What Is Paid Media? Definition, Types, Process with Examples
Paid media is defined as the purchase of ad inventory on a media channel or publisher site to broadcast your brand message and reach your target audiences. It is a form of digital advertising that i
What Is Paid Media? Definition, Types, Process with Examples
Paid media is defined as the purchase of ad inventory on a media channel or publisher site to broadcast your brand message and reach your target audiences. It is a form of digital advertising that includes sponsored content to promote a brand’s products or services.
In this article, we cover what paid media is, the types of paid media models, channels, and creatives, and the process of gaining paid media, with examples.
Table of Contents
- What Is Paid Media?
- Paid, Owned, and Earned Media: Comparison
- Types of Paid Pricing Models
- Types of Paid Media Channels
- Types of Ad Creatives
- The Paid Media Process
- Paid Media and the Future
What Is Paid Media?
Paid media is that part of marketing and advertising that requires the purchase of ad space to promote a brand to larger audiences. Brands pay for content promotion to spread their message to audiences, at scale. 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. Media acts as the channel and real estate that carries the brand message and promotes the brand or the brand message. There are three types of media – paid, earned, and owned media.
HubSpot compiled some insightful marketing statistics; let’s understand where paid media comes in:
- 63% of companies agree their top marketing challenge is generating traffic and leads
- There was a 220% increase in year-on-year ad spend on Instagram Stories
- 95% of all paid search ad clicks on mobile come through Google
- Banners, native ads, and social media ads are the top display ad types
Sponsored content through paid media helps brands promote ideas, products, and services to their target audiences. Through paid advertising, marketers can also reach users that 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.
Example: Google pay-per-click ads let you promote your content on the search engine, which acts as a suggestion to users looking for similar products or services, and more users come across your brand and its offerings.
Let’s find out all about what paid media is, the types of paid media, and its process to inspire your digital marketing strategy.
Paid, Owned, and Earned Media: A Comparison
Paid, owned, and earned media are the three ways to be seen and found in the clutter of brands present online today. Together, the three kinds of media act as the deathly hallows to give you the whole package of online coverage. Let’s understand paid, owned, and earned media and their differences.
Paid Media: It is all about paid promotions on other sites to display your marketing message and influence audiences you could never reach before. This can be done on social media, websites, blogs, publications, etc.
Owned Media: As the name suggests, it is the placement of your brand on media channels that are owned and operated by your business. This includes your websites, blogs, emails, and all other assets and owned resources.
Earned Media: Also known as free media, it is the space or coverage your brand receives due to credibility, recognition, and word of mouth. It is the ‘organic’ publicity you get without having to purchase ad space. This includes press mentions, social media recognition, content contributions by influencers, search rankings achieved through search engine optimization (SEO), etc.
|
Paid Media
|
Owned Media | Earned Media |
|---|---|---|
| Pay other sites to display your ad on their properties | Owned and operated on your business channels | ‘Organic’ publicity without purchasing ad space |
| Social media, websites, blogs, publications, etc. | Your websites, blogs, emailers, forums, social media, etc. | Press mentions, social media recognition, interviews, guest posts, podcast invitations, exclusive columns, etc. |
| Helps target and reach new users | Full control to modify ads as you go | Builds credibility and trust, and amplifies the reach |
Now that we’ve gotten a glimpse into all three media types, let’s look at the paid media model in more detail. How does paid media work? What are its types and examples?
Types of Paid Pricing Models
Paid ads are of various types, with varied payment methods depending on their function, each with different goals and results. Let’s look at the two primary pricing models for paid ads.
1. Cost Per Click (CPC)
Cost Per Click (CPC) refers to the model where an amount is paid for each click received, irrespective of the views/impressions. This performance-based metric has automatic and manual bidding that lets you set a budget or control your maximum bid amount.
2. Cost Per Mille (CPM)
Cost Per Thousand/Mille (CPM) refers to the model where an advertiser pays per thousand ad views. This applies to display ads – banners, native advertising, etc.
3. CPC vs. CPM
The two most common pricing models used today, CPC and CPM have distinctive features:
| CPC | CPM |
|---|---|
| CPC is all about the clicks and leads/conversions generated | CPM is about being seen and the impressions collected |
| Bidding focused, performance-based | Impression focused, campaign-specific goals |
| Drives conversion, direct traffic, search campaigns | Drives awareness, brand visibility, display campaigns |
Types of Paid Media
The concept of paid media has evolved to become the structured, multifaceted operation it is today. In this section, we’re digging into the various ways you can promote your brand through paid media. Here are the top five types of paid media.
1. Paid Social Media
Probably the most popular of the lot, paid social media needs no introduction. We see it in our everyday lives while scrolling through social media platforms. Almost every social platform now offers paid options, where you can pay to publish ads for platform users to see, depending on their interests, behavior, demographics, location, etc.
