A milestone in history. The birth of digital advertising in 1994 started with an AT&T banner ad on a website called HotWired — which is now known as wired.com. This was the moment that led to what is now an industry forecasted to reach $425.90 billion in 2024.
Display banners were the first ad format ever used in digital advertising, long before search, mobile, video, native, audio, or social ads. The industry has evolved quite a bit, especially in the last 20 years, thanks to technological advances making more forms of digital advertising available.
Some websites have huge audiences who consume their content. To monetize this content, website owners often sell ad space (i.e. banner slots) to advertisers, which use the space to display their ads.
The display ad ecosystem, in 2024, has thousands of companies (publishers, agencies, tech providers) involved. It has become hard to navigate this landscape due to the number of tech offers that deliver your ads in the best and efficient way possible. Programmatic advertising (our specialty at Grapeseed Media!) is a streamlined way of buying and selling display ads.
In this guide, we’ll walk through the different types of display advertising, how to best use them, and what the benefits are.
Types of display ads
Let’s take some examples first. It’s best to take a look at the IAB (Internet Advertising Bureau) for specifications on standard display banner ads. The most common sizes are 728×90, 300×250 and 160×600 (or sometimes the 300×600) for desktop. The dimensions are in px (pixels) so relative to the resolutions of your screen.
Nowadays, display ads can be found in different channels, on desktop, mobile and as rich media or native ad formats. The predominant sizes on mobile are 300×250 and 300×50 (320×50).
Rich media ads are mostly high-impact formats like billboards (970×250), but they differ not only by size but also by their interactive elements that are more advanced than normal standard display ads.
Native ads are distinctive because of their ability to seamlessly integrate into the content of the website. They match the look and feel of a website. They are harder to differentiate from the content so they must be explicitly identified as paid ads with terms like “sponsored by” or “powered by”
How Do Display Ads Work?
Ad servers are used to deliver ads. There are ad servers for publishers (i.e. websites) and there are ad servers for advertisers.
Publisher ad servers focus on the ad inventory management and inventory distribution as well as ad monetisation of the publisher’s ad inventory.
Advertiser ad servers focus on creative management and ad delivery reporting.
Ad tags deliver the ad itself. This tag is just a snippet of html5 code which serves as a placeholder for actual ads.
The mechanics of an ad server
How are display ads purchased?
Ads are mostly bought on cost-per-mille (CPM) which means the cost-per-thousand impressions. When an ad is displayed on a website, it counts as an impression.
Other buying models are cost-per-click (CPC) which is predominantly used in search or in display networks.
Programmatic advertising — a modern and efficient way of delivering display ads — has been gaining huge popularity in the last couple of years.
In 2023, programmatically sold advertising was worth $546 billion, according to Statista. This figure is expected to reach $779 billion by 2028. Programmatic advertising uses a real-time bidding model, matching up buyers and sellers in a fraction of a second, as the website loads.
RTB mechanics
Advantages of Display Ads
Variability
Display ads come in multiple sizes, from large billboard formats (970×250), placed above the fold, to smaller MPUs (300×250) placed at the end of an article or a skyscraper (160×600) at the side of the content. For every campaign objective you will find a format that suits your needs for the design of your creatives. You can also use dynamic creative optimization (DCO) to serve customized ads (i.e., different pictures or motifs, different copy text) based on their personal preferences.
Scale
The reach of display ads is astronomical. So far in 2024, 91.3% of all US digital display ad spending was programmatic, and display ads currently account for 49.9% of total digital ad spending.
Cost-effectiveness
Because of its tremendous scale, display ads tend to clear at lower CPMs than formats in other digital channels.
Measurability
Display ads allow you to easily measure success to corresponding business outcomes (i.e. conversions). You can collect data around whether someone clicked your ad and how long they interacted with it, meaning you can adjust your display ad strategy easily.
