Perhaps, less than 20% of internet users can answer the question what is display advertising?. Even if you define digital display advertising right, it doesn’t guarantee your display advertising campaigns will run smoothly. Your marketing strategy may consist of a varied set of formats but it is also important to learn how to turn them into relevant ads that don’t irritate your users, engage and encourage them to take the right action asap.

Let’s find out how exactly display ads work and discover how to amplify their strengths to reach maximum profitability.

What Is Display Advertising?

A display ad is a form of paid advertising that usually features a clickable image and a compelling copy written over it.

It is called “display” because the ad unit is “displayed” as sponsored content on a landing page when a target user visits it.

If we categorize display ads from broader meaning to narrow, here’s what we have as a result.

Modern display advertising can be distributed via lots of channels, including television and radio. However, the most popular way to distribute ads is via digital interactive channels - mobile, desktop, in-app ecosystems, and connected TV advertising.

display ad types

At the same time, the Google display network also enables advertisers to launch those Google ads that utilize different targeting criteria, like cookies.

Such Google ads are placed on websites automatically and in real-time, they utilize programmatic advertising algorithms to determine which user should be the ad and whether this or that impression could be relevant.

Determining the value of each particular impression for the end-user (based on search history, browsed sites, interests, etc.) Google ads get individualized for each user, no matter what kind of sites they are browsing at the moment. Each time the landing page is browsed, the new user sees the ad that is specifically suited for them based on those targeting criteria. See the example below.

search display ad

On these channels display ads can be placed contextually which means that the thematics of advertised products or services will match the thematics of the site or app they are placed on. How is it possible? There are various advertising mechanisms that enable advertisers to target the right audiences online and the most popular of them are search keywords, the information contained in cookies, site browsing behavior tracking, etc.

For instance, with the Google display network, advertisers can launch search ads that will appear in the search engine (at the top of the landing page) when the user searches for something.

display ad google

What are the distinctive features of display advertising?

Such advertising is typically focused on the target audience, the ad serving can be adjusted according to the theme of the sites, regions, time and other parameters.

The ad unit is shown only to interested users, based on their data characteristics.

Display ads are typically used for branding campaigns but they can also accomplish a lot of other tasks aside from raising brand awareness - increasing brand recall, generating sales, etc.

What is the purpose of display advertising?

The micro goal is to draw the attention of the target audience and encourage them to click on the ad. The macro goal is to raise brand awareness and boost sales in the long term. There are many types of display ads each of which can be good for a particular purpose. But how do they look?

In fact, almost every internet user knows what a regular display ad looks like. Here are some of the best display advertising examples:


The images above belong to display banner ads launched on a typical display network. Ad #1 is a skyscraper banner ad, ads #2 and #6 are large rectangle banners, #4 is a medium rectangle, #3 is a vertical rectangle, and the display advertisement unit #5 belongs to the class of leaderboard banners.

All those formats account for 77% of all impressions and are the most widespread display banner ads across the web.

Learn more about the most popular display formats and sizes in this article.

Display advertising is not limited to banners. It also includes the following:

Types of display ads:

In-banner video and animation display ads appear on the web page the same way as banners do;

true view discovery ads

Rich media ads that expand twice in size being triggered by the user. According to our research, rich media are 25% more memorable than regular banners;

rich media ad examples

Video ads. Interstitial ads represent a full-screen form of advertising with ad units that are shown atop the web content of landing pages.

video ad formats

Native ads. Those ad units adjust to the website’s content by mimicking the design and functions of website elements. Plus, native ads take the form of useful articles which also promote service or product in a more subtle way.

popular native ads

Yes, native advertising is also considered a part of display advertising. For example, eMarketer reported that native ads make up 58.3% of display ad spending. In most cases, native ads also manage to bypass ad blockers. Still, native ads are quite different from traditional banners, as they are organically integrated into the publisher’s website or in social media feeds. They usually don’t appear as banners, but rather as suggested posts or recommended content.

