Online advertising Online advertising is simpler than ever before and is a really effective way of advertising your products or services. The simplest way to advertise online is to use one of the advertising solutions provided by Google and Microsoft or by social networking sites such as Facebook. Microsoft’s Bing Ads displays adverts when users search Yahoo!Bing, while Google's AdWords show up against Google searches on associated words. All these suppliers provide the tools and know-how to create, launch and manage an advertising campaign on a small budget. Online advertising remains an effective value-for-money option. Most suppliers offer a variety of ways to pay, depending on what you are trying to achieve. If you are paying on a cost per click basis, you are charged each time someone clicks on your ad. Or you might choose to pay by cost per thousand impressions (CPM), which is the fee charged each time your ad or sponsored story is displayed 1000 times. Whether you pay per click or CPM depends on whether you are looking for sales numbers or an increased number of page "likes" on Facebook, for example. All the suppliers of online advertising also offer tracking tools that help you get a clear picture of how many people are clicking on your adverts. How to get the most from Google AdWords With Google AdWords, you create ads and choose keywords that are words or phrases related to your business. The process of choosing keywords involves bidding on them, against others who want them too, so popular word combinations cost more. When people search on Google using one of your keywords, your advert may appear next to the search results. The process is very similar for Microsoft's Bing Ads. Google has 70% of the market for online advertising, so there is more competition for popular keywords, leading in many cases to higher costs for advertising through AdWords. Here are some tips for effective AdWord advertising: Only bid on keywords that are highly focused on your market. Too broad a category will result in few clicks on your ads. Set yourself a budget for your adverts and stick to it. Track every ad with Google Analytics. Look for trends and enhance your adverts to improve on your click-through rates. Test various keyword phrases until you find one that gives you the return on investment you are looking for. Often having the top slot on a search results pages isn’t the most profitable. Try positioning your advert lower down and seeing if this improves your results. Ensure your advert links to a page that has impact and instantly tells the visitor what is on offer. A well-crafted advert can be useless if your website isn’t engaging enough when the customer arrives. Work out how much it is costing you for each customer that buys as a result of the advert. This commonly called the cost per acquisition (CPA). You should know what your breakeven point is.• Never get into a bidding war for a keyword. Set your auction budget and never go over this.• You can exclude keywords from your ads. These are called negative keywords. Don’t forget, every time your ad is clicked you have to pay for this even if the customer doesn’t buy from your store. You only have a limited amount of space for your advert. So abbreviate where you can. For instance, use an ampersand (&) instead of the word'and’ as it uses fewer characters. Creating banner advertisements You might also consider placing banner adverts, which work in a similar way to traditional adverts in newspapers or on the television. The important difference is that people who click on to them go straight to what you are selling. Banner adverts may be animated or can even include audio and video. It is possible to make simple banner ads yourself using software packages such as Photoshop or you could use one of the internet-based services that offer free basic banners, such as AdKreator or Bannersnack. Bear in mind that generic banner adverts can be effective, but designing your ad for specific websites can increase its impact massively. There are practical issues to bear in mind too. Your advert has to fit within the size specified by the sites where you plan to place it. If you use photos within your banner adverts make sure you have full copyright clearance to use these. Any photos or other images you use in your banner ads need to be optimised for the web, as banner ads must load as quickly as possible. Your banner advert needs a "call to action". Phrases like "click here" can be effective at getting customers to click on your ads. Keeping a close eye on the performance of your adverts is essential. When they start to lose their effectiveness it’s time to change. If all this is starting to sound too time consuming, you can pay for banner ads to be made. Cost ranges from less than £100 for a simple ad to many thousands of pounds for a rich media interactive advert as this needs complex programming and design skills. Another alternative is to use affiliate marketing services such as TradeDoubler, Linkshare or Affiliate Future to generate the banner ads for you. Affiliate marketing allows you to advertise your products or services on other people’s websites and they earn commission if people click through from your advert and buy something from you. You will earn less per sale but hopefully will make more sales. You can also host other people’s adverts and make money when people click through and buy from those adverts. A no-cost option is to join a banner ad exchange programme to get your advert shown free in exchange for showing other people’s ads on your site. UK Banners is a good example of this type of programme. Search engine marketing service suppliers You can do your own search engine marketing. Or, as search engine marketing and the pay-per-click options are becoming increasingly sophisticated, you could engage a specialist service provider to handle this for you, allowing you to concentrate on your core business. Expect to pay £200-600 a month upwards. Companies providing search engine marketing services include: Topclick Media and Netbooster. Online advertising and search engine marketing is best carried out alongside search engine optimisation. This is involves taking steps to make sure your website appears high in the free search engine listings. For more information on this see our guides to Search engines and Website linking.