Supports other strategies
Display ads partner particularly well with other, more specialized digital channels, like search, social, video or content marketing activities. You can use display advertising as a brand-building tool or as a traffic driver in conjunction with other measures. You can retarget people who have watched your online video ads with banners or retarget people who have been reading your blog with banners to offer them a discount on your products as an example.
Versatility
Display ads offer plenty of powerful targeting options: keywords, demographic, URL-based, IAB Categories, third party data (behavioral, interest or in-market data), mobile location data (like visiting certain stores) or first-party data (data from your own digital properties). This means your ads can be personalized to different audiences.
How Display Ads Support The Consumer Journey
When making display ads, consider the consumer journey. Consumer journey frameworks usually consist of roughly three to five phases and demonstrate how consumers are going through their decision-making journey in a buying process. Let us focus on three phases in the journey in this article.
- Awareness: The top of the funnel. Marketing activities in this phase are all about brand awareness and brand building. For example, reaching new customers that are not yet aware of the brand or product. An ad with a ‘learn more’ call to action (CTA) to a whitepaper on a topic is an example of an awareness ad.
- Consideration: The mid funnel. People are in-market for your product or familiar with your brand but have not yet made up their mind which brand or product to go for. They are still considering their options.
Conversion: The bottom of the funnel. These are repeated customers, or customers that are very close to buying your product, because they have been on your website, searched for your business or enquired about you in some way. These users just need a reminder or a little nudge to get them to convert. An ad with a ‘Buy now’ call to action would be an example of a conversion display ad.
Effective Display Ads Tips
The most important thing when it comes to display advertising is having a strategy. A campaign strategy includes deciding on a campaign objective, conversion goals, and a clear vision on how to achieve the campaign goals in each step of the funnel. If this strategy is set, you can optimize towards your goal consistently and methodically.
Set clear campaign goals
The first tip for a successful display advertising campaign would be to set clear campaign goals and KPIs for different phases in the funnel. KPI’s for awareness could be unique reach or video completion rate. You could also track landing page visitors, brochure downloads, store locator visits or time spent on site.
For the bottom of the funnel, think of all conversion related goals, purchase events, app downloads or lead form completions.
Segment your audience
Segmenting your audience into prospecting vs. retargeting allows you to better target your ads. Prospecting is a top and mid funnel activity, which means a focus on new customers rather than existing customers. In prospecting, you target people who most likely haven’t been to your website.
You can use data or contextual targeting to address these audiences that belong to your target audience, but have not yet heard of your business.
Retargeting relates to a mid or bottom funnel activity. Here you are aiming to re-engage with your existing website audience. People who have already visited your website are more likely to be in the consideration or conversion phase so you can serve them display ads that are further down the funnel.
Utilize variation
In order to maximize the full potential of the marketing platforms in display advertising, use all targeting options available. From affinity, to keyword, to first-party data, use different targeting methods and see what works best for you in your campaigns.
Switch creatives up
Experiment with various display formats and see which creatives work best for your campaigns. To maintain audience engagement and optimize performance, it’s essential to refresh display ad creatives every six to eight weeks.
Regular creative rotations not only keep content fresh, but also contribute to a noticeable improvement in click-through rates, enhancing overall campaign effectiveness.
DCO (Dynamic Creative Optimization)
You can use your first party data to customize the creative messaging and enrich the creative with relevant information for the consumer.
Be patient
Finally, you need to be patient and give your campaigns some time to start generating results. The systems need to test and learn so, especially in the beginning, results may have a lot of room for improvement. But the system gradually learns and adjusts.
This patience will pay out later on, when the return on your ad spend is growing exponentially.
Get Started With Display Ads
It is a lot to digest when you are at the beginning of your digital marketing journey. Display advertising is particularly crucial due to its many advantages like the extraordinary scale, the cost effectiveness, and the variability, which makes display advertising an essential tactic throughout each phase of the consumer journey.
Therefore, it is a good idea to engage a display ad partner to jumpstart your marketing activities, which is where we can help.
Learn more about how Grapeseed Media can help you get started with display advertising. Get in touch with our team to discuss your specific needs.