A type of online advertisement that combines text, images, and a URL that links to a website where a customer can learn more about or buy products. There are many ad formats. These ads can be static with an image or animated with multiple images, video, or changing text (also called rich media ads). An ad campaign can have different goals, and some display ads educate about the product while others are designed to entertain and engage through simple games or puzzles. Banner ads are a common form of display ads that are frequently used for awareness campaigns.
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Digital advertising is changing the face of the marketing industry. Remaining competitive in this evolving market requires a strong grasp of digital marketing in all its forms. One of the easiest ways to start is with display advertising.
What is display advertising?
You've seen display advertising before, even if you didn't realize it at the time. Display advertising appears on third-party websites and uses video, image, or text elements to market products or services.
There are many types of display advertising. Banner ads are an example of display advertising. So are desktop and mobile leaderboard ads. Most ads are rectangular or square in shape, and the content they contain is typically designed to align with that of the host website and the selected audience preferences.
Display advertising campaigns can be run through advertising networks such as Facebook advertising or Google ads that provide powerful audience targeting features as well as advertising formats (that you can also combine with search ads).
Types of display ads
Display ads vary greatly in terms of who they target and how they work. Here’s a breakdown of the different display ad options and what they do.
1. Remarketing ads
Most display ads you see today are remarketing ads, also known as retargeting ads. Thanks to the trend toward ad personalization, retargeting campaigns have become widespread.
According to Accenture Interactive, 91% of consumers prefer to buy from brands that remember their interests and provide offers based on their needs. Retargeting ads do just that, and they're easy for brands to implement. Here's how they work.
- To start, place a small section of code onto your website that collects information about visitors' browsing behavior, including when they navigate to a category or product page.
- From the information you collect, develop lists of customer types and what kinds of advertising messages would most likely appeal to them.
- Then create and place display ads based on the different categories of interest you have observed.
A dynamic remarketing campaign is an effective way to keep your brand present in the minds of shoppers who have already shown interest in what you have to offer.
2. Personalized ads
Google considers remarketing to be a subcategory of personalized advertising, which can be effective when you segment your audience to deliver a better user experience. Personalized ads target consumers based on demographic targeting and the interests they have shown online. You can even create ads that show personalized product recommendations based on a user’s recent interactions with your website.
In addition to remarketing, Google recognizes 4 distinct types of personalized ads. Each incorporates general user behavior and preferences rather than interactions with any particular brand as a targeting option.
Affinity targeting shows your ads to consumers who have demonstrated an active interest in your market. These affinity groups can be relatively broad—like “car enthusiasts” or “movie lovers”—letting you reach large numbers of people.
Custom affinity groups
Smaller custom affinity groups like “long-distance runners” and “orchid growers” let you get more specific about the interests you want to target. Bear in mind that when you use narrower groups, you’ll reach smaller audiences.
Custom intent and in-market ads
Custom intent and in-market ads target consumers who are actively searching for products or services like yours. You'll reach fewer people than with either affinity or custom affinity targeting, but the people who do see your ad will be closer to making a purchase.
Similar audience ads
Similar audience ads target people who have interests or characteristics in common with your current visitors. To create lists of new but similar audiences, Google compares the profiles of people on your remarketing lists with those of other users, then identifies commonalities.
3. Contextually targeted ads
Instead of displaying your ads to people based on their user profiles, contextually targeted ads are placed on websites according to certain criteria, including:
- Your ad's topic and keywords
- Your language and location preferences
- The host website's overarching theme
- The browsing histories of the website’s recent visitors
You can let Google make these determinations, or you can take an active role in it yourself through topic targeting.
Google allows you to pick from a list of topics and will match your ad to relevant pages on the Display Network or YouTube. It also lets you specifically exclude topics that are underperforming or unrelated to your message.
Topic targeting is a lot like affinity targeting, except that your ads are matched with websites rather than users.
4. Site-placed ads
If you'd prefer to hand-pick the websites that will host your ad, website placement targeting is your best bet. You can select entire sites or individual pages within sites.
You can even combine placement targeting with contextual targeting. With this approach, you choose a site and let Google select the most relevant pages for your ad.
