What Is Paid Advertising and How Can It Grow Sales?

What if you could put your brand in front of ready-to-buy shoppers today instead of waiting months for organic traction? Paid advertising helps you reach specific audiences faster, test offers quickly, and scale the channels that actually drive sales.

There are two ways to promote your business online: organic marketing and paid advertising (also known as performance marketing).

Organic marketing includes organic social media, search engine optimization (SEO), content marketing, and word of mouth. While effective, this approach often requires patience, as building a strong organic presence takes time.

Paid advertising, on the other hand, can deliver faster results. Your business could appear at the top of search results pages and gain significant social media visibility within a short time frame.

This guide will walk you through the fundamentals of paid advertising and how to create high-performing ad campaigns for your business.

What is paid advertising?

Paid advertising is a marketing strategy in which businesses pay to display their ads to a targeted audience. The term predates the internet and can technically apply to any type of advertising, such as TV or radio advertising. However, when people use the term today, they’re most commonly referring to internet-based ads on search, social, and display networks.

Paid media platforms typically work on an auction system. Advertisers set their budget and bid for the ad space.

The most common pricing models include:

• Pay-per-click (PPC). With pay-per-click (PPC) ads—also known as cost-per-click (CPC) advertising, you pay every time a user clicks on your ad. This pricing model is widely used in search engine advertising.
• Cost-per-mille (CPM). You pay for every 1,000 impressions your ad receives, whether or not users click. This model is common in display advertising and social media ads.
• Cost-per-action (CPA). You pay only when a user completes a specific action, such as a purchase, sign-up, or download. This model is ideal for performance-based advertising.
• Cost-per-view (CPV). You pay every time a user watches your video ad, usually for a specified duration (e.g., 30 seconds). This pricing model is used for YouTube and TikTok ads.

Your bids and total ad budget determine where your ads show up on your target audience’s searches, social media feeds, or banner ads around the web and for how long.

Conversion rate is the percentage of visitors who complete a desired action, such as making a purchase or submitting a lead form. In paid advertising, improving conversion rate helps you get more value from the same budget.

Benefits of paid advertising

Paid advertising can help you grow your brand, attract customers, and increase revenue. Here are some key benefits:

• Reach. Paid advertising allows businesses to very quickly reach thousands of people. This guaranteed reach is compelling compared to organic marketing, in which the reach isn’t guaranteed. For example, Shopify’s 2024 benchmark in its Facebook ads cost guide notes an average Facebook CPM of about $13.75, though costs vary by audience, objective, placement, and competition.
• Targeting. Paid advertising platforms provide advanced targeting options. This includes behavioral targeting (e.g., serving ads to people who have already visited your site), interest targeting (e.g., serving mountain bike ads to people who’ve shown an interest in mountain biking), and keyword targeting (e.g., serving ads to people who search “mountain bikes”).
• Measurement. Paid advertising platforms have built robust measurement tools to help advertisers understand the return on investment (ROI) of their advertising. They use a mix of cookies, pixels, first-party data, modeled conversions, and platform attribution tools to estimate performance, and browser and platform privacy changes can limit precision.

Platforms can estimate or attribute purchases back to campaigns, ads, or keywords based on available tracking and attribution settings, but results are not perfectly deterministic across devices and privacy environments. This helps you understand which ad campaigns and ad creatives work best for your brand.

7 types of paid advertising

1. Search engine advertising
2. Social media advertising
3. Display advertising
4. Video advertising
5. Retargeting advertising
6. Native advertising
7. Shopping ads and automated campaign types

Here’s a quick overview of the types of paid ads:

“Understand how your audience thinks and what roles each channel plays in their lifestyle to determine what types of ads work best on each individual channel,” says Nicole Silver, director of marketing at Superpower Social. “I like to ask myself if the product ask/conversion ask is appropriate to make on a certain advertising channel, and if I was asked it as a customer, how likely would I be to convert?”

