Online Advertising, if used correctly, can be an extremely powerful marketing tool that does not only help companies promote their products and services online, but it promotes the products and services to people who have shown interest – or that is how Online Advertising should work.
Many people, especially in Namibia, may argue and say that Online Advertising is not yet effective – generally those are the people who have made use of Online Advertising that yielded no results – leaving the person to disbelieve the true power of the internet.
There are many forms of Online Advertising available online today; some forms are more effective than others, while some forms are plainly just a scam. The main aim of this reference guide is to look at Performance Based Online Advertising as well as some other techniques that have been adopted in Namibia. An Online Advertising pricing reference has also been included.
Below kindly find an article index for ease of reference:
1. Understanding the basics of Online Advertising
“Online Advertising allows you to show your ads to people who are likely to be interested in your products and services, while filtering out folks who aren’t. And you can track whether those people clicked on your ads.” - Google AdWords Study Guide
Interest Based Online Advertising.
Online Advertising makes use of online user data collected while browsing the internet to determine what the person’s likeliness of actually wanting to interact with a specific advert.
For instance, when an advert for a coffee shop located in Windhoek, Namibia is placed online the advert will only appear to individuals who live in Windhoek and not to an individual from Pakistan or even Swakop.
The example above may only relate to location based interest; however various other forms of targeting options are available, depending on the platform used, thus it is important to have a clear target audience in mind when advertising online.
Performance Data and its uses.
Properly implemented Online Advertising can always provide advert performance based data; this is one of the main goals of this form of advertising. If you have not yet received such information from your supplier, it might be time to do some investigation.
Below are 4 fundamental types of information you should be receiving about your Online Advertising:
By understanding the above mentioned information about your advert you can ensure to track the overall performance of your adverts understanding why and when you spend money.
2. Online Advertising Techniques Adopted in Namibia
In the past we have seen various forms of Traditional Advertising methods be transformed to online platforms within Namibia, and while they do bring in some leads these have their down-falls, below are the 4 top Online Advertising Techniques used in Namibia, that aren’t performance based:
Ad Space Payment Technique
The method: The Ad Space Payment Technique refers to a form of Online Advertising payment where company charges their clients a set fee for the physical banner space used on their website.
For example, in many cases companies would have a set number of dedicated areas on their website in which they place adverts; these dedicated spaces are sold at a flat rate per day, week or month.
Advantages: Since this technique was adopted from print mediums such as newspapers or magazines the majority of people already understand and grasp the idea – thus explaining this form of advertising to potential advertising customers is a lot easier for Marketers and because the adverts are sold at a flat rate they are also easy to manage and maintain on the website.
Disadvantages: The disadvantage of this technique is simple. The internet is filled with information every second, in fact there are many infographics depicting what happens online in a minute. There are billions of websites online at any given time and hundreds in Namibia alone, thus by placing a banner advert on one single page means you are only advertising to the audience of one single web page, and thus would yield almost no results.
Bargain Page Technique
The method: The Bargain Page Technique is when a company makes use of a website to advertise multiple companies, products and services. For instance, a website is created with the main aim of displaying the latest special offers within a specific town or country; such a website will list multiple company specials on one page.
Generally in such cases, the person advertising will be charged higher to advertise on the home page and less to advertise on a sub-page. The home page is charged at a higher rate, as the website owner knows and understands the performance and usability of the website. Due to the type of website visitors generally tend to only visit the home page, thus the home page price is higher.
Advantages: While this technique might seem to work, the users of the website gain more than the companies advertising on the website.
Disadvantages: Generally companies using this technique are able to provide the advertisers with basic performance information about the website; this information may include, but is not limited to:
- Total Users (for specific period);
- Total Page Views (for specific period);
- Total Sessions (for specific period); and
- New visitor rate (to indicate the number of new visitors).
While the above mentioned may seem like useful information that needs to be placed in the “advantage” section, sadly it is not. While this information is most definitely useful it needs to be measured with other information.
For instance, what is the percentage break-down of countries that access the website? It does not help your advert if the website receives 1,000,000 users but only 1% is from Namibia.
