What is the Best Online Advertising Platform?
A clear hierarchy to aid your decision making
In my career, I have worked closely with 100s of companies on their paid advertising campaigns, ranging from mom-and-pop shops to billion-dollar brands. One of the most common questions is, “What is the best online advertising platform?” or “Where should we run ads to grow our business?” Through much hands-on experience and reflection, I have arrived at several surprising conclusions I rarely see repeated elsewhere. This article will share my findings and thoughts on selecting an online advertising platform.
For anyone not interested in reading the full article, you can find a summary with all of the key points below:
TLDR Summary
Key Conclusions:
Paid Online Ads Don’t Work for Everyone: Many businesses see break-even or negative ROI from online ads.
Hierarchy of Ad Platforms: There is a clear ranking of online advertising platforms based on their effectiveness at driving ROI. The article introduces key factors that matter: targeting the right person, at the right time, with the right message, and at the right price.
The Hierarchy of Online Advertising Platforms
Strong Intent-Based Search Platforms (Google Ads & Amazon Ads)
Why They're Effective:
Right Time & Right Person: Search-based intent platforms target users actively looking to buy, making them more likely to convert.
Right Message: Advertisers can precisely tailor ads to match search queries, increasing relevance.
Right Price: Cost-per-click (CPC) pricing means you only pay for users with some level of interest.
Low-Cost Social Platforms & Weak Intent-Based Search Platforms (Facebook, Instagram, Microsoft Ads)
Why They Work:
Right Message & Right Price: Ads are non-intrusive and relatively cheap on Facebook and Instagram, and dynamic formats allow for quick testing and adjustments.
Issues:
Right Time: It's hard to catch users at the moment of purchase intent on social platforms.
Right Person: Targeting is more generic (e.g., broad demographics or interests), so not all users are ideal fits.
Microsoft Ads: Similar to Google Ads but lacks the precision in matching queries to relevant ads.
High-Cost Social & Video Platforms (LinkedIn Ads, YouTube Ads)
LinkedIn Ads:
Right Person: LinkedIn excels at pinpoint targeting based on job titles and companies.
Right Message: Precise targeting increases the relevance of messaging.
Issues:
Right Time: Not a search-based platform, so timing isn’t optimal.
Right Price: High cost-per-click (CPC), often $15 or higher, making it difficult for most brands to achieve a profitable ROI.
YouTube Ads:
Right Message: Video ads provide an opportunity to tell a more comprehensive brand story.
Issues:
Right Time: Timing is an issue as most viewers aren’t actively looking to buy.
Right Price: Cost-per-thousand views (CPM) is higher, and many impressions are not valuable due to skipping ads or passive viewing.
Direct Buys & Programmatic Advertising
Direct Buys:
Right Person: Ads can target specific sections of niche websites, but overall targeting precision is still limited.
Right Message: Premium placements give good visibility but face challenges like "banner blindness."
Right Price: Often comes with high CPMs and minimum spend requirements.
Programmatic Advertising:
Right Price: Typically offers lower CPMs but lacks transparency on audience targeting, and ads may not always be viewable.
Right Person & Message: Similar to Direct Buys but less effective due to lack of control over targeting and viewability.
Key Takeaways:
Optimize Top Platforms First: Max out spending on top-tier platforms like Google and Amazon Ads before exploring lower-tier options.
Ad Spend as Investment: Treat advertising dollars like financial investments, seeking a solid return, and understand that lower-cost options sometimes deliver better ROI.
Full Article
Two Conclusions About Paid Online Ads
My first conclusion is that paid online ads are not a good fit for many brands, as I describe in detail here. Many people who make a living exclusively off advising brands on paid online ads would undoubtedly push back on me here. But this is a perfect example of the classic phrase, “Don’t ask the village barber if you need a haircut.” I have worked with way too many businesses where online ads produced a break-even (and often, negative ROI) to believe that they are always a slam-dunk success.
The second conclusion I have arrived at is that, as a high-level rule, there is a relatively clear hierarchy of which online advertising platforms are likely to be most effective at producing a solid ROI for your brand (note: I am talking purely about driving ROI; strict brand awareness is a different story). It is a well-known and frequently repeated phrase in the marketing world that a successful marketing campaign involves targeting the “Right person with the right message at the right time.” Operating solely off this maxim results in articles like this, where all platforms are presented as equally valid depending on your target market and goals, and you are left with more questions and answers. The fundamental issue with this article and the classic phrase that inspired it is missing an essential element. It should instead read: “Right person with the right message at the right time at the right price.”