1. Search engine advertising

Search engine advertising (or search engine marketing) refers to the ads that appear on search engine results pages (SERPs) when someone searches for specific keywords.

Here’s what search ads can look like:

Search ads allow you to display ads based on users’ search intent—their motivation behind the search query (e.g., seeking information, comparing products/services, or buying). For example, a user searching for “mountain bikes for sale,” is likely motivated to make a purchase.

2. Social media advertising

Social media advertising involves paid promotions on:

• Facebook
• Instagram
• LinkedIn
• TikTok
• X
• Pinterest

These ads appear in:

• Users’ feeds
• Stories
• Reels
• Sponsored posts

Like this:

Social media ads are powered by audience data. The networks track their users’ activity on the platform to understand their interests and serve them relevant ads. For instance, if you like an Instagram post about mountain bikes, you are more likely to get served a mountain bike ad.

You can use social media ads to create brand awareness, increase audience engagement, or drive sales.

3. Display advertising

Display ads consist of banners, images, or interactive ads placed on third-party websites and apps. They target users based on their demographics, interests, and search history.

You can use networks like the Google Display Network (GDN) and programmatic ad platforms to display your ads across a wide range of news sites, blogs, and mobile apps.

Here’s an example of a banner ad on Forbes’ site:

4. Video advertising

Video advertising allows you to run video-based ads on:

• YouTube
• TikTok
• Facebook
• Instagram

You can use video ads to emotionally engage your target audience through storytelling and visuals.

Most video platforms allow you to choose the ad duration and placement—when you want your ads to show up:

• Before video content
• During video content
• After video content

For example, here’s a super long video ad of Mindvalley at the beginning of the video content on a popular fitness channel on YouTube.

5. Retargeting advertising

Retargeting ads target users who have previously visited a website, interacted with an ad, or added a product to the cart, but didn’t convert. It uses website cookies, pixels, and other tracking and attribution tools to understand user behavior, although browser and platform privacy changes can limit retargeting accuracy and audience size.

With retargeting, you can run your ads across search engines, social media, and display networks. This helps you re-engage previous website visitors and improve conversion rates.

“Use your GA4 data to discover your customer purchase timeline. If a user typically converts five days after first interacting with your brand, use this in your remarketing timelines across multi-platforms,” says Kelly Redican, digital marketer at A.M. Custom Clothing.

Learn how search retargeting works to maximize awareness

6. Native advertising

Native advertising refers to ads that blend seamlessly with platform content. They look like organic posts rather than ads. You may often see these ads on news websites, social media, or ecommerce platforms.

For example, promoted listings on Amazon are a type of native ad.

As you can see, the sponsored listing matches the look and feel of Amazon’s organic product listing. Similarly, in-feed ads on social media platforms imitate the appearance of organic content.

Compare native advertising and sponsored content

7. Shopping ads and automated campaign types

Some ad formats combine product data, creative assets, and automated placement decisions across more than one network. A clearer way to think about these campaigns is as shopping ads and automated campaign types rather than a standalone industry category called “hybrid advertising.”

Google Shopping ads are a common example. They use your product feed to show product images, prices, merchant names, and other details in Google surfaces such as Search and the Shopping tab. Depending on campaign type and network, automated systems can also extend product-led ads into display placements, but that does not make them social ads. See Google’s Shopping ads overview and Google’s product data specification guidance.

Other examples include Performance Max, which uses merchant feed assets and machine learning to assemble ads across Google inventory, and retail media product ads on marketplaces such as Amazon, where product data powers sponsored placements. In both cases, the platform is assembling or adapting creative from the assets you provide rather than manually resizing one static ad for every placement.

Use these campaign types when you have a strong product catalog, enough conversion data, and a goal such as ecommerce sales or lead generation across multiple Google surfaces. They differ from classic search campaigns, where you mainly control keywords and text ads; from display campaigns, where you buy visual placements on websites and apps; and from social campaigns, where placements run inside social platforms and are optimized around audience and creative engagement.

