March 20, 2024

Exploring Paid Advertising: Is Your Business Missing Out?

Is it worth diving into paid advertising? Absolutely!

Since the internet took off, it’s been a game changer for business owners. We’ve seen everything from the earliest websites to viral social media trends over the last 30 years. Despite their differences, they all share one big promise: the chance to achieve significant success.

Are Small Businesses Investing in Digital Ads?

Paid advertising, while it might seem a bit mysterious, has become an indispensable tool in the digital marketing arsenal. It’s as standard as placing an ad in the phonebook used to be or making sure your storefront sign catches the eye. It’s simply smart business. Impressively, 65% of small to mid-sized businesses have already invested in PPC ads.

If you’re among the 35% who have not yet explored paid ads, you may not be lagging behind, but you’re definitely missing out on a potentially lucrative opportunity to boost your business. We aim to clear up the fog around digital advertising. We’ll introduce you to the basics of paid ads, highlight their advantages, and tackle some myths that might be holding you back.

Let’s dive into paid advertising together, and see if it’s the right move for your business to grow.

What Is Paid Advertising?

Paid advertising is a marketing strategy wherein businesses pay money to put messaging in front of potential customers. While the term “paid advertising” can technically be attributed to any type of advertising, the marketing industry typically uses it to describe online and digital ads.

How Does Paid Advertising Work?

Many, if not most, digital ads employ a pay-per-click (PPC) model where—you guessed it—advertisers pay per the number of clicks or engagements their ad receives. There are multiple ways that this can be adapted to fit a certain marketing strategy, but at their core, most paid ads typically surround an idea that you pay per target result.


There are multiple ways to ensure that the right audience is seeing your ads—these methods of narrowing down users to your preferred audience are called “targeting.” The most common form of targeting is setting parameters to narrow down your audience by geography and other demographic information.

Topic- or keyword-based targeting has shifted strategies over the years. However, the method typically still centers around the idea that advertisers indicate a search phrase, keyword, or topic they want to show up for.

Many platforms offer advertisers the opportunity to leverage their current data—this is called “retargeting” users. Meaning, that if someone has interacted with you previously, you can show them a customized ad. For instance, if you were to shop online, add a t-shirt to your cart, and leave without purchasing, you may see an ad for that exact t-shirt later on another platform.

Another example of retargeting is a home service company wanting to encourage their existing clients to upgrade their current program to the next tier of service. If that business were to upload their list of ideal contacts, they could then target those specific customers with an ad for their upcoming special on the next payment tier.

Some platforms offer other more detailed methods of audience targeting, but these are the ones you’ll encounter most.

Types of Paid Ads

The Benefits of Paid Advertising for Small to Mid-Sized Businesses

Immediate Visibility and Traffic

Other marketing methods, such as organic social media and SEO-focused content writing, often take weeks or months to gain traction. Paid advertising works in harmony with SEO to reach target audiences within minutes, allowing for immediate exposure while other marketing strategies reach their full potential.

Targeted Reach

Targeting empowers advertisers to maximize their marketing budget’s efficiency by focusing on users with the highest likelihood of converting into customers.

Measurable Return on Investment (ROI)

Unlike traditional advertising, digital ad platforms provide accurate data regarding the number of potential customers who have seen and engaged with your ad. Moreover, when combined with website tracking, small to mid-size businesses can track exactly how much they spend to gain a lead.

Flexibility and Scalability

The immediacy of paid advertising allows advertisers to adapt their marketing strategies in real time to optimize performance and scale their budgets based on the needs of their business.

Common Concerns and Misconceptions about Paid Ads

I Can’t Afford Paid Ads

To avoid over- or underspending on your paid ads, it’s important to determine exactly how much you’re willing to pay for a lead—this is your cost-per-acquisition (CPA). Analyze your overhead, profits needed, and other costs associated to discover your CPA. Once you determine that, multiply your CPA by the desired number of additional leads per month to establish a healthy starting budget.

To create a more accurate picture of your potential ad costs, you’ll need your sales team’s closing rate. In digital advertising, a closing rate refers to how often you make a sale per number of leads received. For example, if your team closes three sales for every five phone calls or lead forms submitted, you would have a 60% closing rate.

With these two metrics, all you need to do is multiply them together to determine your ideal cost-per-lead (CPL). If you know that you have a CPA of $100 and a closing rate of 60%, all you need to do is multiply them together and you know you have a CPL of $60—meaning you can pay up to $60 for every phone call or lead form submitted and still be profitable.

Still uncertain? Discover the projected cost of Google Ads in 2024.

I Won’t Get a Great ROI

The best way to avoid losing your marketing budget on paid advertising is to have clearly defined goals for your cost-per-conversion and reliable tracking of those conversions. Once you can identify which leads came from which source of ads, you can see the cost-per-lead to ensure profitability.

It’s Going to Take Too Long to Get Started

It’s true that a strong digital advertising strategy doesn’t just happen overnight. However, the beauty of PPC advertising is any budget you spend can be directly connected to a guaranteed user view.

Even just “boosting” your most recent Facebook post by a few dollars can immediately increase your reach. How would your business grow if 100 more people knew about you by tomorrow morning? Your small budget can still make an impact in a short amount of time, and with refinement, you can make your budget work even harder for your business.

I Can’t Beat Companies with a Bigger Budget

While it’s true that some businesses have more money to spend on advertising, they still need the same amount of strategy to stay profitable as you. In other words, with the right amount of planning, strong brand messaging, and research, your business has the ability to carve out a place in the digital advertising sphere where you can grow your business as much (if not more) than the competition.

Avoid Falling Behind the Competition with PHOS Creative

Exploring a new platform or marketing channel can be daunting, but falling behind more innovative competitors would be even scarier. It’s time to explore the wide range of paid advertising options available and position yourself as a leader in your industry.

Ready to launch your first campaign? Not sure where to begin? Our team has crafted exceptional ad strategies for businesses big and small, across all budgets—and we’re ready to do the same for you. Ask the experts at PHOS how your small business can benefit from paid advertising.

Julie Anne Christmas Kimble

As a Search Marketing Specialist, Julie Anne is passionate about using storytelling to communicate a client’s brand effectively. She believes in the power of clear messaging and interpersonal relationships for building a client’s engaging marketing strategy.

When away from her desk, you can find Julie Anne looking at airplane tickets, planning a dance party, or singing in the praise band at church. Her travels include over 10 states and 6 countries, but she is always looking to add another stamp to her passport. She loves her family, baking, and singing at the top of her lungs while driving.