What display ad campaigns are good for?

Even though it could be safe to say that display campaigns are universal, normally they are used for branding campaigns rather than performance advertising. The thing is, the main purpose of display ads is to capture attention and cause a brand recall while forming a strong brand image in the customer’s mind. Performance campaigns, meanwhile, don’t have to familiarize the customer with a brand or product for the first time, their purpose is to drive conversions when the customers are near the bottom of the funnel (close to the conversion stage). So, what display campaigns are good for:

  • Driving better recognition and brand awareness, however, is not a single superpower that display ad campaigns can give to advertisers or marketers.
  • You can engage the customers to check what’s new in stock or promote a new product.
  • You can increase the traffic to the particular landing page
  • You can deliver important news/updates about your shop
  • You can address and find new audiences addressing customers via different channels (let’s say CTV).
  • You can encourage customers to make more purchases.
  • You can create a demand for the brand-new product.

How Do Display Ads Work?

We’ve just learned that a display ad is a clickable image with a copy on it. To make it clickable, banner creators include a small HTML code and incorporate a link leading to the target website into it.

When the ad is ready, an advertiser approaches the right publisher in order to buy ad inventory of a suitable ad format. There are 3 major ways of how they can do it: contact publishers directly, join an ad network/ad exchange, or buy inventory programmatically.

To make sure the ad will be shown to the right audience, an advertiser specifies targeting options and filters the potential site visitors by demographic, behavioral, geographical, and other parameters.

Example. Let’s take a Swedish brand specializing in basic male clothing manufacturing.

According to their product specifics, it might be effective to target Europe-based males aged 25-45, who are not necessarily interested in fashion (as the brand focuses on basic clothing). Instead, more significance for targeting may bear the level of income and lifestyle habits, preferences, etc.

After the ad is served to the target audience, an advertiser analyzes results to determine whether this display advertising campaign performs well. Key metrics to consider are:

Page Views or Impressions — the number of times the ad was shown to its target audience. Primarily depends on the publisher’s website authority.

Click-through Rate (CTR) — the ratio of page views to clicks. This metric depends more on ad quality and inventory format.

Cost per Mille/Thousand (CPM) — the price advertisers pay for every thousand of impressions. The lower is CPM, the better for advertisers. The higher is CPM, the better for publishers.

Using these indicators, an advertiser calculates the effectiveness of the ad campaign and makes changes to the ad unit or its targeting options, if necessary.

Benefits of Display Advertising for Scaling Your Business

Display advertising has 3 strong features that help your business grow in a competitive environment:

Well-made display ads are visually attractive, especially when it comes to in-banner videos. Images speak louder than text ads, while videos increase the likelihood of purchasing by 64%.

Display ads raise brand awareness, as brand imagery sneaks into the user’s subconsciousness and produces a recognition effect when they see a brand logo again. 71% of consumers will more likely buy a product from a company if they recognize their name.

They deliver targeted experiences. You can personalize display ads for the end-users just the same way as advertising banner ads. Choose parameters of your audience in the DSP dashboard and the ads will appear in front of the right people.

You can count on great reach. With the help of ad tech software and display banners, you can get your message across numerous websites and reach users on all devices in all geos. Plus, those online display ads will be shown to the right users at the right time. Demand-side platforms gather customer data in a matter of milliseconds and match the display ads with the right inventory. This way, you can make sure that each ad is served to potential customers who are most likely to convert.

On average, display ads reach only 0.35% CTR, but some units perform better than others and generate more impressions.

