paid advertising

5 Changes in Paid Advertising You Need to Know about Today

Any seasoned marketer will tell you the industry is always changing. In paid advertising, success depends in part on a marketer’s ability to adapt to today’s conditions. Generating billions of dollars in revenue each year, major online advertising platforms like Google and Facebook are expected to continue their year-over-year growth. With all this expansion comes a near-constant stream of rolling changes.

So, how does the average digital marketer adapt to these changes? The answer is easier said than done, as you must do your research and adjust your strategies accordingly. 

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Here is a list of some of the most important recent changes in paid advertising, along with some advice on how your startup can adapt to them:

AI optimization

In recent years, ad platforms have begun using artificial intelligence (AI) to simplify ad creation, delivery and performance. AI can now streamline every step of the process, from detailed audience targeting to the creation of images and videos

Most notably, Facebook’s 2019 introduction of campaign budget optimization offers a one-step solution for setting an ad campaign’s budget. Similarly, Google’s shift toward smart bidding aims to simplify the art of bidding within Google Ads.

This major shift has effectively reduced both downside risk and upside potential. Without AI guidance, inexperienced online marketers often found themselves at risk of losing money due to the inability to use ad platforms effectively. Now, the risk of failure is significantly lower. On the other hand, seasoned marketers have significantly less control over the finer points of running paid ads, especially with less control over budgets below the campaign level. Facebook, Google and many other platforms are aiming to level the playing field with these new AI features.

From a bird’s eye view, Google and Facebook are shifting their target demographics toward small-scale marketers and everyday business owners. If you’re in the latter demographic, you are sure to gain some advantages in the coming years. Streamlined ad creation and deployment means less time will be needed to run ad campaigns, letting entrepreneurs and marketers focus on the other pressing needs of their businesses.

Automated A/B testing

A/B testing, also known as split testing, involves the comparison of the performance of two or more ads, webpages or other forms of digital content. This method is essential to a well-executed paid ad campaign, as implementing A/B testing helps you learn what works with your audience — and what doesn’t.

For several years, Google has employed a simple, performance-based system that allowed users to add several titles, descriptions, images and other components for automatic testing of ads. Through machine learning, Google automatically A/B tests ads to determine the best-performing components and then shows those more often. Traditional A/B testing, which involves creating several ads and measuring their performance, is also very effective with Google ads.

A/B testing for Facebook Ads has usually been somewhat of a manual process, involving the creation of duplicate ads with slight variations to measure the performance of each variable. This process allows marketers to isolate variables such as the header, image and description and use the performance data to shift the budget to the ad with the highest performing combination.

In recent years, Facebook updated its ad platform to work more like Google. Now, marketers can add several titles, captions and photos to a single ad. Each of these components appear in a frequency determined by AI, based on performance. While this saves time and the need for monitoring, it also comes at the cost of less performance data available to marketers. 

Google has expanded its options as well, introducing responsive ads for both search and display ads. This increases the number of titles to three while allowing two descriptions instead of one. Google recommends only one responsive ad per ad group, mirroring Facebook’s push for less manual A/B testing.

For now, marketers still have a choice between the old and new methods of creating Facebook Ads and Google Ads. For experienced, detail-oriented marketers, the old method of creating separate ads might be a better fit. For less experienced marketers or novice entrepreneurs, however, using multiple copy and photo options for each ad can help save time and energy without risking the effectiveness of the campaign. 

Related: WJR Business Beat with Jeff Sloan: Put the Power of Social Media Marketing to Work for Your Small Business

The fall of cookies

It all started with the EU’s General Data Protection Regulation, commonly referred to as GDPR. When GDPR went into effect in May 2018, new policies forced websites across the globe to adapt if they wanted to continue using cookies to track users. Cookies are essentially small files downloaded onto a users’ hard drive when he or she visits a specific website. 

Facebook and Google advertisers have always relied on cookies for both retargeting and gaining insights on user activity. Facebook and Google each offer a “pixel,” which is a line of code easily pasted on any website that enables cookie tracking. With the recent release of iOS 14.5, the reach of these pixels has declined significantly, forcing many digital advertisers to make significant changes to their strategies. Major advertising platforms are also making big changes: Facebook is finally sunsetting its once-essential Analytics tool, which relied on pixels to track user behavior outside Facebook.

Cookies are disappearing from all corners of the internet. So, how do marketers adapt to a world without cookies? Above all, first-party data will become the new most valuable asset for retargeting. First-party data is stored within a website, or the “first party,” as opposed to an external, or third-party, server. 