This might sound trivial, but it is essential - allow me to explain. Let’s say you are considering running Display Ads (or Banner Ads) on one of two websites. The first website looks horrendously bad, and you are a bit embarrassed to even show up there. For this exercise, we will say that you intend to run ads on the joke site, The Big Ugly Website. The second website is a premium site that makes you beam when you think about it - let’s say it is The New York Times.
Without a doubt, for almost any product you can think of, you are more likely to find “the right person at the right time” to hit them with “the right message” on The New York Times versus The Big Ugly Website. However, let’s say you are paying on a Cost-Per-Click (CPC) basis and The Big Ugly Website is 20x cheaper. You might get 10x the conversion rate on The New York Times and still come out behind, as shown below.
The critical point here is that being a savvy marketer today requires a mindset similar to that of a savvy investor. You are investing dollars into an ad platform in exchange for a financial return, and all the details matter to turn a profit.
The Best Online Advertising Platforms
As stated above, there is a clear hierarchy regarding the best-performing online advertising platforms for most brands. I will break down the hierarchy by first discussing some high-level principles to consider and how those principles fit into the framework of “Right person with the right message at the right time at the right price.” The chart below has the following index: green = strong, yellow = medium, and red = weak.
#1 - Strong Intent-Based Search Platforms (Google Ads and Amazon Ads)
Arguably, the most challenging thing is finding someone at “the right time,” followed by finding “the right person.” Robust intent-based search platforms, such as Google Ads and Amazon Ads, solve these problems very effectively. Searches like “Purchase new _____” indicate that someone knows what they want and is ready to pull the trigger. Furthermore, since they have shown through their search intent that they are in the market to buy, you can be firmly aware that they are “the right person”.
Regarding “the right message,” Google Ads and Amazon Ads are also fantastic for this since they allow you to custom-tailor your ad messaging and landing pages to be tightly aligned to a user’s specific search query. For example, someone could search “Best price for blue lawn chairs” on Google, and you could serve them an ad promoting “Affordable blue lawn chairs.” This ability to match the user intent to ads and landing pages so precisely is only possible with intent-based search platforms. Finally, these platforms enable you to do the above at “the right price.” They charge on a cost-per-click (CPC) basis, so you only pay if prospects have some baseline level of interest, and the CPCs are typically reasonable.
#2 - Low-Cost Social Platforms + Weak Intent-Based Search Platforms (Facebook / Instagram Ads, Microsoft Ads)
Facebook and Instagram Ads have a few things working in their favor. First, you can generally target prospects with “the right message.” The ads are primarily non-intrusive and blend seamlessly into the user’s Newsfeed or Stories, making the ads more likely to be seen. You can also quickly do ad testing at scale, especially with the dynamic ad format, making it easy to identify the best type of messaging to appeal to your target audience. Second, with pretty low CPMs (i.e., cost per thousand ad views), these platforms enable you to target users for “the right price.”
There are two issues, though. First, targeting someone at “the right time” is problematic. Most people have incredibly short attention spans, and even if you hit the perfect customer with the ideal ad, if the timing is wrong, they will forget about you pretty fast. Next, these platforms do a decent, but not fantastic job, of allowing you to target “the right person.” As I discuss here regarding “audience market fit,” most online ad platforms (including Facebook and Instagram Ads) allow you to target generic audiences like “sports fans” or “lookalike audiences,” with little clarity as to how the audience was built and who is in it. As a result, only a portion of these audiences are likely to be a good fit for your product or service.
Microsoft Ads (formerly, Bing Ads) is a search-based intent platform like Google Ads and Amazon Ads, which makes it an excellent option for targeting prospects at “the right time.” With relatively low CPCs, it also checks the box for “the right price.” However, compared to Google Ads or Amazon Ads, Microsoft Ads is far worse at matching user queries to suitable ads and landing pages, giving it a low score for “the right message.” For example, someone might search “Best surfboard shop in San Diego” and get matched with an ad for “Best beach sandals in San Diego.” Still, the fact that you can still target high-intent users at the right time gives Microsoft Ads a decent grade for finding “the right person.”