Best ad formats for advertising (CTR)   

Best display ad sizes for monetization (% of Impressions)

12.9% — 1024*768 Mobile Ads

33% — Medium Rectangle Banners

10.4% — Native Ads

32% — LeaderBoard Ads

5-7% — Full-Screen Interstitial Ads

13% — Skyscraper Ads

1.7% — Video Ads

10% — Large Mobile Banners

1.2% — Rich Media Expandable Ads


IAB Rising Stars

International Advertising Bureau presented 6 new types of interactive display advertising formats called Rising Stars:

Billboard. This one is somehow similar to the leaderboard format but is much larger and suitable only for a premium inventory slot at the top of the landing page.

billboard ads

Filmstrip. A half-page ad format that occupies the whole left or right side of the page.

filmstrip ads

Portrait. Similar to filmstrip, but not so long and often contains plug & play content.

portrait ads

Pushdown. A large leaderboard that “pushes” the rest of the page’s content down while being triggered.

pushdown ads

Sidekick. An interactive right-side banner that pushes on-page content on the left.

sidekick ad

Slider. An overlay unit located at the bottom of the page. It fills the page with sponsored content 100% if the user interacts with a banner.

slider ads.png

According to IAB, Rising Stars produce 63% better engagement and 5x longer gaze duration when compared to other display formats.

4 golden rules for preparing your display creative

One thing is designing your ad message so that it instantly attracts the attention of the viewers but the other, no less important task is to think through the structure of the offer beforehand. We suggest you look at the following display campaign tips and apply them to make your creatives more meaningful and close to your audience.

Watch the language

Sure, the language of your display creative should match the language of the geos where you advertise, it goes without saying. Plus, you need to make sure it aligns with a landing page where the ad leads to.

On top of that, the messaging in the creative itself should speak directly to the viewers and their needs. For instance, you are positioned as a luxury tourism provider but you want to run a campaign to attract a middle-income segment of customers. In this case, the best scenario will be to display an affordable price right away on the ad. The company may also determine if tourists flock to certain destinations just for the weekend (holiday) and develop a super low-priced and attractive offer pricing to put on the ad. It will work instantly as an attention-grabber.

display ad message

Make it catchy

Despite the fact that display campaigns heavily rely on visuals the users are already used to flashy and attractive creatives. The beautiful picture and media in it will certainly attract more attention to your ad but the structure is what will interest them to actually click on it.

Time-sensitive offers convert much better because users are afraid to miss the chance to buy something discounted or something that is still in stock but limited. Thus, you can put the final date when your sale ends in the ad to underline the urgency. Actively use numbers and stats in the ads to persuade your audience and provide social proof that your service is popular. Plus don’t forget to highlight the main offer in bold letters that stand out from the rest of the writing.

display ad discount example

Don’t overload it with text

While it seems like the basic principle of designing ad units, many get lost in the process and end up clattering the banner with excessive details. Sure, details are very important but the goal of the banner ad is to spark interest and make the users click on it. Then they will be redirected to the page where they can make a purchase.

Make a draft of the text on your ad and make sure you leave only the most important words. The best practice will be shortening the message to 10-20 words. For complex services and products, it is better to opt for videos and native formats, however, even those still need to be short as ad messages. Use ads as an attention hooker but in order to uncover all properties and benefits of your offer apply landing pages.

amazon display ad example

Use one call to action

It is very confusing when you see a compelling offer and the ad doesn’t tell you what to do next. Or, it can be even more confusing if the display unit says to visit the website, find the product, make the purchase, and subscribe to the news. One ad unit should include one call to action just like your landing does.

It should be clear for the users what action your offer asks them to perform. From the picture above you can see that the Amazon ad instructs the user: Check out what’s included in your membership and the “try prime” button alongside it, together it works as a CTA. In the same way, you can only button or another element of the ad as a call to action (see example below).

fitness display ad offer

Create a descriptive landing

A landing page is typically created for a specific goal: to sell a product or service, collect the leads or news subscribers, or just to analyze the real demand for a product. The landing web page that you create for the display campaign should reflect information strictly about your offer, no fluff with information about your company or other products that you have in stock (if your ad promotes only one), focus on what you promised in the ad unit.

