Display Advertising

What is Display Advertising?

Display advertising is a form of online advertising created with a combination of visual elements, including  text, animations, videos, photographs, or other graphics. These ads are typically displayed on websites and mobile apps. 

Unlike traditional offline ad types (such as billboards and print ads) which typically aim to increase brand or product awareness , display advertising can drive  immediate action from viewers. Display ads often direct users to the advertiser’s website where they can further engage and move down the path to conversion.

What Are the Different Types of Display Ads?

Display ads come in a variety of forms, shapes, and sizes (literally) — and each type serves a different purpose and audience.

Banner ads, also known as image ads, appear positioned on websites in the header, footer, or sidebar. Banner ads were the original form of display advertising and remain the most common across the web today. The first banner ad was placed in 1994 by AT&T on HotWired, the then-online version of Wired magazine. 

Credit: Wired.com

Originally, all banner ads were 468 pixels wide by 60 pixels deep, but today, they are available in a number of standard sizes. Horizontal banner ads (like the original form) are usually placed on the top of a webpage to draw the most attention from the viewers. Vertical banner ads, which are visible to viewers as they scroll through the webpage, are typically placed on the right side of the page.  

Banner ads are also used in mobile apps as a source of revenue for app developers. The size of mobile banner ads differ from those on the web as they adapt to smaller, mobile screens.

Native Ads

Native ads are advertisements that match the look and feel of the environment where they are displayed. The term “native advertising” was first mentioned by venture capitalist Fred Wilson at the Online Media, Marketing, and Advertising Conference in 2011. However, the history of native advertising can be traced back to 19th century print ads. 

Credit: Outbrain.com

Because native ads usually match the surrounding content’s visual design, layout, and style, they blend in on the webpage rather than stand out. This makes them feel less intrusive to viewers compared to traditional banner ads. And because native ads are more contextually related to surrounding content, they more closely match the audience’s intent.

Video Ads

Video ads emerged as televisions became more mainstream in the 1940s. Today, TV is only one of many media channels where advertisers place video ads, including websites and social media.

There are two types of video ads: in-stream and out-stream. In-stream video ads appear within the context of the streaming video, such as ads on YouTube and TikTok. Out-stream video ads appear outside of any streaming content, similar to standard banner ads.

Rich Media Ads

Rich media ads include advanced features like video, audio, animations, or other elements that encourage viewers to interact and engage with content. They’re typically formatted with HTML5, the latest version of the Hypertext Markup Language that powers modern web applications. Therefore, rich media ads are also often referred to as HTML5 ads.

Static vs. Dynamic Ads

Display ads can be classified by format as well as static or dynamic. In a nutshell, static ads are ads that don’t change based on target audience, while dynamic ads can be personalized based on the target audience’s behavior. 

Static ads are easier to create and provide advertisers with complete control over their design. On the other hand, dynamic ads tend to be more relevant and engaging with their target audiences. Dynamic ads are particularly useful for retargeting campaigns, where creative can be personalized based on the audience’s browsing behavior on the advertiser’s website. 

Both static and dynamic ads can be used strategically on their own. However, when advertisers use a  combination of the two, they’re able  to create a cohesive and nurturing experience for potential customers while putting their brand center stage. 

How Does Display Advertising Work?

Publisher vs. advertiser

The buying and selling of display ads involves two parties: publishers and advertisers. Publishers are the websites or mobile apps that host and display the ads, while advertisers are the brands who create and purchase ad space from the publishers. In other words, publishers are the sellers and advertisers are the buyers in a display ad transaction. 

There are three ways for an advertiser to acquire ad space from publishers: direct deals, via ad networks, and programmatic advertising. 

Direct deals

As the name suggests, a direct deal is a direct transaction between the publisher and advertiser. This type of transaction typically involves very prominent publishers, such as wsj.com, and very large brands. Since there is no intermediary between the seller and buyer, ad price is negotiated directly between the publisher and advertiser. Direct deals allow the publisher to get the best selling price and the advertiser to access the most valuable ad spaces from the publisher.  

