Paid media: everything you need to know

media pays what is

Paid media is that part of marketing and advertising that requires the purchase of advertising space to promote a brand to larger audiences. Brands pay for content promotion to spread their message to the public, at scale. 

And in general terms, what is it for? Paid media is part of a brand's strategy to increase traffic, sales and conversions through clicks and ultimately increase revenue. 

An essential component of a digital strategy for brand awareness and revenue growth is media. 

The media acts as the channel that carries the brand message and promotes it. There are three types of media – paid, earned and owned media. 

According to Hubspot

  • 63% of companies agree that their main marketing challenge is generating traffic and leads
  • There was a 220% increase in ad spending year-over-year on Instagram Stories
  • 95% of all paid mobile search ad clicks come through Google
  • Banner ads, native ads and social media ads are the main types of display ads

Content sponsored through paid media helps brands promote ideas, products and services to their target audience. 

Through paid advertising, marketers can also reach users who are actively looking for similar services. 

Paid media includes pay-per-click ads, pop-up ads, display ads, video ads, social media ads, retargeting, and more. 

All of this allows you to promote your content on the search engine, which acts as a suggestion for users looking for similar products or services, and more users come across your brand and your offerings. 

We'll find out all about paid media, the difference between organic and paid media and how to calculate ROI within your digital marketing strategy, but for starters, let's understand what inbound marketing is. 

What is inbound marketing

The definition of inbound marketing is creating content or even experiences specifically tailored to your audience or the persona you would like to attract. This helps you connect with them in a more natural way.

The inbound marketing methodology is based on a series of non-intrusive techniques that help brands attract visitors and traffic to their sites.

While it's important to emphasize the marketing process so that conversions take less time, it's important to understand that non-invasive techniques are critical. It's about inviting the customer to come to you rather than interfering in their daily lives with aggressive advertising.

The Five Fundamentals of Inbound Marketing

To better understand inbound marketing, it is important to know the five fundamentals of inbound marketing which are: traffic attraction, conversion, marketing automation, loyalty and analytics.

1. Attract traffic

The first step is to attract users to the brand's website. However, rather than looking to generate massive visits, focus on bringing quality users to the site, users who match your ideal customer profile or shopper persona. This can be achieved through a variety of techniques such as:

  • SEO: If you work on positioning your site within the top spots of the main search engines, it will appear as an answer to the user's needs at the right time.
  • Content Marketing: Providing users with valuable content when they need it will reinforce the process.
  • Social media: using them as broadcast channels to help your content reach users.

2. Conversion

Once a user has contacted your site, you want them to leave their data, thus becoming a lead to continue receiving information.

To convert users into potential customers, the classic strategy is to provide them with valuable content in exchange for leaving their data. But there are many other options, such as offering test demos, meetings or interacting with them through a phone call or chat. Either way, the goal will always be to get your data and add your information to your database.

3. Marketing Automation

This pillar of inbound marketing is based on systematizing the process by which you communicate with your leads until they become customers. 

4. Loyalty

The process doesn't end when you manage to convert a lead into a customer. The next step is to have that customer stay with you as long as possible as a result of loyalty strategies such as newsletters, offers and incentives.

Designing an effective loyalty strategy is very beneficial to the company, as keeping a customer is much less expensive than acquiring a new customer from scratch.

5. Analyze

No inbound marketing strategy is complete if you don't have a plan for measuring and analyzing results. For this, you will have to carefully define the KPIs (Key Performance Indicators), which are the most relevant metrics to assess whether your strategy is succeeding or not.

It is also necessary to establish periodic controls to analyze the results and adjust previously established actions, if necessary. This will improve your entry strategy.

The Inbound Marketing Conversion Funnel

Inbound marketing is based on following users throughout the process from when they find you until they become loyal customers. Therefore, it is important to know in detail how this process works and which strategies are best suited for each step.

