In the article, prepared by advertising specialists of the Locator services marketplace, we’ll tell the advantages and disadvantages of Internet advertising as such, without delving into specific technologies.
It seems that everyone understands the term “Internet or online advertising”, but it will not be superfluous to give a definition.
Internet or online advertising is a delivery of information about goods and services on electronic media that use the Internet – websites, social networks, advertising networks, e-mail marketing, etc.
The Internet advertising market is growing every year in the world and already in 2022 it will probably be larger in volume than the classical advertising market (outdoor, radio, TV). The trend is clear – the advantages of Internet advertising technologies force more and more people to invest in this type of advertising. Moreover, the market grows not only due to the quantity, but also due to the quality – that is, in this case – the price of the final result – the client. Sometimes the situation reaches absurdity, because the price of the lead exceeds the potential profit, and therefore it remains to hope that this customer will turn into a permanent one.
By the way, such a technology as “cashback” appeared precisely because of the high price of a new client. It is cheaper for a business to return $10 to a new client than to pay $30 to advertising agency for him.
But let’s move on to specifics.
Advantages of Internet advertising
Many things can be attributed to the advantages of Internet advertising. But all these advantages are caused by new technologies. We are talking about technical possibilities to adjust the process itself, as well as about “tricks” with our psychology in combination with the laws of economics. So, the advantages of Internet advertising are:
Advantage #1. Huge audience
According to the World Bank, the Internet audience of Ukraine in 2021 is 75% of the population. The absolute majority has a smartphone and the Internet on it, which means that these people are consumers of Internet advertising. Such devices are already available, a cheap Chinese smartphone that performs its functions costs +- $100. Most office workers have computers. Many Ukrainians have tablets, laptops and computers at home.
Internet advertising will “catch up” with its goal on informational sites, social networks, streaming video services, Viber, Messenger, etc.
Advantage #2. Structured audience
All of them have long been “counted” and assigned to a certain segment of consumers based on many characteristics. This provides an opportunity for clear targeting of advertising. It makes no sense to show a lawnmower ad to a child, any more than it makes a male gardener an ad for women’s cosmetics. Yes, he has a wife. Therefore, he will be shown the cosmetics before her birthday (this is not a joke).
This structuring makes it possible to most accurately choose a segment of potential consumers of a product or service to display advertising to them – on the one hand, on the other hand – to maximize the effect (conversion) of advertising.
Structuring can be according to: gender, age, nationality, religious views, cultural habits, education, interests, work, material well-being, marital status, place of residence, etc.
Advantage #3. Measurability
The advertiser receives complete statistical information for each advertising company. How much money was spent, for what time, the effectiveness of the reaction to advertising, the average price of one action (for example, switching to the site), the profitability of attracting this segment (% of sales, conversion), the average check, and, as a result, how much hryvnias of profit you will receive on every hryvnia invested in advertising. Agree, a great advantage, especially compared to outdoor advertising, where getting all these numbers is either impossible, or difficult, or with some tangential methods that have their own price.
Advantage #4. Scalability
If your product or service is not limited to a certain territory (for example, an online store with mail delivery), then of course you have a lot of potential for scaling. If you are limited by territory (for example, you provide services in a beauty salon), the potential for scaling is much less.
In this case, the potential for scaling is the potential for greater return on a greater investment. Where the return on investment begins to diminish, or becomes zero, that’s where the scaling potential ends.
You can start testing internet advertising with $10-100, measuring % ROI (Return on Investments), and bring it to tens-hundreds of thousands per month with corresponding profits.
Advantage #5. Controllability
In the case of online advertising, you get full control over all elements of the ad. You have an “On/Off” button, you decide when to turn on Internet advertising, when to turn it off, according to which schedule it will work every day, what information you will provide, in what way (video, static image, animated banner), which product or which service to advertise, which one not to, how much money to spend per day or per month, which segment to show advertising, and which to forcefully exclude, and so on.
Advantage #6. Flexibility
This advantage reveals more facets of controllability. You can change any setting of your advertising campaign at any time. From the budget to the final one
goals (prospect actions).