Ad networks

An ad network is a company that aggregates advertising inventories from multiple publishers and sells them to advertisers. Rather than buying ads directly from publishers, advertisers buy ads from an ad network, which then sells to various publishers. With an ad network as the intermediary between the sellers and buyers, advertisers can launch their ads on multiple websites or apps without dealing with each publisher individually.

The largest and most well known ad network is Google Display Network (GDN), which is a collection of more than 2 million websites, videos, and apps. While 2 million may seem like a large number, it’s only a fraction of the internet, which is estimated to house more than 1 billion websites

Programmatic advertising

Programmatic advertising refers to the way ad inventories are traded via an automated auction mechanism between publishers and advertisers. The trading takes place on a digital marketplace called an ad exchange, which works similarly to the NASDAQ stock exchange (instead of buying and selling company stocks, advertisers and publishers trade advertising spaces).

Advertisers can access the ad exchanges via programmatic advertising platforms such as Google’s Display & Video 360 (DV360) and AdRoll. In addition to facilitating the ad bidding process, programmatic advertising platforms also provide audience targeting, creative management, performance reporting, and other functions for managing ad campaigns. 

Advantages of Display Advertising

A key advantage of display advertising is its open ecosystem. Compared to other forms of digital advertising — such as search ads and social media ads, of which each channel is controlled by a single company — display ads work on the open internet. 

Extensive ad inventories = broader reach

Because display ads can run on any website or mobile app, advertisers have access to a huge pool of ad inventories from a wide variety of publishers. Not only does this keep display advertising costs low, but advertisers are able to reach vast amounts of people across their target audiences. 

Wide variety of ad formats

While certain advertising channels such as search support only a limited number of ad formats, display ads are available to advertisers in a variety of formats. Ranging from simple static banner ads to dynamic rich media ads, advertisers can choose the ad formats that best suit their campaign goals and budget. 

Support of numerous targeting methods

There are numerous ways to target your audience using display ads. Demographic, interest, or lookalike targeting allows advertisers to reach potential customers based on characteristics of existing customers. As Google phases out support of third-party cookies in the Chrome browser, contextual targeting — which doesn’t rely on cookies or other individual identifiers — will play a more important role in prospecting campaigns. 

Retargeting is another effective method used to reach audiences who’ve already interacted with an advertiser and bring them back to the brand’s website.

Choice of many advertising platforms

The open nature of display advertising means advertisers aren’t forced into using any particular platform. Especially in the realm of programmatic display advertising, advertisers have a wide range of advertising platforms to choose from. Advertising platforms from major software providers, such as Google (DV360), Microsoft (Xandr), and Adobe (Advertising Cloud) are popular among larger enterprises. For medium-sized organizations, AdRoll is a well-received option. 

Benefits of Display Advertising to Businesses

Audience targeting across the entire marketing funnel is a major benefit of display advertising. 

Boost brand awareness and interest

Integrating display advertising into your branding campaigns offers many advantages.  Firstly, it enhances brand awareness by positioning your brand in front of a larger audience across various digital platforms. Using contextual or demographic targeting, you can effectively reach potential customers who may not have been aware of your brand otherwise. And when you place different ads with consistent branding across relevant websites and apps, your brand becomes more recognizable and memorable to potential customers.

Drive new traffic from potential customers 

Reaching potential customers who are in the market for your products and services and bringing them to your website is arguably the most important function of marketing. Using lookalike and other behavioral targeting methods, advertisers can place display ads wherever their potential customers are across the internet.  

By incorporating display advertising into prospecting campaigns (along with other digital channels, such as search ads and social media ads) advertisers can increase their reach and improve the overall click-through rates. 

