Can Small Businesses Benefit From Online Display Advertising?

It's no secret that the whole array of online advertising options can be quite overwhelming to most small business owners. Many simply want to be at the top of the search results in Google for their desired keywords. Thus the rise and demand for search engine optimization (SEO) services. However, with Google constantly tweaking their algorithms to prevent people from gaming the system, the effectiveness of many SEO methods has disappeared. Not to mention that SEO is a zero-sum game: only one person can take the top spot, which is really the only spot that matters. If you're not in the top spot, you're pretty much wasting your time. But SEO is far from the only online marketing option for small businesses. There are a wide range of options from search engine marketing (SEM), to social media marketing on Facebook, Twitter, and LinkedIn. Another option that is often neglected is online display advertising.

Online display advertising - better known as banner advertising - has been around for more than 18 years. From a business owner's point of view, they're difficult campaigns to manage. Banner images need to be designed, which is usually a hurdle for most small business owners. Furthermore, the administration of banner ad campaigns is usually complex, involving the use of ad servers and negotiating contracts with website publishers, often with large financial commitments. When you combine all of these challenges, it's no surprise that SEO, SEM, and social media come off as much more appealing alternatives.

However, each of these alternatives also carry their own downsides. SEM, which is the most accountable channel in terms of ROI, has become very competitive with the price of clicks climbing to the point of diminishing returns for many advertisers. Google is actively trying to thwart SEO practitioners, with frequent updates to their algorithms such as the "Panda" and "Penguin" updates, so the ROI on paid SEO services is dicey these days to say the least. For social media, such as Facebook, there are now very unique challenges. Facebook as a marketing strategy for SMBs simply isn't wise, especially considering the cost of reaching your own audiences. Paid Facebook ads are getting more costly as well, but the performance of their ads have also been historically low. It's like advertising your business at a party - it probably won't work. People are there to socialize.

On the other hand, something significant has changed in the world of banner advertising. That change is a result of a process called real-time bidding (RTB), a technology that brings the targeting and granularity of search advertising over to display. Five years ago, I would have agreed that the ROI on banner advertising was generally low, especially for small businesses, but that is simply not the case in today’s online world. Real-time bidding now makes it possible for businesses to run banner campaigns that are both highly-targeted (geographically, contextually, demographically, etc.) and cost-effective (since they are priced using an auction model). When behavioral intent data is added to the equation, RTB really brings the power of search advertising to display. This has had a dramatic impact on the ability to generate returns on investment.

The easiest way for small businesses to capitalize on this new revolution in display advertising is with retargeting technology. Through the use of a small piece of code that anyone can add to their website, anonymous data can be collected and stored on all website visitors. That data can then be used to power highly-targeted banner ad campaigns aimed solely at those visitors. They say you never get a second chance to make a first impression. With retargeting, you not only get a second chance, but a third, fourth and fifth. With RTB, you only pay for individual impressions (ad views), which cost fractions of a cent, so the cost of running a retargeting campaign is a much less than the cost of a normal banner ad campaign, simply due to the highly-targeted nature.

One of the biggest issues, however, is that for the past few years since the inception of RTB, it has only been available to large brands and agencies. However, some companies have been created to solve this problem: giving small- and mid-sized businesses and advertisers the powerful tools they need to run successful campaigns. RTB has been a game-changer when it comes to banner advertising; and now it's becoming accessible to all businesses, big and small.

Ratko Vidakovic is director of marketing at SiteScout, a self-serve platform for buying banner and video ads on the web and on mobile devices.