Paid Search Advertising Versus Paid Social Media Advertising

Anyone can see that Internet-based advertising saturates the World Wide Web these days, but many small business owners do not understand how the different types of digital marketing can boost sales or otherwise spur customer engagement. If nothing else, small business owners should familiarize themselves with paid search advertising and paid social media advertising. Both of these digital marketing strategies have proven highly effective at capturing new customers and boosting customer engagement.

Paid search advertising has experienced dramatic growth during its near-30-year history. Social media advertising has enjoyed equally impressive growth since it emerged almost 20 year ago. As for which form of digital marketing might work best for your small business, know that these two forms of advertising can complement each other, which means that both might serve your interests. Read on to learn more about differences between paid search advertising and paid social media advertising, and a brief summary of how each evolved.

How They Differ

Paid search advertising allows companies to show advertisements on search engine results pages (SERPs). Based on a pay-per-click model, paid search advertising relies on keywords and key phrases to determine SERP placement of individual ads. Most paid search ads are text-based and look similar to SERPs, though typically prefaced by an “Ad” notice. However, paid search ads can also be similar in format to display ads on the results pages. They can show logos, product images, or a mapped location. In recent years, paid search advertising has increased the ability to target customers based on demographics. A few examples are location, age, search history, device used, and other parameters.

Paid social media advertising consists of display-like ads found on newsfeeds and other social media pages. Social media advertising targets users based on their interests, social media activity, age, and other demographic factors. It is typically more visual than paid search advertising, and often include videos and interactive features. Social media advertising also allows for more design and content creativity. Such advertising can connect in some way with “trending” topics can prove highly effective.

Brief History of Paid Search Advertising

When the World-Wide Web emerged as a powerful information and communications portal in the 1990s, efforts to monetize it led to the creation of thousands of Internet-related companies (and a subsequent dot-com bubble bust). Advertisers also jumped onto the monetization bandwagon, with several companies in the mid-1990s developing paid-search directory listings that were similar in structure to the “Yellow Pages” (remember them?).

In 1996, a long-since defunct company called Planet Oasis developed what was the first Internet “pay-per-click” (PPC) search advertising model. Other companies quickly offered their own versions of PPC advertising. Meanwhile search engine efficiency was quietly being boosted by a new company called Google, which was developing a revolutionary algorithm for indexing website pages. By 2000, Yahoo was the leading search engine and GoTo was the leader in PPC advertising. However, Google that year launched its own PPC program—“Adwords” (now called “Google Ads”)—to its highly efficient and fast-growing search engine.

A confluence of events over the next few years led Google to become the dominant search engine and paid search advertising leader by 2004. First off, the bursting of the dot-com bubble in 2000 essentially destroyed thousands of other potential competitors. GoTo found it increasingly hard to compete because it had to sell its services on other search engines. And Yahoo just couldn’t compete with Google’s superior search engine and constant innovations.

As of today, Google captures more than 90% of global Internet search traffic. Bing and Yahoo come in a distant second and third in market share. Google’s massive search engine market also allows it to dominate paid search advertising. This accounts for a significant portion of its $200-plus billion in annual earnings.

Brief History of Paid Social Media Advertising

While organic social media marketing has been in play since long-defunct social media site “Six Degrees” launched in 1997, “paid” social media advertising was not offered until Facebook introduced it in 2005. This was followed by LinkedIn and other social media companies in subsequent years. While annual social media paid advertising spending topped $1 billion by 2010, it really took off after 2012. That’s when Facebook made adjustments to its Newsfeed algorithm that made it harder for companies to organically promote themselves on the site. Other social media sites have since followed suit and total spending for paid social media advertising is expected to top $55 billion this year.

With more than 4.4 billion people logging onto a social media site daily, organic marketing on social media is still a significant means of encouraging customer engagement. However, with algorithms that can limit organic reach, and with the ability to distinctly target market audiences, paid social media marketing has proven to be an effective means of engaging with customers most likely to convert.

Which is the Best for Your Company?

Paid search advertising and paid social media advertising are equally effective at engaging customers and boosting sales. The primary difference between the two is how the advertising works in the sales process. Paid search advertising works especially well for those customers who already know what they are looking for. Paid social media promotes brand awareness and customer engagement.

Consult with Moxxi Marketing to Boost Your Online Marketing Efforts

Whether through search engines or social media, organic marketing should be a core component of your digital marketing strategy. To significantly enhance your digital marketing efforts, though, you should consider paid search advertising and paid social media advertising. To learn more about how your small business can optimize its digital marketing efforts, consult with Moxxi Marketing. Contact us today at 239.330.6236.