Online advertising

Online advertising lets businesses of any size put a message in front of a chosen audience, often within hours, and see exactly what happens next. It ranges from text ads in search results to video ads in streaming services, sponsored posts in social feeds, banner ads on websites and ads in apps and podcasts. Used well, it's a powerful complement to SEO, social media and email. Used carelessly, it can burn through money fast.

This guide explains the main types of online advertising, how to plan and measure a campaign, and the rules that apply in Australia.

Types of online advertising

Search ads appear in search engine results, usually marked as sponsored, when people search for terms you bid on. They reach people who are actively looking, which makes them effective for services people search for when they need them, such as emergency plumbers or accountants at tax time.

Social media ads appear in feeds, stories and videos on social platforms. You target them by location, demographics, interests and behaviour, or by uploading customer lists or retargeting website visitors, subject to platform and privacy rules. They suit building awareness, promoting events and products, and reaching people who don't yet know they need you.

Display ads are image, animated or video ads on websites and apps, usually bought through ad networks. They suit awareness and retargeting, but clicks are often less valuable than from search ads.

Video ads run before or during online videos and on streaming services, including broadcaster video on demand services.

Other formats include shopping ads showing products with prices, ads in podcasts and digital audio, sponsored content on publisher websites, and marketplace and directory listings.

How ad auctions work

Most digital ad platforms sell space through automated auctions. When a person searches or scrolls, the platform considers the advertisers competing to reach them, how much each is willing to pay and how relevant and useful each ad is likely to be. Higher-quality, more relevant ads can often win placements at a lower cost. You typically pay per click, per thousand impressions or per action, depending on the campaign type.

Planning a campaign

1. Set a goal. What do you want people to do: call, book, buy, sign up, visit? Choose the campaign type that matches.
2. Define the audience. Who are you trying to reach, where are they and what are they searching for or interested in?
3. Set a budget. Decide your maximum daily or total spend and stick to it while you test.
4. Create the ad. Write clear, specific ad copy with a strong reason to click. Use good images or video.
5. Prepare the landing page. Send people to a page that matches the ad and makes the next step easy. Many campaigns fail because of a poor landing page, not a poor ad.
6. Set up tracking. Make sure you can measure conversions such as enquiries and sales.
7. Launch, measure and adjust. Review results regularly, pause what isn't working and put more budget behind what is.

Budgets and costs

Costs vary widely with competition. Keywords in competitive industries can cost far more per click than niche terms. Set budget limits in the ad platform, and watch spending closely in the first days of any campaign. Calculate how much you can afford to pay for a customer or lead, based on what a customer is worth to you, and judge campaigns against that figure rather than against general benchmarks.

Targeting

Good targeting shows your ads to people likely to care. For search ads, choose keywords that match what your customers search for, and add negative keywords to exclude irrelevant searches. A dentist might exclude "jobs" and "course", for example. For social ads, start with location and a clear audience definition. For local businesses, target the areas you actually serve.

Avoid targeting so narrowly that your ads barely run, or so broadly that budget is wasted on people who will never buy. Test and refine.

Measuring results

Install conversion tracking so you know which ads lead to enquiries, bookings and sales, not just clicks. Key measures include:

• Click-through rate: the share of people who saw your ad and clicked.
• Cost per click: how much each click costs.
• Conversion rate: the share of clicks that became enquiries or sales.
• Cost per acquisition: how much you spent for each enquiry or sale.
• Return on ad spend: revenue from the ads compared with what you spent.

Be careful attributing results. Customers often see several ads and channels before acting, and platforms may each claim credit. Compare platform data with your own records of enquiries and sales.

Advertising rules in Australia

Online advertising is subject to the same laws as other advertising. Under the Australian Consumer Law, businesses must not engage in misleading or deceptive conduct or make false or misleading representations about price, quality, benefits, origin and other matters. Prices in ads should generally include all compulsory charges. Fine print shouldn't contradict the main message. The ACCC enforces these rules and has taken action over misleading online ads, fake reviews and hidden fees.

Industry self-regulation also applies. The AANA Code of Ethics covers advertising in all media, including digital and social media, and Ad Standards considers complaints about advertising content, such as discrimination, violence, sexual content and health and safety. Specific codes and laws apply to advertising to children, food and beverages, alcohol, therapeutic goods, cars and gambling, among others.

Ad platforms have their own policies, which may be stricter than the law. Ads for some products or services require certification or are prohibited altogether. Read the policies before you create ads.

Privacy and tracking

Much online advertising relies on tracking people's behaviour across websites and apps. If you use tracking pixels, retargeting or customer list uploads, explain this in your privacy policy, follow platform rules and comply with the Privacy Act where it applies. Browsers and devices increasingly limit tracking, so advertisers are relying more on first-party data and aggregated measurement. See our privacy and online advertising guide.

Ad fraud and brand safety

Some ad impressions and clicks come from bots rather than people, and ads can appear next to content you wouldn't want to be associated with. Use platform controls to exclude unsuitable content and placements, review where your display ads appear, and watch for unusual click patterns. Choose reputable platforms and networks.

Testing and improving

Small improvements add up. Test different headlines, images, calls to action and landing pages, changing one element at a time so you know what made the difference. Let tests run long enough to collect meaningful data before deciding. Keep notes of what you've learned about your audience: the messages and offers that work in ads often work elsewhere in your marketing too.

When to hire help

Ad platforms are easy to start but complex to master. If your budget is significant or results are disappointing, consider a qualified specialist. Keep ownership of your ad accounts and data, ask for transparent reporting of spend and results, and understand how the provider is paid.

Common mistakes

• Sending ad traffic to your home page instead of a relevant landing page.
• No conversion tracking.
• Leaving campaigns running unchecked.
• Broad keyword targeting without negative keywords.
• Misleading pricing or claims.
• Letting a provider own your ad account.

Key points

Choose the ad type that matches your goal, set clear budgets, target carefully, send people to relevant landing pages, track conversions and judge campaigns by cost per result. Online ads must follow the Australian Consumer Law, industry codes and platform policies.