7 Cost-Effective Ad Types for Small Businesses
Running ads can be expensive, and there are so many factors to consider. Are you targeting the right audience? And running the ad effectively? And is this the right advertising campaign for your business?
It’s even harder for small businesses that have to compete against larger companies with bigger budgets.
Or insanely large budgets.
If you’re unsure which ads work best for you, you’re at the right place. With digital media, there’s a way to create effective ad campaigns on a shoestring budget. Here, we’re going to show you seven different cost-effective ad types for small businesses. For each of these ad types, we’ll let you know the function and the reasons it performs well for small business. And we’ll explore examples of companies that leveraged these ad types successfully.
But first, we need to look at why these ad types are digital and what the benefits of advertising online are.
The benefits of going digital
Although traditional marketing is critical for many small businesses, the seven different ad types below will be in a digital format.
- You can reach a substantial targeted audience online. There are 292.89 million people in the US who use the internet. This is projected to grow to 310.1 million in 2022.
- Digital advertising is cost-effective.
It costs less to reach the same number of people using digital than traditional channels.
- It’s quick to implement and remove a digital campaign. You need to plan weeks or months for traditional ad campaigns. They tend to have a start to end date. For digital campaigns, you can run a last-minute sale advertisement and take them down when you run out of stock. You have more choices and control with digital ads.
- You can track digital campaigns. You can monitor key metrics on digital ads such as cost-per-click, site traffic, bounce rate, impressions, conversions, and even cost-per-conversion. These are just a few examples. With digital campaigns, you can learn from the data and adjust your ad accordingly.
- You can update your ads instantly. It’s much easier to update a digital ad than a traditional advertising campaign. For example, if you wanted to change your Google ad, all you need to do is to log in and make the change, hit refresh, and it will reflect your new update.
Now, let’s get into those cost-effective ad types!
1. Google Search Ads
Google has a lot of advertising streams, but the one we’re talking about here looks like this.
These are search ads, one of the most popular forms of PPC. You only pay when a viewer clicks on the ad.
These ads appear in Google search results and will help you buy your way to the top of the search for a keyword, without any SEO strategies needed.
Benefits of Google Ads
- Reach people with high intent. People searching on Google have an intention to research, understand, and potentially purchase the service or product they’re finding. Advertising on Google can help you appear in front of your potential customers.
- Target a specific geographical location. With Google Ads, you can identify a few keywords and target within a particular area. If you’re a local business, this can help you gain more customers from your community.
- Target many audiences with the same product. Most businesses sell products or services that have many audiences. Google’s PPC Ads can help you reach multiple audiences with different keywords.
How much do Google search ads cost?
Google Ads uses an auction-based model. The auction determines whether the ad will show and, if it does, which position it ranks on the search page.
How does it work?
- When someone conducts a search, Google finds every keyword that matches
- Google Ads will ignore searches that aren’t eligible (e.g., different country or disapproved due to policy violation)
- With the remaining ads, those with a higher rank will appear. These include bid, ad quality, ad rank thresholds, the context of the search, and impact of extensions and other ad formats.
Google Ads rewards businesses with high-quality ad campaigns with low click-through costs and stronger ad placements.
While the average cost per click (CPC) on Google Ads ranges from $1 to $2, it depends on your location, industry, and keywords.
Google Ads example
The Berwick Shellfish company, a fresh seafood family business, was looking to drive direct sales through their website. Graham received over 250,000 page impressions in a year, a 12% increase in mailing list sign-ups, and 70-80% of his online sales, all from Google Ads.
2. Facebook Ads
Facebook is one of the best platforms to advertise on as a small business owner. It’s the world’s most popular social network, with over two billion monthly active users. Plus, each of those active users accesses the site eight times per day on average.
Best of all, you can target your Facebook ads to a specific audience of your choosing.
While there are many different types of Facebook Ads, the Mahabis example above, is a smart way to incorporate video.
We recommend exploring video on Facebook, especially since social video is shared 1200% more than images and text combined.
Benefits of Facebook Ads
- Reach your target audience at a low cost. Facebook allows small businesses to tap into their audience affordably. These ads will cost a fraction of what other online and traditional marketing channels cost. For example, when Boba Guys, a bubble tea company wanted to open up another storefront, they ran a few local awareness campaigns. They had 103 clicks on their ad at $0.20 cost per ad, $1 cost per new customer, and 9x return on ad spend.
