I have a question for you: how many advertisements do you think the average person is exposed to in a day? 50? 75? 300, maybe? If you guessed anything below a few thousand, you may be wrong. If you're a US citizen, digital marketing experts estimate that you can be exposed to anywhere between 4,000 to 10,000 ads each day. Globally, these figures can differ, but this statistic is very telling of the prevalence of advertisements. Now, think about the time you personally spend on the internet. I'm sure a lot of the ads you experience in a day come directly from a computer or phone screen. This type of advertising is called online advertising. Simply put, online advertising is a form of marketing which uses the internet to deliver promotional marketing messages to consumers. Whether a brick-and-mortar store or an online retailer, online advertising is now the go-to method for most businesses' advertising purposes. It may be hard to believe, but before the mid-1990s, online advertising was largely prohibited on the internet. Companies were forced to rely on traditional advertisements in radio, television, billboards, and magazines. That all changed once the ban was lifted. Online ads soared, becoming the primary way for companies to get their brands recognized and products discovered. Why did so many retailers rush to online advertising? Let's explore this by going over the four key benefits of online advertising. The first benefit of online advertising is that it's cost effective. When we compare the two, traditional advertising requires a significantly larger budget than modern online ads. As we discussed in the previous course, these advertisement costs are calculated by CPM, which stands for cost per 1000 impressions. In general, the average CPM for online advertising ranges from approximately three to ten dollars. By comparison, it costs approximately $15 to $30 to reach that same amount of people through newspapers or television advertisements. To improve efficiency, advertisers shifted their advertising budgets to focus largely online. The second benefit to online ads is that they can have global reach capabilities. Before online advertising, reaching a global audience was nearly impossible for small to medium sized companies since global campaigns using traditional advertising could cost millions of dollars and require extensive research. Thankfully, online advertising has the ability to target specific sections of the world using digital marketing technologies. Businesses can now market to an internet user in a completely different country without the cost and hassle that came with traditional advertising. Moving along, the third benefit of online ads is they help advertisers gather data for effective brand strategizing. With traditional advertising mediums like billboards, advertisers have little insight on how effective their advertisements really are, and they don't know if their billboard is in the right place. For example, a company can put their advertisements on a busy highway to get noticed, but if the traffic is moving too quickly, drivers might not have the time to read them. The business will never know for certain how many people paid attention to their advertisement or what percentage of those people searched for their company based on that advertisement. Online ads are different. Many times advertisers can track analytics to see where their ads were seen, how many people clicked on those ads, and how many of those clicks lead to a purchase. This data is important for determining where to spend advertising dollars. And the fourth benefit of online ads is they are quick and easy to produce. Traditional media forums can require a lot of work. For example, if a company wants a television ad, they may have to hire actors, write a script, and pay for a production crew. This takes time, additional expenses, and detailed planning. Online ads bypass most of these complications by having automated structures that streamline the process. Depending on the ad hosting service, advertisements will require companies to simply input information and generate their desired ad. Later, we will explore one of those automated systems. These four benefits of online advertising are just a start. When you enter the e-commerce field, you'll recognize more benefits that will come with online ads. Today, the most common types of online ads are powered by Google Ads. With Google being the most popular search engine globally, Google Ads allow internet users and consumers to search, browse, and compare products across a wide variety of brands and retailers. Coming up, you'll learn about how Google Ads use campaigns to connect with customers. Meet you there.
