Display advertising uses images, banners, videos, pop-ups, and interactive media to target audiences on websites, social media platforms, or mobile apps. It uses targeting options to reach specific demographics based on location, interests, or browsing behavior. It aims to capture users' attention and generate awareness or interest in products, services, or brands.
Our guide explains everything about display advertising: what it is, how it works, and what's required to create an effective campaign that drives sales.
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Native Ads vs. Display Ads
Global online advertising spending is expected to reach $835 billion by 2026. Display ads of different types can be found all over the internet, as they engage viewers and boost sales.
There are two main types of digital display advertising: native ads and display ads. They have different characteristics and objectives:
Native Ads
Native ads blend seamlessly with platform content, offering an organic experience. Their characteristics include:
- Integration within articles, social media posts, and in-store formats like Facebook or Instagram stories.
- A focus on engaging the audience with valuable and relevant content that aligns with the platform's user experience.
- A non-disruptive approach, aiming for a natural integration into the user's experience.
Display Ads
Display ads are visually distinct and aim to capture attention quickly. Their features are:
- Appearance as banners, images, or videos on various platforms.
- Clear intent to promote products or services with persuasive messaging, striking visuals, and strong CTAs.
- Reliance on their visual impact for quick message conveyance and brand recognition. They often use eye-catching visuals and multimedia elements.
- Easier creation and placement process compared to native ads, allowing for rapid development without needing complex integrations or extensive technical expertise.
Both ad types serve different purposes and should be chosen based on campaign objectives, target audience, and overall advertising strategy.
Display Advertising Types
Display ads offer brands versatile ways to reach online audiences with visually compelling content. They vary significantly depending on the targeted audience, format, content, and other factors. The ten primary display ad types include:
- Interstitial ads
- Banner ads
- Video ads
- Interactive campaigns
- Personalized ads
- Custom intent ads
- Lookalike ads
- Contextual advertising
- Dynamic ads
- Retargeting ads
1. Interstitial Ads
Interstitial ads are one of the most common display and programmatic advertising formats. These display ads appear as hyperlinked, image-based ads that take up the whole screen. These advertisements show after a user action and before the next desired web page loads. They take up the whole screen, effectively capturing the user's attention, and typically require interaction to dismiss.
While highly effective for brand visibility, interstitial ads can be intrusive if poorly timed, leading to user frustration or ad avoidance. When strategically placed, these display ads can deliver impactful messages.
2. Banner Ads
Banner ads appear in designated sections of a website, usually as rectangular or square images or animations that link to the advertiser’s landing page website. These display ads are designed to attract attention through visuals, concise messaging, and calls to action (CTAs).
Banner ads can be targeted based on demographics, interests, or contextual relevance to optimize reach. Users clicking on these ads should ideally lead to further engagement or conversion.
3. Video Ads
Video ads are dynamic display ad formats that use engaging visuals and sound to capture user attention. They can appear standalone across websites and social media or pre-roll, mid-roll, and post-roll ads on streaming platforms.
Concise, compelling videos are ideal for grabbing viewers’ interest. While they can be highly effective, they require thoughtful placement to avoid disrupting user experience. Browse our list of top video ads for inspiration.
4. Interactive Campaigns
Interactive campaigns are a combination of text and images that can be displayed in multiple ways, such as 3D animation, video, or interactive elements such as games or quizzes. This type of display ad allows you to engage with potential customers and assess how interested they are in learning about your brand.
It can also be done by offering discounts or incentives based on their answers to questions about what products or services they are interested in. These drive higher engagement and increase time spent with your brand.
5. Personalized Ads
Research shows that a vast majority of consumers prefer to purchase from brands that provide personalized offers based on previous purchases, known interests, browsing behavior, and other preferences. By leveraging data insights, personalized display ads present products, services, or messages highly relevant to each viewer, making them more engaging and effective than generic ads.
For personalization to succeed, you must balance customization with respect for user privacy and transparency around data usage. With this, you can increase conversion rates and build stronger connections with your audience.
6. Custom Intent Ads
Using data from search queries, visited websites, or engaged content, custom intent ads are strategically placed to capture high-intent users at critical decision points. This type of display ad allows you to refine your targeting beyond generic interests, focusing on users who demonstrate a clear, immediate interest to convert. This precise targeting reduces money waste and fosters high conversion rates.
