revenue of less than $50 million; 32% $50 million to $500 million; 39% more than $500 million.