Advantage #7. Speed
In some cases, several hours may pass between the decision to launch an ad and the immediate launch. It is impossible to get such a result with classic advertising media.
Advantage #8. Interactivity
Advertising on the Internet, unlike external and media (TV, radio, print), is interactive. That is, you can interact with it: click on the advertisement and go to the product/service page, read additional information about the product and order and pay for it right there on the website. The period of time from paying attention to advertising by a potential client to payment can start from several minutes (!).
Although with the help of QR codes, you can add interactivity to external and media advertising.
Advantage #9. Accessibility
Online advertising is relatively affordable. You can start with small budgets. Having basic knowledge about Internet advertising, register an account on the appropriate service, spend time on settings, spend it on analysis and support and have some result. Of course, to do it well, you need to spend a lot of time studying, learning basic concepts, metrics, etc. But still, you don’t need a “suitcase with dollars” as in the case of TV advertising.
As you can see, Internet advertising has quite tangible advantages. There is simply no point in ignoring Internet advertising. That is why all these advantages combined create the biggest disadvantage of Internet advertising.
Disadvantages of Internet advertising
Of course, everything has its downside. And Internet advertising is no exception. Let’s start with minor flaws in order to quickly finish with them and move on to the most important of them.
Disadvantage #1. (distrust
Internet advertising should be treated with caution. But it is still better to be careful with the information you receive with the help of Internet advertising. These can be, for example, some kind of fake (relevant during the war), or false information about the product, the main task of which is to cheat you out of money. But these are individual cases. Well-known online publications and online stores hardly “sin” like that.
Disadvantage #2. Boredom
There is a very beautiful meme on the Internet what is a meme?, which characterizes this drawback. Here he is.
Well, jokes are jokes, but it is necessary to keep this moment in mind. Your advertising should not be too much. How to control it? This is a separate topic.
Disadvantage #3. High cost
High cost is the biggest disadvantage of Internet advertising. At the beginning of the article, we mentioned the absurd situations when the cost of attracting a new client significantly exceeds the potential income from it. This can make your product uncompetitive.
The owner of one of the mobile phone repair service centers said that he deliberately refused Internet advertising because its share in the cost of services was unreasonably high due to high prices. That is, from UAH 500 for work on replacing broken glass, more than half of the price of the service is spent on Internet advertising.
What causes the high cost of Internet advertising?
Since we live and work in a market economy (at least the electronic part of it is a market economy), the high cost of Internet advertising is a consequence of the high demand for it. But not only. Let’s figure it out.
Who is the “provider” of Internet advertising? As a rule, these are huge IT giants: Alphabet Inc. (Google, YouTube) and Meta Inc. (Facebook, Instagram). Several other much smaller players. There is a certain monopoly on the market, so in this case the market leaders dictate their terms and prices cannot be low.
These same providers are American companies that pay taxes in the USA and pay high wages to their employees there. They are also paid from the pockets of advertisers who use these services.
Advertising service is a very technological system. It takes literally hundreds of highly paid programmers, project managers, and top managers to develop, implement, and manage such a system.
And finally, one more reason is… you! Advertisers who want their product or service to be purchased by the client create huge competition in the market and are ready to give the last hryvnia, but continue to work and not stand idle. Yes, this is the same jungle, only in a slightly more civilized wrapper.
Conclusions
Internet advertising is a red ocean what are red and blue oceans?.
Internet advertising is a separate type of activity that requires time, knowledge and skills, which cannot be mastered in one moment, therefore advertising agencies require a lot of money for conducting advertising campaigns on the network. In 2019, complex Internet marketing with a limited time resource was estimated from $500/month, agree, for a small business the price is biting.
And here, micro, small, and partly medium-sized businesses face a dilemma: master this science by yourself and save on specialists, but lose precious time, or give the lion’s share of income to specialists and not “worry your head”?
You should have had the following question: is it possible to launch effective Internet advertising, not to hiring specialists, but at the same time not spending time on all this “science”? There is such a possibility. Read below.
Oleksandr Mazurkevych, Locator.biz