7. Lookalike Ads
Lookalike ads on Meta (also known as Similar Audience on Google Ads before it was removed in 2023) target users who share traits with existing followers or customers. Meta analyzes data from the initial audience segment provided to identify other users with comparable interests, behaviors, or demographics.
With these display ads, you can reach people who are likely to engage or convert based on similarities with the original audience. By focusing on similar audiences, you can increase conversions and drive growth.
8. Contextual Advertising
Instead of showing your ads to people based on their demographics or past behavior, contextual ads are placed based on the relevance of the website’s content. For example, a travel ad for another company might appear in a news article about popular winter destinations. This type of native ad blends in seamlessly with the content around it.
Ad platforms analyze web page keywords, topics, and themes to match ads that fit naturally within the content, ensuring a relevant and non-intrusive experience for viewers.
9. Dynamic Ads
Dynamic ads on Meta automatically customize their content in real-time based on product availability, user behavior, location, and browsing history. You can create a single display ad template that can adapt to show specific products, prices, promotions, or messages tailored to individual users.
These are often employed by eCommerce brands so they can showcase multiple product options in one ad. One adaptable ad format can replace multiple static ones, reducing costs and time spent on ad creation while increasing conversions.
10. Retargeting Ads
Retargeting ads exemplify the power of personalized marketing by tailoring content to specific users. Here's how they work:
- Brands gather data about site visitors' navigating and browsing behavior.
- Marketers create different advertising messages that would appeal to different types of audience behavior and preferences.
- Display ads appear based on the categories of interest observed.
Display Advertising Ad Types Compared
| Ad Type | Pros | Cons | Best For |
| Interstitial ads | High visibility, captures full attention | Intrusive, may frustrate users | Short promotions, app advertising |
| Banner ads | Widespread use, low cost | Limited engagement, often ignored by users | Brand awareness, basic promotions |
| Video ads | Engaging, conveys brand story effectively | Higher cost, requires more bandwidth to view | Brand storytelling, high-impact campaigns |
| Interactive campaigns | Increased engagement, very memorable | Difficult to create, may not appear the same on different devices | Higher user engagement |
| Personalized ads | Highly relevant, high conversion rates | Requires user data | Personalized recommendations, eCommerce |
| Custom intent ads | Reaches high intent audiences, increased conversions | Limited reach, requires detailed tracking | Users are actively interested in products |
| Lookalike ads | Increased reach for new users | Requires original audience data | Audience growth, new prospects |
| Contextual advertising | Aligned with current user interest | Limited personalization | Interest-based users |
| Dynamic ads | Highly tailored and relevant content | Complex to set up | Real-time product promotions, retargeting |
| Retargeting ads | Re-engages past visitors, high conversion rate | Can be repetitive and intrusive | Recovering lost conversions |
Display Ad Targeting Process
With vast digital ad space and various ad types available, effective targeting will narrow your focus and maximize engagement. Simply follow these steps to ensure your ads reach potential customers who are likely to convert:
- Identify your target audience: Determine the demographic characteristics of your desired audience, such as age range, gender, and location. Tailor your messaging to their preferences, needs, and behavior.
- Match keywords with content: Ad networks use specific keywords or phrases and match them with relevant content on websites where your ads will be displayed. For example, if your key phrase is "tacos," the ad network will match it with other websites’ articles or blog posts about tacos.
- Focus on a specific niche: Target a particular niche and ensure that all your published posts offer valuable and relevant content that aligns with your promotion. This ensures you deliver consistent and cohesive messaging for your target audience.
- Use browsing history: Take advantage of audience targeting based on users' past browsing history. If someone has shown prolonged interest in salsa recipes, you will engage them with ads about salsa cooking methods, not seafood or beef stir-fry recipes.
Pros and Cons of Display Advertising
When appropriately implemented, digital advertising can bring many benefits, but it also has a few disadvantages you should be aware of.
Pros of Display Ads
Display advertising advantages include:
- Improved branding: Display ads visually showcase your product or service, creating strong brand awareness and recognition among potential customers.
- Efficient communication: Display ads, especially those with videos and attention-grabbing imagery, can quickly convey your message, capture the audience's attention, and effectively deliver your key selling points.
- Precise targeting: You can use ad platforms to target desired audiences based on demographics, interests, and behaviors. Advanced targeting options help reach the people interested in your offerings, increasing the chances of conversions.
- Wide audience reach: Display ads can reach a large audience across websites, social media platforms, and mobile apps, increasing brand exposure and awareness.
