Online Advertising Companies: How They Work, Why They Matter

Online advertising companies specialize in promoting businesses by buying and placing ads for them on websites.

The goal is delivering for the client a return on investment based on certain business needs, such:

• Revenue
• Transactions
• Subscriptions
• Audience
• Leads
• Branding

The challenge is finding a company that delivers the best results. No medium in history is more measurable than the Internet. But the skill and experience levels of advertising companies vary greatly.

There are two types of advertising companies, and there are two paths for a business to work with them.

Whether or not the business works with an actual human being to place the ads will determine the company choice.

Advertising Networks

The first type of advertising company is an online ad network such as Bing, Google AdWords or Advertising.com.

The network provides tools for the business to place ads on thousands of websites around the country and sometimes around the world.

Those websites have already agreed to accept nearly any ad and varying amounts of revenue from those networks. Much of the work often is done without the help of a human being.

If a business wants to manage the campaign directly, it creates an account with the network, sets the budget and produces the creative.

Representatives are available for questions. But small and medium-sized budgets mean that the business is usually on its own.

If the budget is large enough, the network may assign an account executive to help with some aspects of the campaign.

If a business reaches the point of getting a dedicated AE, it’s time to consider an ad agency.

Advertising Agencies

The second type of online advertising company is an ad agency. It typically will provide an account executive responsible for placing the advertising campaign. In some cases, the agency will place the campaign on multiple networks.

In other cases, the agency will negotiate an agreement with a specific site or set on websites to place ads on behalf of the client. The advertising rates will be negotiated as well. The agency will chose the sites that have the best fit for the client.

Account executives should provide a higher level of expertise and knowledge that will result in a more effective return on investment.

That higher ROI will come at a cost in the form of the AE’s time. But it’s also time saved on the part of the business.

An ad agency representative will work with the client to determine a budget, timetable, creative, execution, measurements and reporting structure.

The cost for such a service depends in part on:

1. The size and reputation of the agency
2. The size of the budget
3. Whether the campaign is local or national
4. And the level of expertise of the account executive. (Senior account executives get the word senior in their titles for a good reason.)

If the business and target audience are local, it makes sense to look for a local agency that knows the market and understand what works in it.

That agency should have access to local talent if necessary as well as have contacts with websites where the campaigns can be placed.