- Target your exact audience. Facebook is one of the most targeted platforms to advertise. You can advertise to people by their location, age, education level, relationship status, interests, and behaviors. If you know who your target audience is, then reaching them won’t be a problem.
- Advertise to website visitors. It takes between six to eight marketing touchpoints to create a lead. Remarketing will help you engage with past visitors, increase marketing touchpoints, and boost your chances of receiving leads and sales.
How much do Facebook Ads Cost?
Like Google, Facebook Ads is an auction-based model. The average CPC on Facebook is $1.72. However, this varies depending on the industry.
The average cost per action rate is $18.68. Once again, this differs between different industries.
Facebook Ads example
Broccoli Pizza & Pasta, a fast-growing Italian restaurant founded in 2011 in Dubai, with over 135 stores in six countries, created a high-energy Facebook three-day campaign for National Pizza Day in 2019.
They reached 9.26 million people in three countries, which resulted in a 31% boost to their sales. They also had a 2x higher return on ad spend compared to their previous campaigns by using video and immersive full-screen ads.
3. Amazon Sponsored Products
Like Google, Amazon has many advertising options. The one we’re going to focus on here is Sponsored products.
Sponsored product ads are driven by manual keywords (words users type in the search bar) and automatic keyword targeting (Amazon’s systems target keywords for your campaign).
Amazon is now the third largest seller of ads in the US, just behind Google and Facebook.
So if you are selling products, it would be a no-brainer to advertise on Amazon so that you can reach over 100 million Amazon Prime members.
But if you’re selling a local service, probably best to skip this option and move on to the next.
Benefits of Amazon Ads
- Reach more buyers, not viewers. Amazon customers look to the website for products they can purchase. Amazon users have a higher intent to purchase than Facebook and Google users.
- Boost the sale of your products. Sponsored ads allow businesses to showcase their product in front of millions of potential customers. As your product’s visibility increases, so do your chances of boosting sales.
How much do Amazon Ads cost?
According to Rob Sieracki from Practical Commerce, the average CPC on Amazon rarely exceeds $0.35.
This makes running ads on their platform even more cost-effective than Google Ads and equals some of the lowest cost-per-clicks on Facebook Ads.
Amazon Ad example
Just Paper Roses, a small but growing business that created paper flowers for all occasions doubled the units sold in 30 days after joining Amazon advertising. They also increased the visibility of products, which included high-margin orchids and had higher sales that offset the ad spend.
4. LinkedIn Sponsored InMail
There are over 610 million business professionals on LinkedIn.
If you are a local business selling a service to busy professionals, other companies, or enterprises, then you need to leverage LinkedIn ads.
While there are many types of LinkedIn Ads, we’re talking about sending a Sponsored InMail.
Sponsored InMail ads are different from the Google, Facebook, and Amazon ads we explored earlier. The Sponsored InMail ads allow you to enter conversations and promote content like webinars, ebooks, and other assets with key decision-makers, which are a great way to nurture a relationship, especially if it involves an expensive or ongoing purchase.
Benefits of LinkedIn Sponsored InMail
- Send personalized messages to prospects. You can target audiences with relevant content through LinkedIn messenger. Furthermore, there are personalization options like what you would see in an email campaign.
- Reach engaged users. Only actively engaging users receive sponsored InMail messages. These ads are also only sent out once every 60 days so you can send messages to an uncluttered inbox.
How much do LinkedIn Ads cost?
Sponsored InMail campaigns also work as a bidding auction to reach a target audience.
You can buy LinkedIn’s Sponsored InMail messages on a cost-per-send basis (you will be paying per unit for the delivery of each Sponsored InMail.) There is a minimum total campaign budget of $25.00.
Using the example above, it will cost you from $780 to $900 to send 3,900 to 18,600 messages to a specific target audience in 30 days.
According to AltaVista’s current Sponsored InMail campaign, their:
- Open rate is 44%
- Cost is around $0.75 to $0.80 per send
- Cost per open is $1.70
LinkedIn Ad example
VistaVu Solutions is a business management software company that targets oilfield services. Within one week, the InMail campaign had a conversion rate of 23.8%.
The Display Ad and InMail campaign together generated compelling results. 19 out of the 20 leads captured just in the first week, moved in the sales funnel as qualified leads. The company’s cost-per-lead was also one-fifth the price of the company’s standard benchmark.
Not only did VistaVu receive more leads, but the lead quality was unmatched.
5. Google Maps PPC Ads
If you have a location-centric local business, Google Maps marketing may be perfect for you.
Google Maps marketing is the process of using Google Maps to bring in more customers to your door.