When using automated campaign types, pay close attention to feed quality, creative assets, conversion tracking, and reporting segmentation. Automation can expand reach and simplify setup, but it can also reduce placement-level control compared with more manual search, display, or social campaigns.

Platforms for paid advertising

Each advertising platform serves different objectives and target audiences.

Search remains a major part of many shoppers’ research journeys. Pinterest can be especially useful for visual discovery, and 85% of weekly Pinterest users have made a purchase based on Pins they saw from brands. Video ads can also improve brand recall, especially when paired with strong creative and audience targeting.

The next section shifts from ad formats to platform selection, so you can match each channel to your goals, budget, and measurement needs.

Here’s a quick reference guide to help you choose the right platforms based on your advertising goals:

How to choose a paid advertising platform

Choose platforms based on buyer intent, budget, creative resources, and how easy it will be to measure results.

• Search ads: Best when people already know what they want and are actively searching. They often work well for high-intent traffic, lead generation, and bottom-funnel sales.
• Social ads: Useful when you need to create demand, tell a visual story, or target audiences by interests, behaviors, or demographics. They usually require stronger creative testing than search.
• Display ads: Helpful for broad reach, remarketing, and staying visible across the web, but attribution can be less direct than search because users may convert later through another channel.
• Retail media: Strong for ecommerce brands selling on marketplaces or product-led platforms where shoppers are already close to purchase.

If your budget is limited, start with one or two channels that match your goal and measurement setup instead of spreading spend too thin. For example, many brands begin with search for demand capture and social for creative testing, then add display or retail media once they have enough data to scale.

That focus matters in practice: Province of Canada began paid advertising only after hitting an early growth milestone, and found the channel “gamechanging” once they partnered with an experienced advertising company to scale customer acquisition.

“So we were like, okay, we need to take advantage of this. And so we had never done any online advertising.”

— Julie Brown, Co-founder at Province of Canada (Source)

Search advertising platforms

• Google Ads. One of the most widely used search advertising platforms. It gives you access to a large pool of daily users on platforms like Google Search, YouTube, and Google’s partner networks. Set up a Google Ads campaign for your brand.
• Microsoft Advertising (formerly Bing Ads). Allows you to run search ads across Microsoft’s search network, including Bing and Microsoft-owned and partner placements. It can be a cost-effective alternative to Google Ads, especially if you’re targeting older age groups or professionals.

“I really think there’s a big opportunity right now in Microsoft ads if you are a B2B ecommerce site,” says Nigel Adams, search marketing consultant and founder of Nigel Adams Digital. “I’m seeing an upward trend in paid acquisition from Bing, at a great ROI across a few of my clients who are in B2B ecomm.”

Social media advertising platforms

• Meta Ads. Lets you advertise across Meta’s platforms, including Facebook, Instagram, Messenger, and WhatsApp. It offers a comprehensive advertising ecosystem with detailed audience targeting, multiple ad formats, and advanced analytics.
• Pinterest Ads. Allows you to promote your products with highly visual, product-driven ads in Pinterest’s search and feed sections. These ads are often a strong fit for lifestyle, home décor, fashion, food, and DIY brands.
• TikTok Ads. Helps you reach highly engaged, younger audiences (Gen Z and millennials) with short video ads. It’s an ideal platform for consumer brands running influencer marketing campaigns and ecommerce or direct-to-consumer (D2C) businesses that use TikTok Shopping and live selling features.
• LinkedIn Ads. It’s a major B2B social media advertising platform, ideal for targeting professionals based on job titles, company size, industry, and more. You can reach your audience with multiple ad formats like sponsored content in users’ feeds, text ads in the sidebar, or sponsored direct messages.