Create the landing before you create your display unit as the URL of your landing page will be featured in the ad campaign settings. Then the ad unit will redirect a “warmed up” and interested audience to the landing and the task of the landing will be to convert those interested users into customers (subscribers, etc.)

The following 7 tips you should never forget when creating the landing for your display ad traffic:

  • Landing should have one CTA and should be focused only on one purpose (whether it is a purchase, subscription, collecting the customer data, or else).
  • If the product is complex, describe how it works and how it delivers benefits to the users.
  • Include testimonials, stats, and other elements that illustrate that your product is loved and actively used by customers.
  • Whenever possible keep the landing short but explanatory
  • Don’t use navigation bars that may distract the users and cause additional inconveniences.
  • Test several variants of pages to determine which works best.
  • Keep data input forms very short, don’t make the users sweat while filling them or hesitate if they expose too much personal information. Explain how this information will be used to clear the doubts.

display landing

Challenges of display advertising and how to handle them

Display creatives are considered to be the most affordable and universal ones, however, such phenomena as banner blindness may prevent them from reaching their peak effectiveness. Banner blindness is the ability of the human eye to avoid ads during site browsing, it happens both consciously or subconsciously. The concept of banner blindness was first used in 1998 but now, when the websites are packed with ads the problem has turned almost catastrophic.

Experienced Internet users notice much fewer ads compared to inexperienced ones. Typically banner blindness develops gradually due to increased advertising pressure on users. Over time, the eye gets used to how ads look and where on the page they are located. Furthermore, users remember that clicks on some ads often lead to redirects and can even be potentially harmful for gadgets.

Take the F-pattern into account

Experts have found that typically after opening a web page, people skim over the top lines of the text, then go down and look at the text horizontally again. Then the user glances down. This content assessing pattern resembles the English letter F.

Some share (the majority) of the users carefully inspect the left side of the web page. A smaller share checks out the right one. Only one in five users proceed and go down below the scroll line of the page. This information you should take into account when planning display ad location.

How to serve a display advertising campaign?

Setting up a display advertising campaign might seem like an easy task since there are lots of platforms that offer advertisers 100% workflow automation and real-time optimization. Indeed, finding a suitable inventory for ad placement is way easier than it used to be just a decade ago. These platforms offer not only automation but also audience based highly-personalized ad delivery.

The algorithms match cookies with campaign criteria and place the ads themselves without human interaction. However, the competition for user attention is very tough and the creative itself, messaging and campaign controls should never be underestimated.

For display marketing campaigns based on CPM (cost per mile), advertisers pay for 1000 impressions served by publishers on websites/in apps. This model is more affordable than cost per click (since cost per impression is cheaper) but the ad campaign performance will depend on how engaging the representation of your product or service is to your audience. For the same amount of money you pay with CPC, you can generate significantly more clicks out of those 1000 impressions. Just see how to prepare the campaign.

Where to serve display creatives?

Display ad units are pretty universal and can be supported by a variety of channels like mobile web, in-app environment, desktop, and even CTV. Also, they come in a variety of sizes each of which can best suit a particular screen or environment.

There are also various ways you can use to organize ad serving:

Manually. For instance, the traditional placement implies that you need to find the publisher and negotiate the placement details manually, via e-mail. In this case, you will discuss the pricing, location of the ad, and time during which creative will be placed on a particular space directly. The bonus of this placement is that you know exactly where your ads will appear. The downside is, such an arrangement is time-consuming and the targeting options are limited (select the sources and site categories that match the thematics of your offer).

Programmatically via RTB. In this case, you register at DSP and fill in your ad budget - that is pay per 1000 impressions at once (for CPM campaigns). Each of these impressions will be served on different media because the essence of programmatic advertising is to find the most relevant audience for your ads (who can be scattered across different sites, apps, and channels). This way the system will sift through the vast amount of vacant ad placements to fill the impression for the user that best suits your selected targeting criteria (age, OS, device type, geo, etc.)