The Conversion Funnel is an essential tool for understanding this process. It is a graphical representation of the different stages of the consumer journey. Its funnel shape is due to the number of users decreasing at each step. If we want to achieve X conversions, the number of users we have to attract to the site will have to be greater than X.

Within the conversion funnel we can distinguish three main stages:

TOFU (top of funnel or first contact) 

At this stage, users only detect that they have a need that they are trying to solve. Therefore, at this stage we must have content that responds broadly to the different needs of users, such as ebooks, infographics or tutorials. We can also use advertising display campaigns, video campaigns on social media and native advertising.

MOFU (middle of the funnel, when the user is evaluating different options)

After the initial investigation, the user considers different options that could potentially satisfy their need. Here, it is necessary to offer content with a higher degree of specialization, such as interviews with experts, detailed guides, testimonials or videos that show your product. Among the most appropriate advertising strategies are email marketing, social ads and retargeting.

BOFU (bottom of funnel or closing of sale)

Here, the user is practically ready to convert. To encourage them, we can offer free trials, launch offers and expert services. SEM and social ads can be helpful here.

Paid Media: What is Paid and Organic Traffic

Organic traffic refers to visitors coming to your site through search engines – without you paying directly for it. By clicking on organic listings that appear on search engine results pages (SERPs), users are taken to your site through their own natural initiatives.

Organic traffic is just that: organic. It empowers researchers to find information online that best suits their needs without being swayed into clicking paid ads. 

Organic traffic is generated through search engine optimization. You write search-friendly content, it shows up in SERPs, users find your page and click on it.

The practice of SEO is to produce the most comprehensive, practical and useful page so that it stays on top of SERPs and organic users can find it in the most perfect way possible. 

At any time, a competitor can produce more effective content and divert traffic from your site to theirs. Thus, the main focus of SEO content should be to outperform competitors' pages and keep your pages up to date.

This is typically accomplished through:

  • Blog articles.
  • landing pages
  • Videos.
  • Infographics.

The key is to drive traffic to pages that will live on your site for a long time (or forever), which are optimized around a single keyword that provides information in a UX-adapted environment.

What about paid traffic?

Paid search engine traffic comes to websites when a user clicks on an ad placed on a SERP for a particular search term. This ad is created and paid for by a company – with the help of an advertising platform – seeking to appear first in search engines.

As you can see, the goal of both organic and paid traffic campaigns is the same: to get clicked more often than anyone else competing for the same search term.

Paid search advertising exists within an automated platform like Google Ads. Google sets a price for a keyword and then:

  • Evaluates your maximum bid (often measured as pay-per-click, or PPC).
  • Assess the relevance of your proposed ad with respect to the term being bid for.
  • It assigns a quality score, a measurement of click-through rate, landing page quality, and relevance.
  • When looking at the SERPs, you'll notice that there are often multiple ads at both the top and bottom.

So how does Google decide where to rank your ad?

Google SERP features are often incredibly targeted and marketed for paid ads.

When there is a lot of content for the same queries, Google assigns an Ad Rank to your ad, which determines the position within the SERPs where your ad will appear.

The quick formula is: Highest bid X Quality score = Ad Rank = Google position. 

It's also important to note that, in general, the higher the quality score, the lower your cost-per-click (CPC) will be. So you can really save money by making your search ads as creative, targeted and relevant as possible.

You can really save money by making your search ads as creative, targeted and relevant as possible.

What types of content are best for paid traffic?

As paid advertising requires marketing expenses, companies tend to use it more for commercial intent keywords.

Of course, if you're going to pay for ad space, you ideally want your traffic to convert to customers as well. That way you're bringing your traffic directly to your services and sales pages, shortening the buyer's journey and hopefully closing a deal.

The top four search results are all paid ads. That's because it's very clear that the searcher is looking to hire a company to write their blog content for a fee.

Thus, it follows that sales-focused content formats are more conducive to paid traffic.

These assets can be:

  • landing pages
  • Form
  • Checkout pages.

Which is better: paid media or organic traffic?

