Introduction

From banner ads to pop ups: display advertising is unavoidable, and every internet user, whether using a desktop or mobile device, encounters it on a daily basis. As the original means for online advertising, display ads have undergone a drastic transformation in recent years. Thanks to real-time auctioning, retargeting strategies, and the arrival of other new techniques, this traditional form of advertising is still an integral part of a robust marketing mix. Find out more about the basics of display marketing, the latest trends that are driving the industry, and the growing resistance against ad blockers. 

Definition

The term display advertising encompasses all marketing techniques that involve graphic elements within the advertisements. These include video and animation as well as more traditional media, like banners and images.  

The most important players in display marketing are advertisers and publishers. Advertisers seek to promote their companies, products, or services, while publishers offer up their resources (ad space) in exchange for money. Different advertising forms are booked via a display network on third-party websites. These ads are then displayed according to the terms and conditions that were agreed upon by both buyer and seller prior to the purchase. But before this step can be carried out, a thorough target group analysis needs to be done in order to make sure that the ads are displayed in the proper environment.

Goals of display marketing

The goal of most advertisers is to provoke a reaction from their viewers. Online, users most often end up reaching the advertiser’s site or a specific landing page by first clicking on some sort of advertising material. Additionally, a well-positioned ad can help influence a company’s overall reputation. This is where we really see striking differences between display advertising and SEA and SEO strategies. While search engine marketing mostly revolves around texts, display marketing deals primarily with images. The visual character of ads both individualize and strengthen the image of companies and their brands.

Forms of display marketing

There’s much more to display advertising than just your good-old-fashioned banner ad. In addition to methods like banners and buttons, graphical elements, like text, image, or video content can also be used. There’s a difference between display ads and mobile ads, with the latter format being used for mobile devices. Here’s an overview of some typical advertising forms used in display marketing:

• Banner: the sizes of banner ads can vary, and they can feature static, animated, or interactive designs. An overview of different types of banner ads can be found here.

• Pop-up: advertising screens that ‘pop up’ when a user carries out a specific action, like scrolling over a certain word. This method relies on JavaScript.

• Pop under: works the same way pop up ads do, but appears after a website has been closed.

• Layer ads: unlike pop ups, which open a separate window, layer ads cover a site’s entire content.

• Content ads: these are banner ads that are embedded directly into the content of a page.

But this is only a small sample of the different types of display ads, as display marketing offers an extensive arsenal of different formats that vary from one another in more ways than just an ad’s form, size, and position. Depending on which advertising strategies a company pursues, interactive advertising, storytelling marketing, or cross-media marketing can also play significant roles.

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.

Billing models for display advertising

The principles behind display marketing function in a similar way to those of the print advertising sector: advertisers book advertising space and the publisher then runs an ad there. The billing process used for display advertising is more exact; here, different parameters are involved. If calculated according to the performance marketing model, then the CPM (cost per mile) is used. In theory, the advertiser pays in units of 100 individuals who’ve been exposed to their ads. Recently, success-based billing models have become more common; these only require advertisers to pay when users click on an ad or finalize a purchase or contract (CPS).

Typical billing models for display advertising are:

• CPM = cost per mile

• CPC = cost per click

• CPL = cost per lead

• CPS = cost per sale  

Pros 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.

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.

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.

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.

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.

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.

Cons of display ads

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.

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.

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.

Guidelines to design an effective display marketing campaign

1. 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.

2. 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.

3. 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.

4. 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.