Navigating the world of online advertising is tricky; there are so many options and it’s easy to get overwhelmed. Two important distinctions to consider are SEM and placement targeted ads. Below is a breakdown of the benefits and drawbacks of these two ad types:

Search Engine Marketing (SEM)
Although many things fall under the header of “SEM”, I am referring specifically to the  ads that appear through search engines. The program you’re probably most familiar with is Google Adwords. The premise is that your ad appears when people are searching for what you sell. For example, you sell vegan cosmetics. I search for “vegan cosmetics”, your ad appears, I click, I go to your site and I buy.

Pros:

• These ads are typically paid for on a cost-per-click basis. You only pay when you get traffic. If no one clicks, you pay nothing.
• You are getting visitors that are looking for exactly what you sell. In theory, this should yield a good number of purchases if your site is optimized for conversions.
• You can control your costs easily, since you choose what you’re willing to pay per click and what your ad budget is for the day.

Cons:

• This advertising method isn’t for beginners. There’s some technical know-how that’s required. You need to understand phrase matching and broad matching, negative keywords and keyword research. You need to understand click fraud and how to spot it. There are professionals who do just CPC advertising for clients because there’s so much technical know-how involved. You can learn to do your own CPC ads, but be prepared to educate yourself.
• This advertising method doesn’t really provide branding benefits. Your target market probably isn’t seeing your brand name over and over every time they visit their favorite website.

Placement Targeted Ads/Banners:
These are ads that you usually see on your favorite blogs. They tend to be standard sizes like 160×600 pixels. The idea with these ads is that your target market gets frequent exposure to your brand, and this creates brand awareness, which in turn increases traffic and sales.

Pros:

• Your brand is being seen by your target market every day. Even if they do not click today and buy, they will be so aware of your brand that they may seek out your website when they have to buy a holiday gift, etc. These ads can also yield a large number of newsletter sign ups or social media followers, which means you can market to these people over and over now that they’ve expressed an interest in your brand.
• These ads can be less expensive that other CPC ads, if you happen to get a good deal and have an ad that’s generating  a high click-through rate. Sometimes you end up only paying a few cents per click, whereas SEM ads are usually over 10 cents/click.
• These ads are somewhat less complicated than SEM ads;  they do not require tons of technical know-how, although design skills are necessary.

Cons:

• Although some placement targeted ads are CPC (Google has a CPC program for placement targeted ads), they are more often paid on a CPM or flat rate basis; this means you pay whether you get clicks or not.
• Unlike SEM, you may be advertising to people when they aren’t in the market to buy stuff, which means no matter how great your ad/products are, you may not see tons of sales immediately. Some people will make impulses purchases, but a lot of people may take weeks or months to actually come make a purchase.
• You need great design skills — not everyone knows how to design nice looking ads, and if your ad design isn’t up to par, it may not get you any clicks.

So which type of advertising should you do? Personally, I do both, and wouldn’t say that one form is right or wrong.  It’s important to understand what to expect from both so you can plan accordingly.

Co-op advertising, through sites like ishopindie.com, has been a nice middle ground for me because they have the expense of placement targeted ads shared among several businesses, but the benefits of brand visibility and impulse purchases are still there. Since I am able to track all the conversions on my site over time, I can see all the traffic from co-op placements that converts right away, and the visitors who convert weeks or months later.