Video advertising platforms

• YouTube Ads. It’s a widely used video advertising platform that allows you to reach over 2.7 billion monthly active users on YouTube. You can run skippable, non-skippable, and interactive video ads. These ads can work well for ecommerce, tech, gaming, education, fitness, and lifestyle brands when creative and targeting are strong. YouTube advertising guide.
• Connected TV (CTV) and over-the-top (OTT) ads. These ads are displayed on internet-connected TVs (Apple TV, Amazon Fire TV) and streaming OTT platforms (video streaming services) like Netflix, Disney+, and Prime Video. You can use these ads to reach TV audiences who have switched from traditional cable TVs to CTVs or OTT platforms.

What video advertising is and how to create effective video ads

Ecommerce advertising platforms

• Amazon Ads. Allows you to promote your products within Amazon shopping results. Amazon users often show strong purchase intent because they are already browsing products, so Amazon Ads can be useful for driving conversions.
• Google Shopping Ads (Product listing ads). Lets you advertise your products directly on Google’s search results page and shopping tab. Unlike traditional search ads, Shopping Ads also display product images, prices, and store information.

“If you’re a small ecommerce brand or D2C store and just getting started with paid ads, start with your top converting products,” says Chelsea Harding, Google Ads manager at Ecom Media. “Don’t spread the budget too thin across everything you offer if it means you won’t be able to collect the data when you need it.”

Display and retargeting advertising platforms

• Google Display Network (GDN). Lets you place banner, video, and interactive ads across a network of over 35 million websites and apps. These ads are often useful for ecommerce brands that want to run dynamic retargeting or cross-channel campaigns. Create Google display ads for your ecommerce or D2C store.
• AdRoll. It is a retargeting-focused ad platform that helps you re-engage site visitors across multiple channels through display ads, social media ads, email ads, and more. You can use these ads to target and bring back customers who abandon their shopping carts.
• Programmatic ad platforms (demand side platforms). Helps you automate the bidding and buying of digital ads in real time through programmatic advertising. Unlike GDN and AdRoll, DSPs allow advertisers to access multiple ad exchanges, supply-side platforms (SSPs), and ad inventories in one place.

Best advertising platforms for launching a digital ad campaign

How to create a paid advertising campaign

1. Define your advertising goals and target audience
2. Develop your ad creatives
3. Configure your tracking
4. Launch and iterate
5. Set your budget and bidding strategy

Use these steps as a guide to create your own paid advertising campaigns:

1. Define your advertising goals and target audience

First, decide what you want to achieve (traffic, engagement, sales) through the ad campaign and the audience you want to reach. Ask yourself where your target customers get their information and what they’re interested in. This will help you identify the right ad platforms and set the budget for your ad campaigns.

“By identifying your ideal customers and where they spend time, you can run highly targeted ads and maximize your returns,” says Ilija Sekulov, digital marketing manager at DragApp. “On the contrary, broad targeting will waste your budget with little to no results.”

Let’s say, you’re a D2C skin care brand focusing on anti-aging products for people seeking age-supporting skin care and you’re looking to increase product sales through advertising. Your audience frequently engages with content on Instagram, Facebook, and YouTube. Based on this information, you may want to run Google Shopping Ads to capture high-intent buyers searching for skincare solutions.

“To optimize your ad budget, organize your campaign structure based on the profit margins of various product categories,” says Chelsea Harding. “This allows you to set different budgets and [return on ad spend] goals based on what is more profitable for you to scale into and what isn’t.”

2. Develop your ad creatives

Next, develop your ad creatives based on your audience’s preferences and target channels. For example, if you want to run search campaigns, your ad copy should offer what the searcher is looking for.

“We reach out on LinkedIn to ask our ideal customers if they’re willing to meet with our CEO and share feedback on our company direction,” says Jessica Andrews, VP of marketing at Copper. “We ask about their challenges, favorite online communities, and influencers they follow—then share our vision for the future. We record and transcribe these interviews, then use ChatGPT to extract key themes and direct quotes to craft ad copy.”

