Display advertising — definition, types, and benefits

There are many different variables involved in the decision of whether your business should use display advertising as a marketing strategy. You might wonder if display advertising is worth the investment or not know what it entails.

In this article, you’ll get a definition of display advertising and a quick overview of what it looks like, including its benefits, challenges, and cost so you can know whether to pursue it. We’ll cover the following topics:

• What display advertising is
• Types of display advertising
• Benefits of display advertising
• Challenges of display advertising
• Display advertising billing

What is display advertising?

Display advertising, sometimes known as display marketing, involves the promotion of products, services, or brands through visually appealing advertisements that are displayed on digital platforms. These ads are usually a combination of text and images, capturing the attention of users and encouraging them to take action.

Through eye-catching visuals, compelling messages, and strategic ad placements, display advertising aims to engage users and generate interest in advertisements.

Display advertising can sometimes be confused with search advertising. Display advertising involves outbound marketing by proactively showing ads to users, while search advertising is an inbound marketing approach that involves displaying ads in response to user-initiated searches.

Common examples of display ads include banner ads and pop-up ads. These formats allow advertisers to visually engage with users and deliver their messages effectively.

Types of display advertising

When considering display advertising, it’s important to look at the various types of targeting and ad formats to effectively reach and engage the desired audience.

Targeting types include:

• Traditional display ads. Ads are placed on websites or apps based on demographics, interests, or location.

• Responsive ads. Responsive ads dynamically adjust their size, format, and appearance to fit different ad placements and screen sizes.

• Retargeting ads. Display ads that are shown to users who have previously interacted with a brand.

• Native display ads. Ads that blend in with the surrounding content, providing a non-disruptive user experience.

• Social display ads. Ads that are specifically designed for social media platforms, tailored to match the platform’s visual style and user behavior.
  
  Some types of ad formats include:

• Banner ads. Rectangular or square ads that are typically displayed at the top, bottom, or sides of a webpage.

• Rich media. Interactive ads that incorporate elements like animation, audio, video, or expandable features.

• Video ads. Ads in video format — often inserted before, during, or after online video content.

• Pop-up ads. Ads that appear in separate windows or overlays on top of the main content.

• Rewarded ads. Ads that offer users incentives, such as in-game rewards or access to premium content.

• Interactive content. Ads that allow quizzes, games, or product configurators.
  
  With a variety of targeting types and ad formats comes flexibility and opportunities to tailor display advertising campaigns according to the needs of different businesses.

  

Benefits of display advertising

There are several advantages to using display advertising. Among other benefits, using display advertising helps businesses:

• Increase brand awareness. Display advertising allows you to reach a broad audience. Widespread exposure helps raise brand awareness and visibility among potential customers.
• Target customers. Display advertising allows advertisers to reach their desired audience with precision using demographics, geography, behavior, and other factors to curate content, ensuring their ads are seen by the most relevant users.
• Design a full-funnel campaign. With programmatic advertising and smart bidding, advertisers can design and optimize their campaigns to effectively target customers at different stages of the sales funnel.
• Choose from multiple ad formats. Display advertising offers banner ads, pop-ups, pop-unders, wallpaper ads, interstitial ads, map ads, video ads, and more. Advertisers can select the most suitable format to capture attention and engage users effectively.
• Retarget customers. Businesses can retarget customers by displaying ads to users who have previously interacted with their brand as they browse other websites or platforms, reinforcing their message and encouraging conversions.
• Measure results. Display advertising provides robust measurement and analytics capabilities, allowing advertisers to track key metrics like reach, click-through rate, bounce rate, conversion rate, and return on investment. These insights help advertisers evaluate the effectiveness of their campaigns and perform data-driven optimizations for better results.

Challenges of display advertising

Despite its benefits, display advertising can produce some obstacles that hinder its effectiveness. These challenges include ad blockers limiting ad visibility, banner blindness leading to low click-through rates (around 0.1%), and random clicks — especially on mobile devices.

Advertisers must be cautious about potential pitfalls within their control, such as ineffective creative approaches that fail to captivate audiences and poor targeting that results in inefficient ad placements. Addressing these challenges through strategic measures can enhance the impact and performance of display advertising campaigns.

Display advertising billing

When a business starts using display advertising, they need to understand the various billing agreements that determine how advertisers are charged for their ad campaigns. Here’s an overview of the most common billing agreements:

• Flat rate. Advertisers pay a predetermined fixed amount for a specific duration or number of impressions, regardless of the performance or engagement of the ad.
• Cost per mille (CPM). Advertisers are charged based on the number of impressions their ads receive, typically per 1,000 impressions. CPM focuses on exposure and brand visibility.
• Cost per click (CPC). Advertisers pay for each click their ads receive. This billing model is performance-oriented, as advertisers only pay when users actively engage with the ad.
• Cost per lead (CPL). Advertisers pay based on the number of leads generated through the ad campaign. It’s commonly used when the primary goal is lead generation.
• Cost per sale (CPS). Advertisers are charged based on the number of sales generated that were directly attributed to the ad campaign. This model is often used in affiliate marketing or ecommerce scenarios.

Getting started with display advertising

Display advertising can be a valuable tool for businesses to enhance their marketing efforts and achieve their goals. By using visually appealing ads across various digital platforms, businesses can increase brand awareness, target specific customer segments, and measure campaign performance.

Adobe Journey Optimizer manages scheduled omnichannel campaigns and one-to-one moments for millions of customers. It helps brands intelligently determine the next best interaction with scale, speed, and flexibility across the entire customer journey — allowing companies to create and deliver both scheduled marketing campaigns and tailored individual communications all within the same application.

Get a free demo of Journey Optimizer and get started today.