It's up to each marketer to determine, as there are definite benefits and drawbacks to each approach. Below is a chart detailing common questions as well as their answers:

Organic marketing is, by definition, an evergreen discipline. This means that once a webpage is created, it exists forever. Paid ads, on the other hand, only run when they are funded. Once budgets run out or CPCs get too high, it's no longer easy to justify ad spending. 

SEO produces three times more leads than paid search in the long run. Since organic marketing typically takes six months to show results, paid marketing is actually more profitable in the short term. 

What is more economical? Paid media or organic traffic?

What is more economical? Depending on budgets, tactics, time of year and industry, cost-effectiveness varies. However, SEO provides long-term ROI at a fraction of the cost as paid ads. 

For strategic business marketing programs, SEO is the best bang for your money. Paid ads are more commercial, and in addition, they depend heavily on seasonality and competition. 

If a new business enters your market, or your peak season becomes more competitive, your ad spend can skyrocket exponentially just to return the same ROI – but with lower margins. 

What's easiest to get started right away? Organic is a long and continuous game, but choices made today can have benefits tomorrow and every day beyond. As such, it requires more planning, talent and adaptability to possible changes in search algorithms. There is some level of technical know-how required, but a paid ad campaign is generally easier to get started. It often requires fewer people to get involved and less long-term planning.

Paid Media and Organic Traffic: Merging the Benefits of Both Sources

Often what is recommended is a marketing duality. There is a time and a place for organic and paid.

As seen above, if there is an opportunity for your company to possess a high-value keyword for commercial intent, particularly around peak season, then you would be foolish not to do so, even if it requires paid outlays. 

On the other hand, if you're looking to increase overall site-wide traffic, create shareable content for social media, and distribute relevant materials to email leads, then organic marketing is your surefire bet.

It is possible to achieve an economic balance between the two models. There are qualified leads across the entire marketing spectrum; you just need to know how to reach them.

what is a landing page

In digital marketing, a landing page is a standalone webpage created specifically for a marketing or advertising campaign. This is where a visitor “lands” after clicking a link in an email, or ads from Google, Bing, YouTube, Facebook, Instagram, Twitter or similar places on the web.

Unlike web pages, which typically have many goals and encourage exploration, landing pages are designed with a single focus or goal, known as a call to action (or CTA for short).

It is this focus that makes landing pages the best option to increase the conversion rates of your marketing campaigns and thus reduce your cost of acquiring a lead or sale.

Types of Landing Pages

You'll see a lot of variation out there depending on the specifics of the business, but there are actually two landing pages and they're defined by goals:

  • Landing Pages for Lead Generation: Also called capture pages, these use a form as their call to action. This form almost always collects data such as visitors' names and email addresses. 

B2B marketers and companies that sell high-value items use this type of landing page to build a list of potential customers. Sometimes they offer something free, like an ebook or webinar, in exchange for contact information. Ecommerce brands can also use these pages for building lists, or offering free shipping or special offers, too.

  • Landing Pages for Clicks: Often used by e-commerce and SaaS (software-as-a-service) merchants, clicked pages go straight to sales or subscription. Typically, they have a simple button like the call to action that sends the visitor to the checkout flow (like the app store) or completes a transaction.

Driving traffic to landing pages

Let's explore some of the most common sources of landing page traffic:

Paid Search Traffic

Most search engines include paid advertising. Crucially, when you create an ad then you can choose where the link takes your visitor. Yes, you could choose to upload them to your homepage. 

Paid Social Traffic

Posting ads on social media sites like Facebook, Instagram, Twitter or LinkedIn is a way to reach people as well as communities who will be particularly interested in your brand, regardless of whether they are still in the market.

email campaigns

Email is often touted as the most effective marketing channel because of its enormous reach (and low costs) compared to other platforms. 

