If you want to reach a wide audience, you need to go where your customers are — online. According to Pew Research Center, 81% of American adults go online every day, and 28% of these individuals are online almost constantly. The most popular online activities include:

  • Watching video
  • Using social networks
  • Shopping
  • Streaming or downloading music or podcasts

All of these activities offer opportunities to promote your brand, convert visitors to customers, and ultimately boost revenue. Digital advertising is a way to connect with customers online, regardless of the product you sell or your marketing budget.

In the past, businesses relied on newspaper, magazine, radio, cable TV, and billboard ads to grab attention and sell their products. Today, digital advertising surpasses traditional forms and is vital to a company’s success. Every year, businesses across the globe spend billions of dollars on digital marketing efforts due to its high return on investment (ROI).

If you’re new to digital advertising and want to learn how it works, you’ve come to the right place. This guide covers the different types of digital advertising, best practices, and how to get started.

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Table of Contents:

What Is the Definition of Digital Advertising?

Digital advertising refers to promotional content used to reach a target audience online. Examples of digital advertising include website and social media ads. Digital advertising is an aspect of a digital marketing campaign and allows you to accomplish the following:

  • Educate consumers about your product or service
  • Convince customers that your product or service is better than what your competitors offer
  • Improve your brand’s image
  • Promote a new product
  • Create a need or desire for your product or services
  • Attract or retain customers

In some ways, digital advertising is similar to traditional advertising. For example, like traditional ads, online advertisements often use colorful, eye-catching images to draw attention. Unlike traditional advertising, though, digital advertising invites users to click on the ad and go directly to your company’s website. As customers interact with your advertisements, you’ll collect data. You can then use this data to track the ad’s performance and learn about your target audience.

What Is Programmatic Advertising?

Programmatic advertising uses technology and data to buy and sell online ad space in real-time automatically. You can use programmatic advertising to buy digital ad space from a publisher’s mobile app or website and engage your target audience at the right moments. A publisher is a person or company who displays ads or other digital content on their website. Programmatic advertising can be applied to various channels, including video, display, audio, mobile, native and more.

Programmatic advertising provides efficient ways to quickly and easily reach your ideal customers online. By incorporating programmatic advertising into your digital marketing campaign, you can increase your reach and ROI.

What Are the Types of Digital Advertising?

You can choose from various digital advertising channels for each campaign, or you can use programmatic advertising technology to run your digital ads across multiple channels automatically. Digital advertising formats include:

1. Display Advertising

Display ads are banner ads that appear in the header, footer, or sidebar of a website or app. They commonly include text and images and may be static, interactive, or animated.

Ad networks like Google or Facebook often work with publishers and advertisers to enable the buying and selling of display ad space. Publishers earn money when users click on the advertisements. As the advertiser, you can benefit from having your ad seen by your target audience and generating leads.

2. Video Advertising

Video advertisements are displayed before, during, or after video content. Video ads can also be standalone solutions. If you regularly watch videos on YouTube, for instance, you’ve likely seen video advertisements. Video ads are commonly displayed through programmatic advertising, targeting a specific audience based on data.

The demand for video content is on the rise, becoming the most popular digital advertising format available. According to Social Media Week, nearly 80% of people watch videos online every week, and 55% consume videos every day. The majority of viewers also share video content with others and prefer learning about new products via video. It’s not surprising that 99% of marketers say they plan to continue using video in their marketing efforts.

3. Native Advertising

Native ads do not look like advertisements. Instead, native ads blend in with published content.

For example, if you read an article on a company’s website, a native ad might appear under “recommended reading.” If you click on the “recommended” article, it’ll take you to the advertiser’s website.

Another example of native advertising is seeing one company’s sponsored content on another company’s website. Native advertising is an effective way to promote brand-related content and engage your audience.

4. Social Advertising

Social advertising uses social media platforms to promote your product or service. Social media platforms, such as Facebook, Twitter, and Instagram, collect users’ data to enable improved targeting. If you opt for programmatic social advertising, these platforms will apply this data to determine who will see your advertisements and when.

By advertising your product on social media, you can target a specific audience more accurately than other advertisement forms and expand your reach. Social media also allows mobile digital advertising. Many customers use mobile devices to check their social media feeds. In 2019, an estimated 3.46 billion people were active mobile social media users across the globe.

5. Search Engine Marketing

Search engine marketing (SEM) or paid search marketing allows you to pay to have your advertisements appear on search engine results pages. With SEM, you might bid on keywords related to your product or service. When customers use a service like Google and type the keywords into a search box, your advertisement will appear alongside the search results. SEM allows you to place your product in front of consumers when they’re ready to buy.