Another important piece of information to measure the provided information with would be the websites Bounce Rate, if the website has a 75% bounce rate it means only 25% of the visitors remain on the site using it. To put this into perspective, if the website received 1,000,000 users and only 1% is from Namibia your advert is only seen by 1,000 of the users. If only 25% of visitors remain on the site it means only 250 visitors are seeing your advert – and unfortunately of the 250 there is no way to know how many will be interested in your advert.
Rotating Ad Block Technique
The Rotating Ad Block Technique is most probably one of the most popular techniques used in Namibia, and rightfully so – in many cases this technique does yield results; however the results are still very low and I’ve found that this technique tends to be the most expensive.
The Method: The Rotating Ad Block Technique is when a company created a set number of designated advert spaces on each page, with each advert space containing multiple adverts. The company then lines a number of adverts in each advert space (or block). The adverts in the block then rotate either at a set speed or each time the page is reloaded.
Advantages: Generally when using this technique the website data shared with you is somewhat more transparent, the company will share the number of users that visit the website indicating which percentage is Namibian.
Disadvantages: The one major disadvantage with the Rotating Ad Block Technique that reloads the adverts in the space automatically is simply that you can never be sure if the website visitors actually saw the advert or not. For instance, if your advert appears on the top of the page, but it is third in line to appear in the space, it means there is a big chance that the visitor would have scrolled down to the bottom of the page by the time your advert appears.
Another major disadvantage is the lack of customer (or user) targeting options provided by the company. Because there are multiple adverts lined up in one ad block you cannot specify the audience (e.g. age, gender, location, etc.) because the adverts are scheduled to appear in sequence/randomly regardless of who the visitor on the website is.
Let’s say that the website received 600,000 visitors and there are 3 adverts lined up in the space, it means your advert will only appear to 200,000 of the visitors. Your business is located in Walvis Bay; however only 4% of the website traffic is from Walvis Bay it means that of the 200,000 visitors your advert will only be seen by a potential 8,000 visitors. This means that there is a 192,000 spillage on the advertising. So why are you paying for 200,000 when you could (and should) only be paying for the 8,000 visitors.
Email Advertising Technique
The method: The Email Advertising Technique generally involves a company collecting thousands of email addresses, either from a range of online platforms or just one, and then sells “email advertising” in which they send out your advert to the list of email addresses.
Advantages: One of the advantages of this form of advertising is that your advert is being distributed to thousands of potential customers at once. This is also generally a very inexpensive technique making it rather affordable.
Disadvantages: The major disadvantages to this technique are that it generally yields zero results as, in most cases; these emails are marked as spam by the recipients email client because the email is not only seen, but is, spam. Do you think it is a good idea to associate your business or brand with that of spam?
Alternative Solution: There is, however, an alternative solution to Email Advertising that if executed properly yields the results desired.
The best method to explain the alternative solution is by example. If you own a fine-dining restaurant in Windhoek and strive on creating a food culture around the food you serve, you can start a mailing list in which you ask your guests to subscribe to your newsletter.
Once a week or month, you can send out a bulk email to all subscribed guests sharing recipes, useful cooking tips, the weekly specials, etc. If this approached is used the open rate of emails are much higher, as the recipients chose to receive the emails.
We’ve found that MailChimp offers an easy to use, affordable solution that shows results.
Another alternative solution to Email Marketing would be to add information such as special offers, products, etc. to your email signature. If the correct solution is used, if the recipient clicks on the special, product, etc. the sender receives a notification about this activity allowing the sender to contact the recipient and make the sale.
3. Performance Based Advertising
Now that we’ve looked at the various Online Advertising techniques adopted in Namibia, it is important that we take a look at the technique used on an international scale (and by some companies in Namibia).
What I am referring to here is – Performance Based Advertising. The true of Online Advertising is to track users’ online activity and use this data to better deliver adverts to the users based on their interests, leading to an increase in interaction between the user and the advert due to interests shown.
