What is Display Advertising – A Definitive Guide

What is Display Advertising – A Definitive Guide 

Display advertising made its first buzz more than 20 years ago, taking digital marketing to a new level, yet many advertisers ask themselves if it’s still worth investing in.    

Despite its negative reputation, the digital display advertising market has slowly risen. The estimated display ad spend is expected to reach $141.96 billion by 2023. And that’s only in the US.   

Worldwide speaking, last year’s spending on display advertising summed at no less than $238.42 billion, and people are waiting for it to reach the tremendous amount of $335.39 billion by 2024.    

You may be wondering why advertisers are investing such massive amounts of money in display ads, especially with problems such as ad blockers and banner blindness. Before getting into that, it feels just right to define what display advertising is.   

What is Display Advertising?    

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Display advertising is a form of online advertising that relies on banners, text, images, or video to deliver ads to users. It is meant to attract attention and raise a brand’s awareness across the internet. This way, marketers find the best option to reach and acquire short- and long-term customers. 

Since their appearance, display ad campaigns have come a long way. They exist in a variety of shapes and forms but are mainly grouped into two categories: 

  • Static – text or images (png or jpeg);    
  • Dynamic – HTML5, video, gif, or other rich media elements.    

Let’s look at some examples of banner ads to see how they are different.    

In display advertising, the only limitations are those imposed by the advertising network. For example, on some networks, you may be allowed to work with static ads, while others may accept only dynamic ones. When trying to find the best way of advertising your business, testing is the answer. For example, Coinzilla found that the most effective banner types are:    

  • Leaderboard – 728×90;    
  • Medium Rectangle – 300×250;    
  • Wide Skyscraper – 160×600;    
  • Half Page – 300×600;    
  • Large Mobile Banner – 320×100;    
  • Mobile Leaderboard – 320×50.    

Types of Display Advertising 

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The type of display advertising campaign you should run depends on the goals you want to achieve. Primarily, there are three types of campaigns you can run: Brand Awareness, User Acquisition, and Retargeting.   

And while all of them are vital for bringing new customers, there are some essential questions to ask yourself:    

  • Where is your business now?   
  • What do you need the most at this very moment: awareness, engagement, or conversions?    

To answer these questions, you can think of the steps somebody takes when getting to know your brand; this is what we call the Customer Journey.   

The Customer Journey consists of 5 goals you must think about when trying to turn users into customers:   

  • Awareness – meeting the brand;   
  • Consideration – interacting with the website/product; 
  • Conversion – purchasing the service/product; 
  • Loyalty – becoming a long-term customer; 
  • Advocacy – recommending the service/product to others. 

Display Advertising for Brand Awareness    

The first goal you need to achieve is to make people aware of your business. To do so, you can start a brand awareness campaign, which can create a “buzz” around your project. To make the best out of your budget, you will broadly target your audience, not focusing only on users you think are more likely to become customers.    

But that doesn’t mean you should pump money into your campaign to reach as many people as possible.    

A poorly targeted brand awareness campaign will not only come with tremendous costs, but it will also reach people who have a low to 0 chance of becoming future customers, and your money will go to waste. Thus, pay attention when creating your audience so that your website will have as many visitors as possible.   

Don’t get scared if your ad will not deliver immediate results, especially if you are a small or new business.    

Just think about it.    

How likely are you to make an online purchase from a brand you have never heard of?    

For me, the odds are pretty slim. We usually go back to the same brands because we trust them. And unless they let us down, it’s very unlikely that we’ll switch to another brand.    

When you’re a business that’s just appearing on the market, you need awareness more than anything. 

You need people to find out who you are and what you can do for them. Here are some questions your ads should answer:    

  • What does your business do?   
  • How can you help your customers?   
  • How experienced are you in the market?    
  • Why should a customer ditch your competition and choose you instead?    

How to measure a brand awareness campaign    

Since you’re running a brand awareness campaign, you should track your impressions, brand mentions, organic searches, and organic traffic. All of these are crucial when trying to determine the success of your ad.    

When it comes to tracking organic performance, there are many tools available. You can use Google Search Console or Google Analytics, but if you want to know more insights about your campaign’s impact, you may want to check out paid tools, such as Ahrefs or Moz. 

You can use these to monitor the search volume increase in branded keywords or to identify how people are searching for your product. 

Display Advertising for User Acquisition    

Acquiring new customers is tough. Acquiring new customers through display advertising is even tougher, but it’s not impossible. Setting up an acquisition campaign gets you to the next destination of the Customer Journey: consideration. You have to make potential customers consider your brand and engage with your products/services.  