#3 - High-Cost Social Platforms and Video Platforms (LinkedIn Ads and YouTube Ads)
LinkedIn Ads is a platform that is absolutely fantastic in some ways. It offers exact targeting, for example, serving ads only to employees of a specific company whose job titles match particular criteria (e.g., “C-Suite at Stripe”). This is possibly the best platform for finding “the right person.” LinkedIn also excels in “the right message”, since the precision of targeting and the B2B angle of the platform increases the odds that your message will land with your audience.
LinkedIn falls short regarding “the right time” and “the right price.” “The right time” is fairly trivial: any platform that is not a search-based intent platform will struggle to serve ads to users when they are ready to buy. However, the thing that absolutely cripples LinkedIn for most people is targeting users at “the right price.”
It is typical for Cost-Per-Clicks (CPCs) to be $15 or higher on LinkedIn. For many brands, this is an immediate dealbreaker. Compared to Google Ads, where CPCs are usually closer to $3, LinkedIn would need 5x the conversion rate to compensate. It rarely delivers on this. Furthermore, suppose you intend to run LinkedIn ads and drive a direct purchase. In that case, getting a conversion rate over 10% takes a lot of work. With a $15 cost-per-click and an optimistic 10% conversion rate, you are looking at a minimum $150 cost-per-purchase, which may be manageable for high-ticket B2B brands, but rules out a good chunk of the market.
In my experience, YouTube does a decent job of “the right message” and “the right person.” For the “right message,” the ability to flesh out a full brand story and communicate your brand value is compelling. Still, many viewers skip over video ads, and even those who ‘watch all the way through’ may have their sound off or are not actually at their computer. For “the right person”, you can target people who watch specific YouTube videos or follow YouTube channels, which is nice. However, most channels have a relatively wide range of viewers, so there is no pinpoint precision.
Like LinkedIn, the two areas where YouTube falls short are “the right time” and “the right price.” “The right time” has already been explained. Regarding “the right price,” CPMs on YouTube are around $15 on average. You are paying for many views where users watch just a few seconds, views with the sound off, or people who change tabs or leave their computers when ads run. However, videos usually leave a stronger impression than static banners. YouTube also has pay-per-view ad formats (e.g., TrueView), giving it a medium score here.
#4 - Direct Buys and Programmatic Advertising
The fourth tier includes Direct Buys and Programmatic Advertising, which are usually, but not always, forms of Display advertising. Direct Buys involve striking a deal directly with a website or network of sites to run your ads on their site(s), usually at a minimum spend level and for a predetermined placement on the site. Programmatic Advertising involves using an ad-tech platform like DoubleClick Bid Manager (DBM) or The Trade Desk to purchase ad placements on websites across the entire internet.
For Direct Buys, you can find “the right person” by running ads on a specific part of a niche relevant website. Still, all sites get a wide range of visitors, so I would give a medium grade here. “The right message” is another middling area. Direct Buys often get premium ad placement on a page, so they have a good chance of being seen. However, many people also have banner blindness, so even a premium placement is insufficient to ensure you get noticed. “The right time” is hard, but the biggest issue is “the right price,” as most Direct Buys have very high CPMs and usually require a minimum spend, often in the thousands of dollars.
Programmatic Advertising, in my experience, does a poor job of “the right person”, since the Audiences and Contextual Targeting are black boxes that do not give you much clarity on who is being targeted. “The right message” is poor because, besides banner blindness, you may be paying for non-viewable impressions (meaning your ad was not even visible on the user’s screen at any point). “The right time” is also a miss, but programmatic ads are at least usually pretty affordable on a CPM basis. Like the above example about “The Big Ugly Website,” I would put Programmatic on a level playing field with Direct Buys, since Programmatic’s CPMs are usually 5x-10x cheaper.
Conclusion
While most resources on the internet claim that all online advertising platforms are equally valid, I hope I have made a clear case that there is a general hierarchy of effectiveness. While this hierarchy is not black and white and has plenty of exceptions, it is accurate in most scenarios. When thinking of your larger strategy, it is typically beneficial to max out your spending on platforms higher up in the hierarchy, at least until you hit diminishing returns, before moving on to lower-tier platforms. Running awareness campaigns to build your whole funnel is only valid at higher-spend levels, as described here, so keep the hierarchy in mind and focus on ROI first and foremost.
In my next article, I will discuss the viability of new or novel ad platforms, such as TikTok Ads, Nextdoor Ads, Reddit Ads, and more, and how they compare to traditional online advertising platforms.
As someone who runs a small business, this was incredibly helpful! Thank you! 👏👏👏