Display ads versus native ads
If you count offline as well as online ads, display advertising is as old as business itself. The internet’s first ever display ad was a 1994 AT&T ad, and they've been increasing in prevalence ever since.
Display ads are still popular, but a new strategy called native advertising has begun to take some of their market share.
Native ads are designed to blend in with the other content on a page. These are especially common in social media news feeds. These ads look like regular user posts, although they are legally required to display the word “sponsored” to minimize deception.
Native ads are less obvious than display ads and can sometimes reach users who have ad blocking software enabled. They can be a great way to engage potential customers as most people respond better to content when it’s not an obvious ad. But there's always the risk that when they reach the end and find out that the post or article they just read was advertising, they'll end up feeling tricked.
Native advertising marketers also risk hiding their brand logo and information too well. There’s a chance that readers might not notice it, let alone remember it. They might remember the message—but that's not worth much if they can't recall who posted it.
Pros and cons of display ads
No form of advertising is perfect for every company. Before you decide whether or not to invest in display ads, consider the benefits and drawbacks.
Pro #1: Display ads lead to better brand awareness.
Unlike native ads that mimic editorial content, display ads are clearly advertisements. While that sometimes means that people will ignore them on principle, it also means that audiences immediately recognize that they’re seeing a message from your brand.
Pro #2: Display ads convey your message quickly.
Most display ads are based on visuals, not text. Your audience doesn’t have to read all the way through an article or infographic to get to your brand message the way they do with content marketing or native ads. Even when people scroll past these messages, they still make an impression.
Pro #3: Display ads are easy to create and place.
Compared to other forms of digital advertising, display ads don't require complex integration with publisher sites. They can go up on almost any site that's part of the participating ad network without much technical expertise.
Pro #4: Display ads reach customers at every stage of the funnel.
A well-thought-out digital advertising campaign can help you reach your target audience at any stage of the decision making process, from need awareness to purchase readiness. All you need is a knowledge of targeting methods.
For example, if you sell home appliances, you could post custom intent ads to reach people who have been searching for new models of stoves or washing machines. You could then cast a wider net by posting a contextually targeted ad on home improvement sites, real estate blogs, or even parenting forums.
Pro #5: Display ads provide great value for your money.
While relatively few people actually click display ads, they can help you reach the largest segment in your target market. Their reach is as broad as that of traditional advertising while being less obtrusive. A display ad is much less disruptive than a television or radio spot, especially if it’s been matched with relevant content.
Con #1: People don't like ads.
Consumers today believe that ads are more frequent and intrusive than they were in the past. Overt advertising makes many people feel annoyed—and when people are annoyed with online ads, they tend to use ad blocking software so that they don't see them at all.
Con #2: Display ads can be too minimal.
Display ads are meant to deliver your message as quickly and simply as possible, but their short length can work against them. Venture capitalist Gilad de Vries has found that they are most effective when they lead viewers to longform content. While display advertising is useful, it probably won’t be the real powerhouse behind your marketing strategy.
Con #3: They have relatively low click-through and conversion rates.
Click-through rates for banner ads average around 0.1%, a lower total than many other forms of online advertising. This usually translates to lower conversions.
Most people see banner ads early on in their buying journey, so they're best used as part of a long-term marketing plan. Your display ads can pique a potential customer’s interest and prepare them for more in-depth content later.
How to measure display ad performance
In order to properly allocate resources and run a successful campaign, you must determine the effectiveness of your display ads. Whether you’re using Google Ads or another platform, you can track campaign performance throughout the entire campaign and make adjustments where necessary. There are a few key metrics to keep an eye on when measuring your campaign, including:
- Impressions: Impressions are the number of times your ad was displayed on a website. Your campaign impressions should grow over the life of your advertising campaign, as this proves you’re reaching a wider audience.
- Reach: People often get impressions and reach confused. Reach is the number of individuals who saw the ad, while impressions measure the times your ad appeared on a website.
- Cost: You should always have a budget for your advertising campaign and measure cost to determine different ways to reduce costs while improving other metrics. You can measure the total cost of running the campaign, cost per click (CPC), or cost per thousand impressions (CPM). Display advertising typically uses the CPM measurement.
