What is digital advertising?
Digital advertising is a big concept and often difficult to grasp. All types of digital advertising are lumped together, which creates problems for marketers but also in other contexts. In this article, we dig a little deeper into digital advertising and find out what digital advertising is and what the differences are between, for example, digital advertising on social media and in search engines.
As the introduction of this article suggests, it is a collective term for all types of advertisements published digitally. This means that both an ad run in Google search results (SEM) and an ad in a digital magazine are included in the term. Of course, it also includes all social media platforms such as Facebook, Instagram, Twitter, Snapchat and the newer giant TikTok.
But it's not just different platforms you can advertise on, it's lots of different formats. Digital advertising includes video ads, display ads, search ads, etc.
Subcategories of digital advertising
You can categorise digital advertising into a few sub-groups to make it a little easier to grasp and compare different types. To start with, let's categorize advertising into the main areas of platforms:
Advertising in search engines
Search engine advertising, or as it is also called Search Engine Marketing (SEM), is any type of advertisement that can be displayed in a search engine. Often the first thing that springs to mind is Google, but there are many different search engines, although Google is by far the largest in the western world. In addition to Google, there are Bing, DuckDuckGo, YouTube (although it is part of the Google group Alphabet) etc.
The primary reason for using search engine marketing is that you can reach people who are searching for something specific. If you sell dog food you can advertise to anyone who searches for "buy dog food" which is a clear intention to buy dog food.
Read more about SEM in our article What is SEM.
Social Media Advertising
Social media advertising is just as it sounds advertising on Social media. This includes all social media; Facebook, Twitter, Instagram, Pinterest, Snapchat, TikTok, Linkedin etc.
The main advantage of advertising on Social Media is to reach a targeted audience. All social media sites collect information about their users, which is then used to help you advertise to the most targeted audience possible. For example, you could advertise to people within a certain age range who are interested in dogs and live in Jönköping. This means that if you know which target group you are targeting, you can reach that target group easily.
Advertising on other websites
Within this broad category are all ads on websites that are not a search engine or social media. Here you can advertise on e.g. Dagens Nyheter DN.se, New York Times nytimes.com or any really small blog.
There are usually two common ways to advertise on these types of sites, either you contact the site directly and buy an ad or you buy ads through an ad network. If you buy ads through an ad network, you can set which sites you want your ad to appear on (if the site allows ads from that ad network).
The advantage of this is that you can reach a large audience that you don't usually reach through other advertising methods and is usually effective for building brand awareness.
Digital advertising has grown under Covid
In recent years, the digital advertising market has grown at a rapid pace. As a result of Covid, more and more companies are spending more on digital advertising. In 2021, digital ad spending increased by 38% to $211 billion in the US alone. Which compares to an average annual increase of 21% over the previous 5 years, according to eMarketer(https://www.insiderintelligence.com).
But it may be that this trend is about to be broken.
The Future of Digital Advertising
An article in The Economist ("Oh, Snap" in the July 30 edition) talks about how the digital advertising market is changing. Digital advertising giants Google (Alphabet), Facebook and Instagram (Meta), Snapchat, Twitter have all reported advertising sales growth that is lower than the previous year. Google and SnapChat had incremental ad sales growth of about 12% which is significantly lower than last year while both Twitter and Facebook reported lower ad revenue of about 1% compared to Q2 2021.
The Economist article discusses whether digital advertising will decline. My view is that it is not possible to lump these advertising platforms into the same category. As the reports attest, ad revenue for the big social media platforms, Facebook, Instagram and Twitter, is declining, I think that's a big trend. On the other hand, new social media platforms will emerge such as TikTok which recently passed 1 billion active users taking ad revenue from the existing social media platforms.
On the other hand, it's about what the benefit of the different ad platforms is. On social media, the advantage is that you can advertise to a specific audience, which is becoming more and more difficult thanks to the stricter legal requirements around tracking and data collection.
This is in contrast to search engine marketing where the great value is to reach people who have an intention to do something or find out something regardless of their age, other interests or geography.
When to use which type of advertising
Every business has different challenges and needs different types of advertising solutions. If you want to build a brand for the public, often the most effective solution is some form of display advertising on multiple websites via ad networks. If you need to focus on people who are in the process of taking an action, you should work with search engine marketing.
If you have an extremely clear target audience to reach with a message, social media is the way to go.
If you want to discuss something with us or need help with digital marketing, please contact us!
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