Improve conversion rates

Regardless of whether your marketing goal is to sell a product or capture leads, chances are your potential customers won’t convert on their first visit to your website. At the bottom of the marketing funnel, retargeting campaigns can help.  

Retargeting enables advertisers to target people who have visited their website but have not converted. Advertisers can use dynamic display ads to customize the content of retargeting ads based on an individual user’s browsing history on the website. 

Retargeting campaigns with dynamic display ads are highly effective in keeping your brand, your products, and services on top-of-mind and bringing potential customers back to your site to convert. 

6 Steps to Create Effective Display Advertising Campaigns

1. Campaign goals: What do you want to achieve?

The first step is to define your campaign objectives. Do you want your campaign to drive conversions, attract new visitors, or increase brand awareness? Having a clearly defined campaign objective is crucial because it directly impacts how performance is measured and optimized. 

2. Target audience: Who is your campaign for?

Once you choose your campaign goals, the next step is to define who your target audiences are. Successful digital advertising campaigns depend on having specific target audience segments that match the campaign goals. By leveraging targeting methods like demographics, behavioral, lookalike, and contextual, advertisers can ensure their messages reach the most relevant audience for their products or offerings. This kind of accuracy increases engagement, leading to better overall campaign results.

3. Message and creative design: What is your campaign about?

Unlike traditional ads, digital ads demand instant viewer interaction and response. Your advertisement has a brief window of time to pique viewers’ attention and drive action. Therefore, in order to convey your message to your target audiences, your ad must effectively connect with them. 

Eye-catching imagery is often used in display ads to draw the audience’s attention. Use concise, straightforward, and persuasive dialect in your ads to communicate the product or offering’s value propositions. 

When you need to convey a more complex idea or create an emotional connection with your target audiences, consider using video or rich media ads, of which incorporate movement and sound. Utilizing a combination of animations, videos, imagery, and audio, advertisers can create highly engaging content that connects with their target audience. 

For retargeting campaigns, consider using dynamic ads, which automatically customize the advertisement based on the viewers’ prior browsing behavior, whenever possible. 

4. Call-to-action: What action do you want your audience to take?

Ultimately, you’ll  want your audience  to take certain actions after seeing your ad. To achieve this, you’ll need to create  a compelling call-to-action (CTA) that encourages consumers to take the intended action, such as visiting your website, buying something, or subscribing to your newsletter. 

An effective CTA typically has two elements: the incentive and the sense of urgency. You need to convey the benefits of the action (e.g., getting an additional discount) and the reason to act immediately (e.g., time-limited offer) in your ads to incite action from your audience.

5. Budget allocation: How much do you want to invest in the campaign?

When it comes to advertising budget, you may think the larger the better. In reality, it’s a little more complicated than that. 

Allocating the appropriate budget to retargeting campaigns is particularly important because there is a finite number of target audiences who have visited your website or app with a certain level of conversion potential. In most cases, you’d want to increase your budget as long as your campaign’s return-on-ad-spend (ROAS) or cost per acquisition (CPA) is above certain thresholds. 

Brand awareness and prospecting campaigns, on the other hand, have a larger target audience base compared to retargeting campaigns because you are not limited by the existing traffic to your website or app. In these cases, you’d want to maximize your reach to your potential customers while keeping the advertising cost, such as cost-per-mille (CPM) or cost-per-click (CPC), below certain thresholds. 

You can use our ROAS calculator to get a customized budget recommendation for your business. 

6. Performance tracking: How well does your campaign perform?

Your advertising campaign is not complete without reliable performance tracking. Performance tracking may sound like a no-brainer, but it can get tricky depending on campaign goals, your conversion definition, and attribution methods. 

First, you need to have a clear definition of “conversion” for each advertising campaign and related objective. For bottom-of-funnel (BOFU) campaigns, such as retargeting, conversion is usually defined by a purchase or lead captured on the advertiser’s website or app. For top-of-funnel (TOFU) and middle-of-funnel (MOFU) campaigns, and particularly for industries that have a longer sales cycle, conversion can be defined by visits to the advertiser’s website or visitors who meet certain engagement goals (such as adding items to the shopping cart or watching a video for at least 10 seconds).   