6. Connected TV Advertising

Connected TV (CTV) advertising is designed for internet streaming services connected to TVs, computers, tablets, and smartphones. CTV allows you to develop an omnichannel marketing strategy and connect with consumers as they watch their favorite TV shows. CTV reaches nearly 60% of the population in the United States, and it’s expected to grow by about 3% by 2023.

7. Digital Audio Advertising

Digital audio advertising places ads in online audio content such as podcasts, streamed music, and digital radio. The average American adult will spend nearly 90 minutes a day consuming digital audio content by 2021.

With programmatic audio advertising, you can target listeners in real-time based on their behavior. This type of advertising can be a vital part of a larger marketing campaign.

8. Digital Out-of-Home Advertising

Digital out-of-home (DOOH) advertising refers to digital advertisements displayed in public spaces. A digital billboard is an example of DOOH.

DOOH offers a way to engage your customers when other channels, like computers or TVs, aren’t available. Even though DOOH takes place outside a viewer’s home, it can still be used to target a specific audience. For example, you might place interactive touch screen displays near stores where your customers shop.

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Why Do Companies Use Digital Advertising?

Advertisements are meant to be seen. With most Americans spending a significant amount of time online, it makes sense to choose digital advertising. The benefits of digital marketing include:

  • Worldwide reach: Digital advertisements are not confined to geographic locations. Anyone can see your advertisements no matter where they are in the world, as long as they have internet access.
  • Budget-friendly options: Digital advertising does not have to put your company in debt. You can start advertising your business online with a small investment. For example, you might create a social media account or start a blog.
  • Easy-to-measure ROI: With digital advertising, it’s much easier to measure ROI and evaluate your marketing campaign’s effectiveness than traditional methods. You can also see results in real-time. This allows you to make well-informed decisions quickly and enhance your campaign.
  • Better targeting: Digital advertising involves data collection. It allows you to learn specific details about customers, such as their demographic information, likes, and dislikes. You can use this data to create advertisements that speak personally to your target audience.
  • Keep up with competitors: It’s highly likely your competition is already using digital advertising to attract customers. To get ahead, you need to go beyond what others are doing.

Does Digital Advertising Work?

For many brands, digital advertising drives results, increasing traffic, application downloads, sales, and ROI. However, for a digital advertising campaign to work, you need to have a strategy. Your strategy can give you direction and help you focus on aspects that will make the greatest impact.

At AUDIENCEX, we help brands and agencies develop creative, effective digital marketing strategies before launching a campaign. Here are some examples of how we’ve helped various industries meet their campaign goals:

  • Auto industry: A car manufacturer had the goal to increase engine oil sales online and boost traffic to their website. We targeted their customers and DIYers with a compelling display and social campaign across all devices. As a result, the company saw sales and site visitation double, surpassing their goals.
  • Retail industry: A big-box retailer wanted to drive foot traffic to their stores and increase the purchase of a balloon product line. We targeted parents of young children and buyers of outdoor games, toys, and party supplies. We also used historical geofencing, which involves a location-based strategy to identify and target shoppers. The campaign drove a 16% lift for in-store traffic and delivered a view-through rate 30% higher than the industry average.
  • Health and wellness industry: A fitness company and franchisor needed to increase their membership sign-ups in a specific region. The company had a goal of a $60 cost per acquisition (CPA) or less. Our team combined a broad tactical methodology with granular geotargeting to consistently reach their target audience. The strategy resulted in approximately 25,000 conversions at a CPA far below the company’s goal.

Check out more of our case studies to explore our results and see what we can do for your company, no matter what industry you’re in.

What Metrics Are Important to Digital Advertisers?

Digital advertising metrics allow you to track your campaign and identify what’s working and what needs to change. It’s essential to regularly check your advertising metrics to make necessary changes and get the results you want.

There are dozens of metrics you can use to monitor your campaign. The type of metrics you use should be tied to your goals and chosen channels. To help you get started, here are a few key metrics to consider:

  • Click-through rate (CTR): Your CTR shows you the percentage of people who clicked on your ad compared to the percentage of those who saw your ad. Your CTR helps you determine whether your ad is effective.
  • Conversions: A conversion is when a customer performs a desired action resulting from your advertising message. Your conversions show you how many people followed your call-to-action.
  • Cost per acquisition (CPA): CPA shows how much it costs you to acquire a new customer on average. You can figure out your CPA by dividing your campaign costs by the number of new client conversions.
  • Return on ad spend (ROAS): Your ROAS shows the overall effectiveness of your ad campaign. It compares the revenue gained resulting from the campaign to the cost of the campaign.
  • Bounce rate: Bounce rate displays how many people visit your website and leave without acting. Your bounce rate helps you identify issues with your site.
  • Reach: Reach refers to how many people saw your ad.
  • Cost-per-click (CPC): CPC is an average of how much you pay for someone to click on your ad. Usually, your ad platform will calculate this metric.
  • Impressions: Impressions describe the number of times your ad was displayed. This metric adds up even if it’s the same person viewing your ad multiple times.
  • View-through rate (VTR): Your VTR shows how many people completed viewing a skippable ad over the number of impressions.
  • Cost-per-thousand impressions (CPM): CPM refers to how much you pay per 1,000 views or impressions of your ad.