- Click-through rate (CTR): The number of clicks your ad generates divided by the number of impressions is the CTR. CTRs are displayed as percentages that represent how much of your audience clicked on your display ads.
- Conversion rate: The main goal of advertising is to convert. Conversion rate is the percentage of individuals that converted from the ad. Depending on your campaign, you might have more than one conversion action, whether it’s having a customer purchase a product or sign up for a mailing list. The conversion rate describes the lead conversion rate when your display ad is used to generate leads.
Best practices for display ads
As with any form of advertising, the effectiveness of a display ad depends on its design. Here are a few guidelines that will help you stay on the right track.
Be respectful of your audience's experience
Avoid autoplay video ads, pop-ups, and any ads that your viewers can't get rid of by scrolling away. These tactics will certainly get people to notice you, but not in the way you’d like. Instead, try placing a static ad near the edge of the screen or within the site’s text.
Another rule of thumb is to make sure that your ad doesn’t cover more than one-third of the screen. High ad density can irritate users by blocking the content they came to see, especially if they're on mobile devices.
Use a simple design
Your brand story is important, but display ads are often too small to include every detail. To avoid overwhelming users, stick with a simple design and use as few words as you can to get your message across.
Go for quality over quantity
Because you're only including the essentials, make sure everything looks good. Use high-resolution images, easily readable type, and a logo that's clear and bold. Remember to preview every image after you export it.
Include a strong call to action
Your call to action, or CTA, is the most important part of your display ad. An effective CTA will encourage users to click through to your site’s homepage, a specific product page, or a special promotion.
It can be tempting to create a simple CTA like “click here” or “continue,” but getting specific will make it much more effective. Here are some tips for creating a strong CTA.
- Make your CTA benefit-oriented. CTAs like “Download Our Free eBook” or “Find Out More” let viewers know that they’ll receive something of value if they click through.
- Use persuasive language. Entice your viewers with promotional items or potential discounts.
- Create urgency. Convince your audience that they'll lose out if they navigate away from your ad.
- Make the button the focus. Your CTA button shouldn’t just be easy to find, it should be impossible to miss.
Display advertising works more efficiently than most digital options out there, and it does the job without trying to pass itself off as anything else. It's honest, it's visually engaging, and it spreads your brand's message without being intrusive.
When you combine display advertising with other marketing techniques, you can reach potential customers at all levels of their journey.
Frequently asked questions
What are examples of display ads?
Display ads are images, videos, or gifs shown to users on websites or apps. Most display advertising uses square, landscape, or skyscraper formats with images, copy, and a strong (CTA) to entice users to click. Display ads resemble ads you might see in a newspaper or magazine, but they appear on the web. They can appear on articles, blogs, videos, and websites consumers browse for information. You can target over two million websites using the Google Display Network.
What are display ads good for?
Display ads are effective for remarketing to interested users. For example, you can retarget users who have recently visited or taken action on your site. They can also increase brand awareness, allowing you to reach a wide audience quickly. Display ads are used to generate interest, promote products and services, and keep your brand at the top of consumers’ minds.
Display ads also allow you to monitor and track your campaigns to reduce costs while increasing performance. For example, with A/B testing, you can uncover which headlines, images, and CTAs get the most clicks and lead to higher conversion rates.
What types of display ads are there?
There are several different types of display ads for businesses to choose from, including:
- Remarketing ads: Also known as retargeting ads, remarketing ads create a personalized advertising experience for users. Remarketing ads allow you to target distinct customer segments based on actions they’ve taken on your website.
- Personalized ads: These allow you to segment your audience based on different factors, including demographics, interests, and recent purchases.
- Contextually targeted ads: Contextually targeted ads are used when there are certain keywords, topics, languages, or browsing histories of users. For these ads, users are segmented based on different parameters.
- Site-placed ads: These ads allow you to target the websites where your ads will be placed. Site-placed ads can be combined with other forms of display ads, including personalized ads, to provide users with a better experience while targeting their favorite online publications and websites.