Private auctions PMP represent the other variation of auctioned deals. As a rule here publishers offer limited or exclusive inventory. Participating in PMP publishers can guarantee a more predictable environment as they set min. price. Plus, PMPs are invite-only auctions.

Programmatically via direct deals. Programmatic direct advertising offers the same perks of campaign automation and targeting just like programmatic RTB. Still, direct deals are made without participation in RTB auctions. This means that the advertiser directly purchases inventory from the publisher.

rtb vs direct deals

With this publisher may offer to the advertiser a guaranteed number of impressions. The main benefits of direct deals are that they make media trading more predictable for both advertisers and publishers. If, for instance, an advertiser has a well established relationship with a renowned publisher they can make a deal for serving a fixed number of impressions. Publishers, meanwhile, ensure that exclusive inventory is sold to the right partners.

So where’s programmatic used here then? Imagine the case when an advertiser sets the direct deal with a publisher for serving 10 000 impressions on the popular sports news channel. But here’s the trick - the channel is international and visitors come from all around the world while the advertiser is intended to offer sportswear only to the local customers. In this case, the advertiser goes to DSP and adjusts the right geo to show ads only to those visitors who are local.

Programmatic + Digital Display Advertising = Win-Win?

Programmatic is gradually taking over the display advertising market. The long-term process of negotiation and manual trading, aka direct media buying, requires maximum human effort without a guarantee of the highest cost-efficiency.

Programmatic advertising is just the opposite, as it is totally automated. When direct media buying may take days or weeks, programmatic real-time bidding solutions handle their tasks within milliseconds. The key players in programmatic that ensure effective media buying for all parties are DSPs and SSPs.

Programmatic spend will rise to $96.59 billion in the U.S

According to eMarketer, programmatic digital display ad spending will reach $96.59 billion by the end of 2022 (only in the US). Despite the COVID-19 implications advertisers didn’t stop investing in ads, they simply redistributed their budgets towards those channels where the traffic only grew. With empty streets, digital out-of-home billboards lost their relevance while online broadcasting and online gaming only boosted.

Because people started to stream the video on all available divides - mobile, connected TV, in particular, advertisers invest more budgets into display campaigns. According to Statista reports, in 2021 video ad spend is bound to rise above $22.18 billion. In general, by the end of 2022 around 82% of Internet traffic will come from video watching.

digital advertising spending by format

As seen from the picture, in 2020 digital ad spending was affected almost across every format but starting from 2021 this situation is supposed to even out.

Display ad serving in programmatic: DSP and SSP as key platforms

How is ad serving organized in programmatic? Programmatic advertising has a complex and multilayered ecosystem where each platform performs a certain function indispensable to the ad serving. DSP and SSP platforms are the most important elements for this process. Let’s briefly review what they are in charge of.

A Demand-Side Platform (DSP) is a programmatic tool for advertisers. It features the self-serve dashboard in which advertisers adjust display ad campaign settings. Then, a DSP checks inventory available at ad exchanges and matches suitable inventory slots to given advertising display ad units. The system places an optimal bid based on a budget specified by the advertiser. If the bid wins, the ad will be served to the target user.

how dsp works

Learn more about how a DSP works here.

A Supply-Side Platform (SSP) is a programmatic tool for publishers and app developers, in which they manage their available inventory and place it for sale. In this case, an SSP sends information about the available inventory and website audience data to DSPs and ad exchanges. When several DSPs mark the publisher’s inventory as a suitable one, an SSP evaluates the bids sent by those DSPs and chooses the highest one among them.

how ssp works

Learn more about how an SSP works here.

Either way, it’s a win-win for both supply and demand sides. Advertisers pay a fair price that never exceeds their budget, getting a precisely targeted ad serving in return. Publishers sell their inventory at the highest possible CPM without losing a penny, as SSPs receive all bids simultaneously during a real-time bidding auction.