With over one billion people using Google Maps, there’s a good chance that your customers are using it, too.
But that’s not all.
84% of consumers conduct local searches.
75% of users who search up for a product, service, or location nearby are likely to visit a store within the next 24 hours.
And 28% of these searches end up as an actual purchase.
Benefits of Google Maps ads
- Increase store visits and calls. With local search ads, your business location can be featured at the top of local results, meaning you don’t miss out on any foot traffic from customers in the area. Furthermore, if you provide a phone number, you may also receive more inquiries and orders.
- Help customers understand more about your business. Local search ads also link to your business location page, which includes additional information like address, customer reviews, photos, and store hours.
How much do Google Map ads cost?
Google charges advertisers on a pay-per-click basis.
- Get location details
- Get Directions
While it depends on your industry, it can cost from $25 to $150 to rank at the top of the Google Maps search listing.
Google Maps ad example
When searching for hotels in Seattle, Four Points by Sheraton, a hotel chain’s Google Map Ad appears at the top with a purple ad pin. As you can see, the hotel’s price deal, rating, description, and Wi-Fi status appear at the top of the Google Map search listing.
6. Google Display or Banner Ads
Google display ads are the visual banner ads you see on advertising-supported websites. You can find them almost everywhere.
Display ads function a lot like paid search ads. They have a headline, text, and URL. But they also contain ad design—like graphics, video, or audio—that helps them jump out on the page.
Instead of appearing on search engine results, display ads appear on websites relevant to your service or product.
Benefits of Google Display or Banner Ads
- Advertise to website visitors. Google display ads allow you to remarket to those who have expressed a genuine interest in your business. Remarketing to website visitors can increase a visitor’s engagement with the brand.
- Create ads in visual and video format. Unlike Google search ads, the Google Display Network allows you to use visuals, videos, and even elements of sounds, which make for more engaging ads.
- Reach more people. The Google Display Network has over two million websites. With Google search ads, the user needs to visit Google and search for keywords. With the Google Display Network, even those who don’t use Google search can see the ads.
How much do Google Display Ads cost?
With Google Display Ads, you can choose to set the price you want to pay. Like Google search and Facebook Ads, Google Display Ads works via an auction approach.
You can choose to pay via:
- Cost per click (CPC)
- Cost per thousand impressions (CPM)
- Cost per acquisition (CPA)
Ads on the Google Display network generally have lower clickthrough rates.
The average cost per click of an advertisement on the Google Display Network is under $0.58.
Google Display ad example
Julian Bakery, a family business that produces specialty bread in La Jolla CA, used the Google Display Network. It increased their conversions by 35% and impressions by 330%. In three years that the company has advertised with Google, they have grown from 10 to 35 employees. Their revenue also doubled from last year.
7. Google Shopping Ads
A Google Shopping ad is a product listing that has your brand, product’s image, name, and price.
At times, they can also include reviews or other exclusive perks, like a discount or free shipping.
As you can see in the example, Google shopping ads appear before paid and organic search listings.
Benefits of Google Shopping Ads
- Sell more with less. Google Shopping ads have a 26% higher conversion rate and a 23% lower CPC rate than search text ads. Google Shopping ads can give your business a better ROI.
- Gain better-qualified leads. With the critical information available (brand, product image, product name, reviews, promotions), shoppers have enough data to familiarize themselves with the product. If they click on the product, they’re less likely to bounce from your site because they know what to expect.
How much do Google Shopping Ads Cost?
The price of Google Shopping Ads will depend on the amount of visibility you’d like for your products. You can dictate your daily budget and your PPC bids.
But if you’re looking to set your bids competitively, take a look at WordStream’s shopping ads benchmarks.
Google Shopping Ad example
Paper Culture, a small stationery company that sells 100% post-consumer recycled products turned to Google Shopping Ads to complement their Google Ad campaign.
As the fifth item on the right in the example above, Paper Culture used the image-centric approach of Google Shopping Ads. They managed to increase their ROI 3x compared to other channels and saw a decrease in their cost-per-lead by up to 50%.
Start testing these cost-effective ad types
Online advertising can be extremely affordable for small businesses, especially since you can set daily budgets for your campaigns. You can leverage Google, Facebook, LinkedIn, and Amazon’s network to advertise your products and services, and get in front of the masses.
Better yet, these platforms allow you to target your specific niche and audience.
So if you’re a small business keen to increase sales, make sure you take advantage of one, two, or more of these seven cost-effective ad types to find out what works for you.