A powerful email and landing page combo can be used to both nurture existing customer relationships and acquire new ones. Once you've built a contact list, your carefully crafted email allows you to entice readers with your offer, while the landing page fills in the details and directs visitors to a call to action.

organic search traffic

By creating compelling as well as legitimately useful content on your website or landing pages, you can ensure that your business appears more often in related searches. The bigger your content, the better.

Calling it “unpaid” is a bit misleading, however. It doesn't mean there isn't time and money invested in ranking. (If only!) There's an entire area of ​​professionals dedicated to squeezing as much organic traffic out of Google as possible through a balance of careful strategy, technical know-how, as well as brilliant content creation. That is, this is search engine optimization (SEO) in a nutshell. (Read more about landing page SEO here.)

How to calculate ROI

Proving the value of marketing campaigns can be difficult, that is, especially in the early stages of the marketing funnel, where conversions and KPIs are not directly linked to sales or revenue.

This makes it difficult to place monetary value on strategies like content marketing or individual ad campaigns that may be essential to generating leads but don't close the deal themselves.

Accurately calculating the return on investment (ROI) of each marketing action is crucial to proving that they contribute to revenue – either directly or further down the customer journey. Not only do business executives expect you to show the value of your marketing efforts in simple numbers, you also need to know which strategies are profitable.

ROI is measured as a percentage and there are numerous ways to calculate it. The most basic method of calculating ROI is to subtract your marketing spend from the revenue you generate, divide that amount by your marketing spend, and then times the resulting amount by 100. So your basic formula for calculating ROI would look something like this :

ROI = Marketing revenue - marketing / marketing spend x 100

So that's the basic formula for calculating return on investment, but in reality, accurately calculating marketing ROI is a little more complex than that and you might need to include other specific variables considering your business and your goals. 

The point is, the more detailed your ROI calculation is, the more accurate it becomes and the more insight you have to improve your campaigns' performance at every step of the customer journey.

Why is ROI so important for paid media?

ROI is one of the most important KPIs for marketers and companies. There is no free marketing strategy and, above all, you need to know that you are generating enough revenue to justify the expense of your marketing activities.

There are several reasons why ROI is so important:

Prove that your marketing strategy is profitable (or not)

Return on investment is by no means the only measure of marketing success and not a perfect KPI either. But it helps establish that marketing campaigns are profitable. 

Calculate growth potential

The second reason why ROI is so important is that it also helps calculate growth potential. 

Of course, things aren't always as simple as this one, but ROI gives you a strong indication of growth potential and allows you to identify specific marketing strategies that are worth increasing your investment.

Let's say your SEO strategy currently has a 125% ROI, while your paid advertising strategy has a more profitable 235% ROI. This gives you a strong indication that increasing your PPC budget is the most cost-effective step to take with next year's marketing spend.

Protect your marketing budget when producing your paid media

Return on investment is also a valuable measure for accurately identifying marketing strategies with underperforming or negative ROIs that can save your marketing budget – or even your entire business.

Once you've pinpointed underperforming strategies or campaigns, you can optimize them to improve performance and increase the overall ROI of your mass marketing strategies.

It works both ways, too. You can learn lessons from your high performance strategies/campaigns and then apply them to improve the results of less successful ones.

Failure as an attribute and success

Above all, ROI allows you to prove where success and failures lie in your marketing efforts. Whether you need to prove results to directors, identify successful strategies or optimize individual campaigns, ROI provides a simple, responsible measure of success.

You can use this to test new strategies, demonstrate your successes, identify failures, as well as learn crucial lessons along the way.

Conclusion on paid media

Examples of paid media can be seen everywhere we look, whether it's social media, the web, smart TV and so on. 

With paid media campaigns being the most popular form of advertising, it's hard to ignore the impact as well as the competition, something that will only increase in the future. 

Staying on top of innovations in paid social media activities and Google Ads will definitely help keep your business on top. 

Just as the internet is here to stay, so is paid media and programmatic advertising. With artificial intelligence getting sharper and thus reducing manual effort, it will be more important than ever to invest to successfully execute your digital marketing campaigns.

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