Aside from display advertisements, full-stack programmatic services like SmartyAds work with the rest of digital ad formats including video, native, mobile, and connected TV online advertising.

How to retarget with display ads?

Another great way to launch display campaigns is by retargeting those users who didn’t convert in the first place. As you might already know, only a few of those who browse your website have the potential to become new customers, the majority of people don’t convert during the first visit.

For instance, if during the first ad campaign you addressed your audience on desktop, during the retargeting campaign you can reach them on the mobile or connected TV.

If you want to follow the best practices of retargeting here is a couple of advice:

  • Define your best products or services. Run the audit of your products and services to find the best-sellers that generate the greatest amount of revenues. As soon as you nail it, select them for your remarketing advertising campaigns.
  • Embrace new channels. Before you set up a retargeting campaign find out alternative channels that your audiences visit most often and launch a campaign on them.
  • Use remarketing lists. Apply remarketing lists from your previous ad campaigns
  • Offer a discount. Think through your offer to engage the audience better - choose engaging formats or offer a discount.
  • Experiment with formats. Test various ad formats to find those that will work optimally. Change the location of the CTA, the picture, or wording (only one element at a time) and then see which combination works best.
  • Adjust creatives to the channel. Launching a campaign across new channels, let’s say mobile, don’t forget to adapt the dimensions of your creatives accordingly.
  • Hit the right time. Determine the time of the day when your audience is most active and adjust the dayparting so that your ads are served only during those hours. See more in the article about dayparting.
  • Adjust the advertising frequency so that you serve the right amount of ads per user during a particular period. If you pinpoint the optimal amount you offer will be memorable enough, yet it won’t be annoying for viewers.

You can create a remarketing list for your campaigns in Google Analytics or using any other third-party tool designed for it. Likewise, you can just re-use the same segment of users you were targeting in your previous campaigns on DSP. Let’s review the process step by step.

retargeting how it works

When you create a retargeting campaign on DSP it means that an ad platform will allow you to deliver the ads to those audiences who previously been targeted by your campaign or visited your website. Setting up such a campaign won’t be much different from the average ad campaign setup. The only thing that will be different is that you will choose the existing audience segment in the settings.

In order to create a retargeting campaign on SmartyAds DSP you need to:

  • Select the campaign type in your DSP dashboard: banner, native, or video.
  • Fill in the basic campaign settings and proceed to the targeting section.

targeting options smartyads dsp

If you already have audiences from previous campaigns you should select the button the says “retargeting” and then select the audience from the list.

Now select the targeting options according to which you want your campaign to be served. As you can see in the picture, you can select from diverse targeting options starting from demographic ones (age range), and end with technical characteristics (browser, device type, connection, OS, etc). The IAB categories option helps you to define which IAB category your campaign falls within. It helps to better match with those publishers who specify particular IAB campaigns as desirable.

Later when you proceed to the filter lists you can also decide where you don’t want your ads to appear. There are whitelists that define desirable sites for ad placement (ads will be served only on those sites) and blacklists that exclude certain domains or apps from targeting. Just choose the 'New' filter, name it and write a list of values. Or, click 'Select from List' and choose an existing filter. Then select whether it should work as a blacklist or the whitelist.

filter list smartyads dsp

Instead of conclusion

What is display advertising from an advertiser's point of view? Today it means more than just a decade ago. If ten years ago display ads were limited to static banners, today they involve all kinds of rich media creatives that effectively render across mobile devices, desktops, and connected television. Just like any other form of advertising this one holds a great potential if you set up the messaging and the targeting options correctly. On SmartyAds DSP you can configure 30+ targeting options that will help to deliver your display ads to the right audiences at the right time and across the channels they prefer most.

Sign in on SmartyAds DSP and drive higher ROI with impressive display ad campaigns. 

Written by
Irina Kovalenko, CMO of SmartyAds
December 2018