Display advertising is a type of online paid advertising placed on relevant social media accounts and third-party platforms. These ads include text, images, or a video and encourage a site visitor to visit a landing page and take the desired action, buy a product, for example.

In this article, we'll explain the way display ads work, cover their advantages and disadvantages, consider their types, and provide some examples.

How does display advertising work?

Display advertising is a great marketing tool since it allows both website owners and advertisers to benefit. Host websites can monetize their traffic by selling some space with Google AdSense, while advertisers buy it with Google Ads.

Ads are served by the Google Display Network. It allows advertisers to find the right target audience and show their promotions at the right time and place. With this network, you can both find new prospects based on similar audiences and reveal the most promising audiences to blow up conversions with automated targeting. It works based on a landing page and your existing audiences.

Alternatively, you can start with remarketing. Tracking the cookies of users who leave items in their shopping cart without buying enables marketers to sell more.

Google uses two pricing models: CPC (cost per click) and CPM (cost per thousand views). It means that every time a user clicks through your ad, you're charged a specific amount of money based on your bidding strategy.

Advertisers monitor cookies and collect data from several external websites to keep track of users' activities. This data aggregation enables them to do behavioral targeting. Google also makes it possible to create contextually targeted and geographical ads. Contextual ads are only placed on sites relevant to your commercial message. For example, if you sell sports shoes, your ads can be promoted on sports stores and blogs with the audience interested in sports. Demographic and geographical targeting allows you to speak to specific audience segments that might be interested in your products. This is a great choice if you provide seasonal offers.

Now that you know the display advertising algorithm, it's time to learn its advantages and disadvantages for your business.

Advantages and Disadvantages of Display Advertising

Before creating your first display ad campaign, you should be aware of its pros and cons. Besides, this type of ad may not be the best choice to reach your marketing goal, so let’s uncover the opportunities it provides.

The biggest advantage of display advertising is its wide outreach that allows businesses to find prospects all over the world. Take a closer look at other benefits of this ad.

  • Helps build brand awareness. Unlike search advertising, display ads don’t reach audiences with the purchase intent, however, they allow businesses to make people who have never needed their product before remembering the brand. This way, they manage to evoke initial interest and let people recall it once they have a need for it. As a result, this particular brand is associated with this or that product.
  • Provides targeting opportunities. With display ads, you can narrow down your audience to the most high-performing prospects. This is possible due to various targeting opportunities available. You can reach people based on demographics, their geographical position, language, general interests, behavior, and previous interactions. The last one means that you can win back leads who liked your products and added them to their cart but didn’t buy.
  • Enables to track results. After launching your display ad campaign, you can monitor the number of clicks, get to know when a prospect converted into a client, find out the platform where conversion took place, and reveal the most effective advertisements. This is a great chance to improve your future campaigns and invest in successful strategies.

Now you might be interested in creating your first ad, but you should be aware of its disadvantages as well. So, look below.

  • Low conversion rates. Compared to search advertising, display ads show lower conversion rates. This is not a surprise, because search ads are designed for leads with the purchase intent, while display ads allow businesses to create interest in a product. So, if you aim at increasing sales, display ads may be not the best choice.
  • Lack of reputation management. Since you can’t influence much on the choice of platforms for your ads, they can sometimes be irrelevant to your business. So, you’ll be charged anyway. Besides, such irrelevant ads may irritate site visitors. If your brand is famous and authoritative, display ads on irrelevant sites may damage your reputation.
  • Banner blindness. It has become a common phenomenon for many internet users in the last few years. This helps us deal with information overload and ad fatigue. People ignore advertisements subconsciously especially when they are designed as separate blocks that strike the eye. To stand out, make use of rich media that attract users’ attention better.
  • Ad blockers. More and more people are using ad blocking technologies every day because of ad fatigue. Some brands ask them to allow ads or buy subscriptions. Consider these variants.

Now you can weigh all the pros and cons to decide which type of ad to choose. Since we’ve mentioned search advertising, let’s take a closer look at it.

Display Advertising vs Search Advertising

These advertisements are similar, yet they have some differences. The main of which is the intent of users. Let’s consider them in detail.

Search advertising is an advertisement that appears on the search engine results page (SERP) after a user types in a corresponding keyword. This ad reaches users with the purchase intent since they look for a product that a brand advertises.

Display advertising means placing ads on sites relevant to your product and target audience. This kind of ad is based on a push approach, while search ads — on pull one. It means that only users looking for a particular product come across search ads, while display ads are shown based on different targeting criteria.

Choosing the best ad to reach your goal, consider your search volume, a need to increase brand awareness, budget, and your type of business. Firstly, you need to know if the audience is familiar with your brand and product. For this purpose, you can check the search volume for the necessary keyword with tools like Ahrefs. If the volume is low, you can choose display advertising. If the audience is familiar with your brand, invest in search ads.

Secondly, decide whether you need to improve your brand awareness. If you’re an established brand and your outreach is wide, make use of search ads. This way, you will sell to customers who already know you and your product.

Thirdly, think of your budget. Building brand awareness with the help of display advertising is an expensive and long-term strategy that will bring you lower conversions than search ads could. If your business is on a tight budget, you’d better invest in search ads because they will bring you more money.

The last important factor is your type of business. If you provide local products and services, choose search ads. If a person has an acute toothache, lost their apartment keys, or their pet got sick, they will look for immediate solutions on Google and choose a company ranking high on SERP.

Now you have a clear picture of the opportunities of display advertising, so let’s discover its types for you to choose the one that fits your business.

Types of Display Advertising

There are different types, forms, and formats of display ads. To choose the most effective one, check them out below.

Based on the type of targeting, there are the following display ads:

  • demographic (based on users’ general interests, marketers create personalized ads for specific websites);
  • geographic (based on users’ location);
  • contextual (based on the theme of a website, keywords, and the ad’s topic)
  • retargeting (based on previous users’ actions, for example, they viewed your product but didn’t buy).

Based on the ad format, there’re the following types of display ads:

  • static (a traditional ad that includes text or images that doesn't move);
  • animated (a GIF);
  • interactive (implies engaging a user to take action, for example, play a game);
  • floating (kind of a pop ad which doesn’t disappear while scrolling);
  • expanding (after a user click this ad, it becomes bigger in size);
    video.

Now that you know the types of display ads, it’s time to see some examples.

Examples of Display Ads

Interactive and video display ads are becoming more and more popular since they help attract user attention and can be more engaging than traditional ads. Let's check out several examples of display ads.

Tokionomo promotes its product in the New York Times using an interactive ad to draw the attention of users. The brand offers a shelf-advertising robot that ensures a brand new type of brand communication.

Elle provides its ads space for Intertop. This is an example of contextual display ads since promoting shoes on a fashion blog seems relevant.

Display advertising

Below is an example of a retargeting ad campaign on a beauty blog. Site visitors are shown the items they have looked through previously.

Retargeting ad

Congrats, now you know the pros and cons of display ads, their types, the way they differ from search ads and have some examples at hand. So, choose the best type for your business and increase your brand awareness and sales

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