Online marketing, also known as internet advertising, has created a new era of opportunities. It has benefited not only businesses but also many individuals. It has now become a common and primary way of advertising for almost all kinds of organizations.
In 2013, out of a total USD 5.56 billion spent on media ads, USD 0.6 billion was spent on digital and mobile internet advertising. This grew to USD 1.52 billion in 2016, from a total of USD 7.03 billion. In 2019, this spending is expected to reach USD 3.4 billion from a total ad expenditure of USD 8.53 billion.
On the other hand, digital marketing is incredibly cost effective as well. In India, if you want to make your ad reach to 2000 customer, it will cost you around USD 250 to do so using a newspaper ad. In such a task, a magazine ad would cost USD 500 and direct mail would cost USD 900. But if you want to reach 2000 people through social media, it will cost a meagre USD 75 to do so. Isn’t it a great thing?
Major Types of Digital Advertising
Digital Advertising offer multiple advantages over traditional marketing. It is not just cost effective, but more engaging as well, and everyone is realizing its rising effectiveness and significance.
So today, we are going to dig into the meanings of both these forms and look at if any one of these is better for both merchants (the seller) and ad hosts.
Whenever you use Facebook, Instagram, Twitter or any other social network, you see numerous sponsored posts or tweets in your news feed. This is nothing but display advertising. In the simplest of words, display advertising means showcasing your product or offerings on some other website.
What happens in this method is that the merchant contacts a display advertiser (we have seen the examples above), creates an advertisement, and pays some amount of money (as per the terms of the host). Then, the host displays the advertisement on their platform.
The downside is that even if somebody clicks on your ad or not, even if it creates any impact or not, you will have to pay the fixed amount of money to the advertiser. On the other hand, the good thing about this is that the ad hosts display ads only to relevant customers, and not to every other person.
How Does Affiliate Marketing Work
The ad hosts make use of their users’ browsing history, browsing habits and cookies to identify the most relevant content for their users. If your preferences of audience match with the browsing habits of any user, then the advertisement will be shown to user. So one thing that the merchant can be sure of is that his/her ads will only be displayed the people who are actually interested in that product.
But since you are paying a fixed fee for displaying your product, it is very important that you make your ads attractive. If the ad is not engaging or appealing, all your money spent on the ad may get wasted. Therefore, before going for display advertising, just make sure that you have a crisp and magnetic ad to make the most of it.
Have you ever wondered how these coupon providing groups on Whatsapp earn money? Or how these deal/coupon sites are able to operate themselves even when we do not pay anything to them? Well, their way of making money is via affiliate marketing.
Affiliate marketing is almost similar to display advertising, but with two major differences. One is that the fee here is not fixed, rather it is a ‘pay per purchase’ model of advertising. Additionally, the content here is not created by the merchant. Rather, the ad host may (or may not) create the content here and post the link to your product with their content.
So basically, affiliate advertising is a mode of advertising when someone other promotes your product and you pay commission to the promoter when the sale made using the link that he/she posted.
How Does Affiliate Marketing Work
So as a process it may look like this – First you create an option of affiliating on your website, the potential advertiser may reach your website and get the link for the product he/she wants to advertise, then, the advertiser create any content to advertise your product. If somebody sees that ad, clicks on the link and makes the purchase, you will have to pay some commission (as per your terms) for every such sale done.
Affiliate marketing is a great way to enhance your business as at the moment, it contributes to more than 15% of the total sales in e-commerce. Its success can be known by the fact that in 2014, when major e-commerce sites like Amazon, Flipkart and Snapdeal experimented by offering incremental earnings to their affiliates, all the three sites witnessed an increase of 200% in their traffic, which can surely be credited to their affiliate marketing.
So affiliate marketing is a simple and effective tool of advertising in which there is more chances of the costs matching the benefits for the merchants. This is a beneficial tool for those advertisers who do not sell anything, like bloggers, youtubers and all such people.
Display Advertising vs Affiliate Advertising: Which One to Go for?
Well frankly speaking, there is not hard and fast rule to choose any single of these. It is all subjective and depends upon parameters like type of product, margin the merchant makes from sales, quality of advertising content that you can create etc.
If you go for display advertising, we recommend you to have at least two features. Firstly, you should create nice and catchy ads that actually work, and secondly the host that you choose, has some good amount of relevant traffic for you. By relevant traffic we mean that the audience of such host must be such that they are interested in your product.
On the other hand, if you go for affiliate marketing, you need to make sure that you have enough money to pay for the commission. If you are selling products with a low margin, then affiliate marketing may actually worsen the situation than making it better.
And lastly, we would say that both these forms of ads have their own benefits. You may go for both of them to make the best out of these and take your business to new heights.