Most Popular Social Media Channels
Facebook, Instagram, YouTube, LinkedIn, Twitter, Snapchat, and Pinterest are the top-performing channels for paid social ads. Each offers a business account that lets you create ads, or boost existing posts. Some even let you prompt users to message you, like your page, and help you get more leads and site visitors.
Instagram, TikTok, and Snapchat are also known for influencer marketing where an influential user is approached to promote brands/products to their loyal followers and fans in the brand’s niche. Influencers are paid a negotiated amount or a percent of the sales, or some even accept gifts and goodies in return for a post about the brand.
Example: Once you sign up for Facebook’s Ads Manager, you can create and execute ad campaigns. Simply create a new campaign, select your objective, budget, audience, creative, and you’re good to go! You can also run these ads on Instagram if your account is connected and set up.
Facebook Ads Manager’s Campaign Creator
2. Search Engine Ads
These include Pay-Per-Click (PPC) and Pay Per Impression (PPI) ads. PPC are those ads that appear on a publisher’s/media owner’s site but the advertiser is charged only when a user clicks on it. These ads appear on search engine results pages almost like a native ad at the top, with an indication that it is an ad. They also appear on websites and blogs on the top, left, or right panel – or even at intervals within the content itself.
To effectively use PPC, you will first need to identify the relevant keywords and ensure the bid amount is reasonable enough not to impact your return on investments negatively. Executed correctly, your PPC ad can guarantee you pay for high-value customers with a good chance of converting.
PPI ads are charged each time your ad is displayed on a site, irrespective of interaction or being clicked upon. They are usually charged per thousand impressions, also known as CPM, as mentioned above. PPI ads can be cost-effective if your ad gets clicked on in addition to simply receiving an impression when compared to CPC ad prices.
Example: When a user searches for a keyword on Google that has been bid on, she will see the PPC ads followed by organic results on Google’s search engine results page.
Pay-Per-Click Ad on Google Search
3. Banner Ads
Banner ads, also known as display ads and web ads, are usually visual, image-based ads that show up on websites for a limited period and leads the user to the advertiser’s site or a specific landing page. This type of ad is embedded into the publisher’s website in the form of an image or gif.
The performance of the ad is recorded by its click-through ratio, that is, the number of clicks that come through to the targeted landing page from the publisher’s site divided by the number of ad impressions.
Example: Depending on targeted users’ interests, ads can be placed on sites they spend the most time on – a marketing professional can be targeted through MarTech Advisor or an HR professional on HR Technologist.
Example of a Banner Ad
4. Native Ads
Native ads are those visual or text ads that match the design, typeface, and look of the website they are on. They show up on publisher websites as In-Feed, Sponsored/Recommended Content, Search & Promoted Listings, Promoted Stories, and so on. This type of ad also includes advertorials that inform and influence conversions.
According to Outbrain, native ads get 53% more attention than display ads. This is because ad fatigue doesn’t set in, and the ad doesn’t stand out as a purely commercial piece of content. Native ads are popular across social media channels such as Facebook, Twitter, and Instagram.
Example: Forbes displays native ads that appear as Promoted at the end of an article.
Example of Native Ads on Forbes
Learn More: What Is Native Advertising? Definition, Components, Benchmarks, & Best Practices with Examples
5. OOH and DOOH
Out-of-home (OOH) advertising and digital out-of-home (DOOH) advertising reach users while they are outdoor and in public spaces. OOH has been a part of traditional advertising to reach users while they commute, shop, etc. via billboards, posters, bus shelters, benches, cinemas, etc. This channel of advertising had no digital or programmatic involvement.
Example: Apple’s infamous ‘Shot on iPhone’ campaign is seen across the globe on billboards at prominent locations
Shot on iPhone Example Image by dailybillboardblog.com
DOOH has taken OOH to the digital realm with in-store kiosks, digital billboards, digital signage, display screens, etc. The DOOH ad process is becoming more valuable today owing to increasing capabilities and effectiveness. The ads are no longer a printed banner but a neon board with fully functional screens that can even be interactive. DOOH is also programmatic, making it easier to use and measure.
A Note on RetargetingRetargeting ads rely on cookies or tracking pixels to track users and place ads of viewed but unpurchased products or accessories of purchased products. These are usually display ads and can be used to re-engage or influence a conversion.
Retargeting helps you identify website visitors that didn’t convert and create targeted ads to bring them back. These ads can also offer a reward/special offer to encourage the sale.
Example: Popular ecommerce sites use banners ads to retarget users who have browsed or searched for a product but didn’t complete the purchase. This is what I see on Facebook, because I write about martech.