The essential thing you need for setting up an acquisition campaign is a larger budget. Besides that, you have to make sure that you are delivering a well-designed landing page and that you are selling a finished product (if not, the odds are that your potential customers will feel insecure about what you are selling, and their interest in your business will drop). 

Thinking of the budget you need for a good display ad, you may wonder: are display ads worth it?    

Of course they are! Otherwise, it wouldn’t be a market worth billions of dollars.   

But there are some questions you should ask yourself before creating a display campaign:    

  • How can I make people consider my business besides the competition? 
  • Can I afford to invest time and money in display advertising? 
  • Is my team experienced enough to create and manage display campaigns? 

Let’s break it all down. 

Setting up a campaign    

Setting up an acquisition display campaign is a process that differs depending on the platform you use. But some elements are general throughout all ad networks.    

Probably the most important aspect you must consider for user acquisition through display advertising is the context. 

Let’s do a thought experiment. Imagine you’re reading a post about “Mining Crypto on Your Mobile Device”. On that page, you see two banners: 

  1. One promoting a crypto exchange. 
  2. One promoting a crypto mining app. 

Which of the two would you say is more relevant?    

By paying attention to the context, your ads will enhance a user’s experience instead of just driving them away from the website. Thus, the question your display ad should answer is: “Why would I, as a user, want to click on this?”.    

Measuring the performance of a display acquisition campaign    

When it comes to measuring the performance of an acquisition campaign, there’s a simple way of looking at it. How much money did you invest, and how much of it returned?    

You may feel like you’ve spent more money than you got back, but don’t jump too quickly to conclusions. There’s one more factor left to consider – Customer Lifetime Value (CLV).    

Let’s say you own an online shop. 

Some users may spend $200 and never get back on your website, while others may purchase your products constantly, so they would spend 50$/week. 

CLV Explained

To calculate CLV, you just need to find some average values:

1. The Average Purchase Value – divide your Total Revenue by the Number of Purchases over a set time. Let’s say our business had a $200,000 revenue from 10,000 purchases over a 1-month period.    

2. The Average Purchase Frequency Rate – divide the NP by the Number of Unique Customers. Of those 10,000 purchases, 1,200 were unique users.   

3. The Average Customer Value – multiply the APV by the APFR.   

4. The Customer Lifetime Value – multiply the ACV by the Average Customer Lifespan.

CLV Formula

SIDENOTE. To determine your ACL, you need to know for how long you have been working with all your clients and average that duration. This is a little tricky, but you can use this formula to get a rough estimation.    

It may seem daunting at first, but calculating your CLV isn’t that difficult if you have access to all the data you need.    

Once you know your CLV, you can compare it to your CPA (Cost per Acquisition/Action). And as long as your CPA < CLV, you’re in the safe zone.    

Even if you are confident with your ad, you still can’t know for sure if you’re doing a good job. To check your ad’s performance, keep an eye on CTR (Click Through Rate), CPC (Cost per Click), CPA (Cost per Action), or CVR (Conversion Rate). 

What Are Retargeting Campaigns?   

Also known as remarketing, a retargeting campaign helps re-engage users who previously interacted with your website. By creating a remarketing ad, you get to the next point of the Customer Journey: conversion optimization.    

Retargeting also solves one of the major problems of online advertising – context.    

Whenever a user sees an ad for a business he never interacted with, the chances of him ignoring it are pretty high. But remarketing campaigns rely on customer segmentation, thus delivering relevant ads to your audience.    

How does remarketing work? 

Generally, retargeting lists are built from your website’s current user base. The technology uses a JavaScript code known as a pixel to track your audience anonymously.    

The pixel is installed on your website. When a user lands on one of your pages, the pixel drops a cookie in the user’s browser. Later, while he browses other websites, the cookie will let the ad provider know which ads to serve, helping you re-engage with the user. 

SIDENOTE. The code does not affect the performance of your website, nor is it noticeable to the user. However, if a user clears their cookies, a remarketing campaign will no longer be able to target that user. 

Keep in mind that there are many more important steps you need to follow for your remarketing campaign to work the best way for your business. Moreover, improving your display ads will get you more potential customers, and think about it; who wouldn’t love it, right?   

Final Thoughts

When it comes to display advertising, many people don’t even know where to start.    

While having a clear goal in mind is essential, you must invest time and money in both your product and your overall strategy. Otherwise, your project might be doomed from the start.    

Try to always stay up to date with the latest requirements and regulations for your campaigns to have a smooth way to go and use as many tips as possible; you don’t know when you meet the “magic formula” for your brand.