Retargeting across platforms is tough without third-party cookies, as first-party cookies are unable to track user activity on other sites. Luckily, users can be retargeted within a platform like Facebook or Google. For example, link clicks are measured within Facebook’s platform through first-party cookies while landing page views are measured through third-party cookies. Facebook advertisers planning on retargeting should optimize for internal metrics like link clicks, as opposed to external metrics like landing page views.

Google advertisers can still remarket to users across any of Google’s platforms, including Search, Display and YouTube. As a result, the best method of remarketing will soon involve targeting users within large platforms like Facebook and Google.

Beyond onsite user data, there are several other ways to nurture engagement without using cookies. Collecting email addresses via a form on a website allows marketers to engage and nurture leads from paid ads. Creating compelling, engaging content gives users a reason to return to your site to either make a purchase or sign up for your services, with the added benefit of boosting your SEO

E-commerce domination

If you sell physical goods online, you’re in luck: consumer spending via e-commerce increased by 44% in 2020 over the previous year. Naturally, with this increase in online sales comes widespread adaptations by top advertising platforms. Facebook has spearheaded this effort, with countless new features aimed at incorporating e-commerce as a major component of its platform. 

Recently, Facebook introduced Instagram Shopping, which provides Instagram sellers with a direct way of selling to Instagram users without leaving the platform. Still in its early stages, Instagram Shopping has seen high engagement, giving e-commerce sellers a powerful new way to drive sales. To make the most of Instagram Shopping, entrepreneurs should use standard social media best practices like hashtagging and closely monitoring analytics. Promoting Shop products on other parts of Instagram, such as Stories or Reels, can also help increase sales. If your reach is limited, consider using influencer marketing to promote your page and products.

On a related note, Google Shopping Ads have seen widespread success in recent years, and they’re certainly worth considering to broaden e-commerce reach. Since these ads include images and display at the top of Google search results pages, they often get more engagement than standard Google search ads. To get the best results from this powerful channel, make sure to upload high-quality images and use keyword research to determine the best product descriptions. 

Lastly, Amazon, the irrefutable champion of e-commerce, has begun to carve its own space into the paid advertising industry. Amazon ads now make up over 10% of the paid advertising market in the U.S. Naturally, the vast majority of these ads are focused on Amazon’s e-commerce platform, allowing marketers to place ads on searches for products within the site. Similar to Google Shopping, Amazon ads work best when selling physical products that are available for purchase online. Strategic keyword planning, high-quality images and detailed product descriptions are crucial to your startup’s success on Amazon’s advertising platform.

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Push for video

Since video is one of the fastest-growing digital advertising channels today, ad platforms have embraced video as the new gold standard for content with no signs of slowing down anytime soon.

To make the most of paid video advertising, you first need to create the videos themselves. Whether they’re animated or filmed live, videos can often require expensive equipment and expert skill. Renting equipment and studio space or hiring a freelance animator or videographer can ensure your video is of the highest quality while also keeping your startup’s limited budget in mind.

If you’re on a budget, take advantage of the countless free video creation services available online, including Canva and Facebook’s video creator. One important thing to keep in mind: Always make sure your videos are formatted to fit the various platforms where you plan on advertising.

YouTube Ads has grown from relative obscurity to one of the most effective ad platforms on the internet today. Run through Google’s platform, YouTube Ads allow marketers to advertise in a variety of placements on the world’s leading video streaming site. YouTube Ads are most effective when high-quality video is used and when advertisers take advantage of its especially robust targeting features.

It’s hard to discuss today’s online advertising landscape without mentioning TikTok. This rapidly growing social media platform has taken the internet by storm, especially among the younger generation. Instead of a traditional feed, TikTok’s bite-size videos are delivered to users via a next-gen AI recommendation system. 

TikTok advertising is by far the most effective platform for reaching Generation Z audiences. To advertise most effectively on TikTok, remember authenticity is key. Success on TikTok is often found through fresh, authentic and humorous content. TikTok users are acutely in tune with the platform’s rapidly changing trends, so it’s essential to stay on top of the latest fads within the app.

Key takeaways on paid advertising

Change is the only constant in the paid advertising world. Platforms are constantly adjusting to meet the demands of their users, often forcing advertisers to shift their strategy significantly. 

The key to paid advertising success is to expect this constant change. The most successful entrepreneurs are always researching, learning and exploring new digital marketing methods. By staying on top of trends and adapting accordingly, you and your business can thrive in this dynamic, fast-paced industry. 

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