- Retargeting: You can reconnect with leads who have previously visited your website or interacted with your ads, reminding and persuading them to convert.
- Easy implementation: Display ads are relatively easy to implement, requiring little or no complex integration with publisher sites. They do not demand extensive technical expertise (unlike content direct response marketing, which requires much more consideration to be implemented correctly), making them accessible to advertisers without specialized knowledge.
Cons of Display Ads
Display ads also have some drawbacks:
- Potential disregard: The visual nature of display ads may lead some audiences to disregard them automatically, especially if they tend to ignore ads in general.
- Scroll-past behavior: Some users may quickly scroll past display ads without reading or engaging with the content. This behavior means you cannot capture attention or generate desired actions.
- Ad blockers: Many internet users use ad-blocking software to avoid intrusive or irrelevant ads.
How To Measure Display Advertising Performance
To understand how well your ads resonate with audiences, it’s important to measure and manage their performance. The following key performance indicators (KPIs) provide insights into the effectiveness and impact of your campaigns:
- Impressions: The number of times your ads are displayed to users, which indicates the overall visibility of your ads.
- Reach: The number of users who saw your ad. This metric is often confused with impressions.
- Click-through Rate (CTR): The percentage of users who click on your display ads after viewing them. CTR measures ad engagement and can indicate the effectiveness of your ad copy, visuals, and CTA in enticing users to click.
- Conversion Rate: The percentage of users who complete an action after clicking on your display ads. This measures the effectiveness of your ads in driving actual conversions or desired outcomes.
- Cost: You can use cost-per-click (CPC) or the average cost incurred for each click on your display ads. Another option is cost-per-mile (CPM) or cost per thousand impressions.
- Return on Investment (ROI): The overall profitability and return on your display ad investment.
- Return on Ad Spend (ROAS): The revenue generated from the amount spent on display ads. ROAS helps measure the profitability and effectiveness of your ad campaigns, providing insights into the return on your advertising investment.
- Engagement Metrics: Metrics like time spent on the site, page views, and bounce rate provide insights into the engagement and interest generated by your display ads. These metrics help assess the impact of your ads on user behavior and website interaction.
By monitoring and analyzing these key KPIs, you can gain valuable insights into your display ads' performance, identify improvement areas, and make data-driven decisions to optimize your display advertising strategies.
Display Ads Best Practices
To improve your display advertising campaigns, follow these tips:
- Prioritize user experience: Avoid intrusive ads like pop-up auto-play videos that cannot be easily dismissed. Such tactics can frustrate and discourage your audience.
- Use static ads: Consider placing static native ads within relevant content instead of disruptive ads. This integration makes them feel natural, increasing the likelihood of user engagement.
- Keep to the point: Be concise and focus on essential information to ensure your message is easily understood.
- Don’t skimp on quality: Ensure your ads look visually appealing. Use high-resolution images, choose a clear and readable typeface, and lay out all the ad elements in an aesthetically pleasing manner.
- Ensure quality control: Before launching your ad, review every detail to ensure it appears as intended. The landing page should also match the offer indicated in your ad.
- Create compelling CTAs: Encourage user engagement by incorporating a strong and persuasive CTA in your ads. This will motivate users to take the desired action.
Display Advertising Takeaways
Display ads offer flexibility and reach, making them integral to a successful digital marketing strategy. By leveraging different ad formats and targeting techniques, you can create tailored display ad campaigns that resonate with specific user segments and meet diverse marketing goals.
If you need help crafting, launching, and optimizing your display ads, we have a long list of top advertising agency websites to choose from. You can also browse our directory of best ad agencies and top B2B advertising agencies to connect with top professionals.
Display Advertising FAQs
1. What's the difference between native ads vs. display ads?
Display ads are designed to stand out and attract user attention with their format and colors. On the other hand, native ads seamlessly blend within website content without intruding on user experience.
2. What are display ads best for?
Display ads are best for:
- Boosting brand awareness
- Promoting products, services, and events
- Visual storytelling
- Retargeting users who previously visited your website or interacted with your ads
Display ads can reach large audiences and target specific demographics, which makes them suitable for all businesses that aim to expand their customer base.
3. What are some ways to make display ads more engaging?
To increase engagement, use high-quality visuals, clear messaging, and strong calls to action. You can include interactive elements to entice users to click or engage with your ads. Personalization and retargeting can also make ads more relevant to users, which improves engagement and increases conversions.
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