Then, advertisers need to determine how a conversion should be credited to a campaign. Should the campaign use click-based attribution, view-based attribution, or a combination of both? What is the appropriate lookback window? How should the conversion credit be allocated if there are multiple campaigns involved? 

Advertising performance is based on two elements: cost and return. The cost of an advertising campaign is the ad spend, which is very straightforward. The return of the campaign, however, could vary vastly depending on the factors previously mentioned. As a result, the campaign performance tracking is only reliable when the conversion definition and attribution method are set accurately. 

Pro Tip: If you aren’t satisfied with your display ad performance, here are additional tips to help you improve your display advertising campaigns.

Display Advertising Challenges and Considerations

Display advertising, while incredibly effective, is not without its challenges. Some common obstacles marketers face are ad blindness, ad blockers, and ad fatigue. 

Ad blindness

Ad blindness is a broad phenomenon where individuals become accustomed to ignoring all types of advertisements, regardless of their messaging or frequency. This occurs due to the sheer volume of ads encountered in daily life, leading individuals to naturally filter out advertisements as they navigate through various media channels. Because it reduces the effectiveness of display ads, ad blindness presents a serious problem for advertisers. 

If they want to prevent ad blindness, advertisers must work to make their ads stand out from the crowd and grab viewers’ attention with relevant messaging, eye-catching imagery, and strategic placement.

Ad blockers

Ad blockers are software programs that allow users to stop advertisements from appearing on websites. These applications function by removing or obscuring advertisements from the user’s view as they browse the internet. Internet users seeking to improve their online browsing experience by getting rid of unnecessary ads have been utilizing these on an increasing basis. Ad blockers benefit users, but they pose a significant challenge for advertisers, given that they limit the exposure and viewership of their display advertising campaigns. 

Ad fatigue

Ad fatigue happens when consumers are repeatedly exposed to the same ad, leading to decreased engagement and performance over time. 

It's important to note that ad fatigue differs from ad blindness and ad blockers. While ad blindness refers to a general tendency to overlook all ads, ad fatigue concerns the weariness induced by repeated exposure to a particular ad. Ad fatigue weakens the impact of advertisements that do eventually reach the audience, hence decreasing their effectiveness. 

Consider the following scenario: a clothing store launches a digital marketing campaign to promote its newest eco-friendly clothing collection. The target audience first responds favorably to the advertisements, significantly increasing website traffic and boosting purchases. 

But eventually, when consumers see the same advertisements over and over again on different websites, some prospective buyers begin to grow weary of them. The initial intrigue and excitement fade away, and users become tired of seeing the same advertisements everywhere they go online. Consequently, the likelihood of them clicking on the advertisements or interacting with the brand’s content decreases, which lowers the campaign’s overall effectiveness.

The clothing store may need to change its targeting tactics to reach new audience demographics, rotate various ad formats, or replace its ad creatives regularly to fight ad fatigue. In doing so, they can preserve the value of their digital advertising campaigns by ensuring that their ad material is exciting and unique.

With ad blindness, ad blockers, and ad fatigue becoming more prevalent, advertisers should investigate alternative avenues for advertising or use techniques to get around ad blockers and ensure their intended audience sees their ads. 

Ready to Ace Display Advertising?

Brands can effectively leverage display ads by positioning themselves strategically and timing their presence efficiently. Even with exceptional products or offerings, a brand’s revenue can stagnate if its audience remains unaware of them. Display advertising is a pivotal tool for brands aiming to enhance awareness and drive conversions. 

AdRoll’s marketing platform provides you the tools to manage your advertising campaigns. Need additional helping hands or advice? Our experts are here to help you succeed.