If you run social or display campaigns, your goal is to develop highly engaging visual creative that immediately catches the user’s attention and showcases your value proposition. Also, make sure you have multiple variations of ads to test and learn from.

3. Configure your tracking

Most advertising platforms include analytic tools to measure the success of paid campaigns. It is important to set these up on your website before launch to have a clear picture of success.

Depending on your business and advertising goals, set up tracking for the performance metrics that matter most. In most cases, that means installing the relevant platform pixel or tag, defining your primary conversions, verifying that events are firing correctly, choosing attribution settings, and testing everything before launch.

A practical setup checklist includes:

• Install the platform’s pixel, tag, or app integration on your store
• Define primary conversion events such as purchase, lead, add to cart, or sign-up
• Verify events in the ad platform so you know data is being received correctly
• Set attribution windows that match your sales cycle and campaign goal
• Test tracking before launch so you do not optimize against broken or incomplete data

Shopify offers built-in integrations with the most common advertising platforms:

• Meta
• Google
• YouTube
• Pinterest

You can connect your accounts to your Shopify store, and for some channels Shopify can help simplify setup. For example, Shopify’s Meta pixel documentation explains how to connect and manage tracking for Meta campaigns. For Google campaign setup guidance, Google Ads’ campaign creation documentation outlines the core steps for building and launching a campaign.

4. Launch and iterate

Once you’ve added the target audience data, ad creatives, and budget into your ad platform, you’re ready to launch your ad campaigns. After the launch, you’ll start getting the performance data—which ads are working and which aren’t. It’s best to check your ad performance at least once a week to identify opportunities to improve.

After launch, optimize methodically instead of changing everything at once. Common actions include:

• Pause or revise low-CTR creatives that are not earning attention
• Adjust bids or budget toward campaigns and ad sets that are converting efficiently
• Exclude weak audiences, placements, or search terms that are wasting spend
• Refresh creative when frequency rises or performance starts to plateau
• Review conversion lag before making major decisions, especially for higher-consideration purchases

This kind of weekly optimization can have an outsized impact. Province of Canada said tighter reporting and faster decision-making helped them stop wasting budget on weak ads and keep spend focused on stronger performers.

“Over time we have really I find like as soon as something’s not working we change it we don’t waste money on ads that aren’t working. We kind of forced the issue and we’re like we want reports on a weekly basis and we want to be able to tweak and you know perfect this. We have like an A performing ad, a B performing ad, and we’re like, we have a bunch of C’s. Let’s get rid of the C’s and try something new. You know, we give it a week and a half, and then we we’re always on it.”

— Julie Brown, Co-founder at Province of Canada (Source)

“A smarter approach is to double down on what’s already converting while internally workshopping the weaker offer,” says Jaimon Hancock, founder of Adalystic Marketing. “Use sales, CRM automation, or cross-sell strategies to support it—but don’t pull budget away from what’s driving business growth. Think 80/20 rule: prioritize where you’re seeing the most impact.”

5. Set your budget and bidding strategy

Before you scale, decide how much you can spend, what result you want to optimize for, and which bidding model fits your goal. Search campaigns often start with CPC or conversion-focused bidding, while social and display campaigns may use CPM, CPV, or CPA-style optimization depending on the platform.

Start with a budget large enough to generate learning, but small enough to control risk. Many advertisers begin by concentrating spend on a few high-priority products, audiences, or keywords, then expand once they see stable conversion data. If you are using automated bidding, make sure your conversion tracking is reliable first—otherwise the platform may optimize toward the wrong signals.

Start building your paid advertising strategy

Paid advertising gives you faster reach, sharper targeting, and clearer performance feedback than most organic tactics alone. When you pair the right platform with solid tracking, focused creative, and a realistic budget, you can learn quickly and scale what works.

Start by choosing one or two channels that match your goal, connect your tracking, and launch a small test around your highest-priority products or offers. If you’re ready to turn those campaigns into measurable sales across channels, explore Shopify’s built-in marketing tools and start growing with Shopify today.