Example of Retargeting Ads on Facebook
Types of Ad Creatives
For an ad campaign to perform well, multiple elements are at play but one of the most essential is the visual appeal. Since users are going to see your ad among scores of content on the web, social media, or outdoor, it’s vital to ensure your ad creative is appealing, catchy, and invokes positive emotions. Let’s look at the three main types of ad creatives you could create.
1. Text
Search ads and native ads are usually text-only and this is where your creativity needs to reach new heights to ensure you grab attention with words alone. You will need copy that is crisp, clear, valuable, or emotionally impactful to ensure your text ad gets clicked on or seen in a world of content.
2. Display
Display ads include images, infographics, gifs, presentations, email banners, and so on. Display ads are visually appealing and had proved to be the most effective post type across social media until 2017, when video took over. Display ads, however, have much potential and can be a cost-effective way of promoting your brand and offerings. Using original content and experimenting with colors and shapes that resonate with your target audience will help drive effective campaigns.
3. Video
It seems like you can’t go wrong with video marketing. It’s no secret that the demand for video is sharply increasing as is the supply, making it a powerful marketing tool. According to Optinmonster, video marketers get 66% more qualified leads per year. Videos engage users for longer durations, especially on social media, so if you’re choosing the social channel for your ad campaigns, ensure video is part of your strategy.
The Paid Media Process
Now that we know a bit more about the concept of paid media, and the difference between paid, owned, and earned media, let’s understand how it works.
The Paid Media and Programmatic Advertising Process
1. Business Needs and Goals
What is your purpose for using paid media – brand awareness, product launch, special deals/discounts, increased traffic, or to increase sales? Once your objective is clear, you are ready to make the decisions that matter.
Research and create buyer personas based on your target audience and customer data to identify which ad type and ad channel would work best to get your message across. This clubbed with the purpose of advertising sets the bar for your paid media campaign.
Spend some time visualizing what your target audience wants and their behavior and habits to identify the channels you want to use (example: search ads, social ads, OOH and DOOH, etc.), depending on the channel. When selecting the paid media channel, it is essential to choose the platform that could provide the best ROI for your campaign goals.
Example: When talking about search and search ads, this is where your SEO skills will come into play. You will need to first analyze competitors to see which keywords they’re tracking and bidding on as well. Shortlist the most relevant keywords your audience is looking for, especially long-tail keywords related to your business and its offerings, depending on the price and competition to bid on it.
If the campaign is for a unique B2C product with no specific search keywords to aim for, where the goal is to provide brand awareness based on certain demographics with a restricted budget, you could decide to start with Facebook Ads, which could be followed up by retargeting ads. Or if it’s a B2B software launch and that is competing with an existing and established market, a combination of Google search ads (since there could be direct Google searches if it’s a well-known market), social ads, and even DOOH.
2. The Advertiser
Now that your background work is done and data is collected and analyzed, you can move on to execution. This is where you enter the media buying stage as the advertiser.
With the advances in advertising technology (adtech), advertisers no longer get in touch with the seller of media or ad inventory (publisher) to negotiate rates and book slots manually. Enter – programmatic advertising. The most preferred way to run paid media campaigns, programmatic lays out an elaborate system to buy and sell media, which includes search ads, social ads, and outdoor channels – OOH and DOOH among others mentioned above.
3. Demand-Side Platform, Ad Exchange, and Supply-Side Platform
You will first need a demand-side platform (DSP). Its campaign builder tool will let you choose audience targeting criteria, budget, etc. and input your ad message. The DSP will then interact with the ad exchange to find ad inventory that matches the criteria for your ad. DSPs let advertisers manage, optimize, and analyze paid media campaigns.
The ad exchange enables trade between advertisers and publishers and media owners. Acting as a digital marketplace, the ad exchange curates digital inventory from multiple ad networks (example: Google AdSense). The ad exchange then interacts with the supply-side platform (SSP) that holds the publisher’s ad space information and takes the final call about which adviser gets the space.
The SSP is to the publisher what the DSP is to the advertiser. It also takes the final call on which DSP bid to accept based on the parameters set by the publisher, that is, page views, target audience, ad space demand, engagement levels, and so on.
Powered by artificial intelligence (AI), programmatic advertising enables users to be evaluated on behavior, demographics, cookies, etc. to identify which ad should be shown to which user. The paid media process through programmatic advertising also ensures advertisers receive real-time updates, transparency about their targeted audience, budget utilization, and protection from ad fraud.
Paid Media and the Future
Paid media examples can be seen everywhere we look, be it social media, across the web, Connected TV (CTV), Digital Out of Home (DOOH), 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, and it’s only going to increase in the future.
Staying on top of innovations in paid social media activities and Google Ads Smart Bidding will definitely help push your brand to the forefront.
Just as the internet is here to stay, the same goes for paid media and programmatic advertising. With artificial intelligence getting sharper and reducing manual effort, it will be more important than ever to invest in the ideal DSP to successfully execute your paid media campaigns.