It is clear that Online Advertising is, and should remain, dynamic ensuring that it grows and evolves with potential customers and visitors – and since the channel is required to evolve and change so is the pricing to ensure that advertisers receives real value for their money spent. It would only make sense that the pricing system for Online Advertising is based on the standard internationally understood economical term: Supply and Demand.
Performance Based Online Advertising is all about competition. This is best seen in Namibia during the December holidays. In Namibia, during December, all companies are seeking to advertise their Christmas specials increasing the demand of Online Advertising published online; however at the same time most people (or potential customers) are on leave – next to the coast fishing. This means that while the demand of adverts are low, the “supply” or interest in the adverts are low thus the competition and price increases to advertise to the few people who are actually online.
For more information on some of the technical elements that make up Performance Based Advertising, scroll down to: Reference: Online Advertising costing break-down
4. A guaranteed way to know if your Online Advertising Works
While there may be many controversy online in regards to which methods are the correct methods, the only sure fire way to track the success of Online Advertising is to track the adverts placed and then measure the performance of the advert.
Below are a couple of key factors of Online Advertising that I consider to be worth-while:
5. Reference: Online Advertising costing break-down
An advertising inventory is defined by the number of impressions their platform (website, app, etc. ) receives. For instance, if a publishers platform has 1 ad block on all pages and his website receives 100,000 impressions the advertising inventory is 100,000. Since advertising inventories are linked to impressions the inventory is affected if a second block is added to all pages, the advert inventory will then double to 200,000.
After understanding how the advertising inventory is filled, we can move on the various pricing modules available and how some of the basic calculations work.
Cost Per Thousand (CPM or CPT)
Cost Per Thousand (CPM) refers to the Online Advertising Pricing Module in which the advertiser is charged per thousand impressions or thousand times the advert is delivered.
For instance, if the CPM price is N$ 1.50 and the advertiser buys 600,000 impressions they would effectively pay N$ 900.00. Calculation: (600,000 / 1,000) x N$ 1.5 = N$ 900.00. Find out more about CPM
Cost per Click (CPC or PPC)
Cost per Click (CPC) refers to the Online Advertising Pricing Module in which the advertiser is charged every time a visitor clicks on the advert.
For instance, if the advert appears 600,000 times and was clicked on 600 times at a CPC rate of N$ 2.00 per click the advert will effectively cost the advertiser N$ 1,200.00. Calculation: 600 x N$ 2.00 = N$ 1,200.00. Find out more about CPC
Cost Per Acquisition (CPA or PPA)
Cost Per Acquisition refers to the Online Advertising Pricing Module in which the advertiser is charged acquisition (e.g. per click, or form submitted). Due to this CPAs Pricing Module is calculated in the same way as CPC; however the cost per acquisition tends to be higher as the visitor is completing an action which provides the advertiser with more information. Find out more about CPA
Cost Per Lead (CPL)
Cost Per Lead refers to the Online Advertising Pricing Module in which the advertiser is charged per lead. E.g. The advertiser is charged when the visitor completes an order form or application form. This is also generally known as lead generation. Find out more about CPL
Click Through Rate (CTR)
Click Through Rate (CTR) is not an Online Advertising Pricing Module; however it is used to determine the ratio of users who clicked on a specific link. For instance, if an advert appeared 600,000 times and was clicked on 3,000 times the CTR would be 0.5 %. Calculation: (3,000 / 600,000) x 100 = 0.5%.
This means that every time the advert loads there is a 0.5% chance that a visitor will click on it. Find out more about CTR
Effective Cost Per Thousand (eCPM)
Effective Cost Per Thousand (eCPM) helps both advertisers and publishers determine a common metric in order to calculate an effective cost for Online Advertising’s wide range of Pricing Modules. Click here for calculations
eCPM can also be used by advertisers to determine which is the better Online Advertising Pricing Module. While CPC is the most popular Online Advertising Pricing Module it might not always be the best Pricing Module to select for a specific advertiser. By calculating the eCPM a person can determine the best Pricing Module to select for your advert campaign or tracks who provides the lowest price at the best rate for advertising.