3 Digital Advertising Best Practices

The average person is bombarded with ads, seeing roughly 5,000 ads or more per day. It’s important to set your ads apart and stick in customers’ minds. Here are three best practices to remember:

1. Use a Clear Call-to-Action

Your call-to-action (CTA) prompts users to take a specific action, such as contact your company, buy a product, or sign up for a service. Typically, the CTA is written as a command and includes a hyperlink or button to lead users to the next step.

Make sure your CTA is short, simple, highly visible, and easy to understand. You want your CTA to grab users’ attention and make it easy for them to move forward.

2. Share What Makes You Different Than Your Competitors

You need to set yourself apart from competitors to attract customers and develop an effective campaign. Use your ad campaign to illustrate your company’s unique features and benefits. Offer creative and engaging content through every step of the sales funnel.

3. Always Be Testing

Digital advertising is not something you can set and forget. You need to keep an eye on metrics and use A/B testing to see how your website or app performs in variations. Don’t be afraid to experiment until you find what works. Learn what appeals to your audience most and use your data to alter ads accordingly.

How to Get Started With Digital Advertising

Digital advertising includes various components, and each part plays a critical role in a successful campaign. Here’s a simple overview to help you get started:

  • Establish goals: The first step to creating a digital advertising campaign is to identify your goals. Your goals will guide your decisions throughout the process. For example, maybe you want to boost app downloads or increase traffic to your website. Be specific and define your goals clearly so everyone on your team can be on the same page.
  • Select an ad format: Decide which type of ads will help you reach your target audience. For example, you might choose display, native, or video ad formats.
  • Choose your platform: Determine which platforms you want to use. You might select multiple platforms to reach a wider audience. Platforms include social media and search engines.
  • Set your budget: Decide the total budget you need to run your campaign, break down the costs, and determine a projected ROI.
  • Determine metrics: How do you want to measure your campaign’s success? Make sure you set up the right tracking features in your ad platform before you launch.

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Digital Advertising FAQs

Still have questions? Take a look at the answers to some of the FAQs we frequently encounter:

What Challenges Do Digital Advertisers Face?

Success often follows challenges, and digital advertising is no exception. But, that doesn’t mean you can’t tackle whatever obstacles come your way. If you’re aware of the potential challenges you might face, you’ll have a head start. Here are common roadblocks in digital advertising:

  • Brand safety: Sometimes, ads appear next to questionable content. This can create an undesirable association with your brand. Working with advanced tools and artificial intelligence can help prevent this issue.
  • Ad blockers: Many consumers use ad blockers, which can impact your campaign. The good news is you can use various strategies to overcome this challenge and reach your target audience. For example, you can use search engine optimization to connect with customers more naturally through search results.
  • Market saturation: Some platforms, like social media, are crowded with ads. However, if you use more interesting, customer-centric ads than competitors, you’re bound to stand out.
  • User privacy: To keep your ads from feeling like an invasion of privacy, it’s crucial to find the right balance. Ads should feel personalized to consumers but not creepy. One way to avoid privacy issues is to focus on a specific demographic or area rather than an exact location.

What Is the Future of Digital Advertising?

Current digital advertising trends include a surge in video advertising, automation, and omnichannel marketing. Soon, you might expect to see more of the following:

  • Micro- and nano-influencer marketing
  • Immersive experiences
  • Artificial intelligence and programmatic advertising
  • Short-form video content
  • Social media shopping capabilities

What’s the Difference Between Digital Advertising and Traditional Advertising?

Even though traditional advertising and digital advertising both aim to capture attention, they aren’t identical. Here’s how digital advertising differs from traditional forms:

  • You can reach a global audience: Unlike traditional advertising, digital ads allow you to connect with customers anywhere in the world.
  • You can collect data: Digital advertising campaigns make it easy to track your efforts and measure results. You can use this data to improve your campaign’s performance.
  • You have tons of options: Unlike traditional advertising, which limits what you can do, digital advertising offers plenty of options. You can launch ads on various platforms and choose an array of ad formats. These options can help you reach different goals.
  • You’ll have immediate results: Immediately after you launch your campaign, you can start tracking its results. This allows you to resolve campaign issues much faster than traditional methods.
  • You can reach customers on the go: Digital advertising enables mobile marketing. No matter where your customers are, you can connect with them through their smartphones and mobile devices.
  • You can build relationships: Digital marketing allows you to have conversations with your target audience. For example, if a customer comments on your social media post, you can respond and keep them engaged.

How Much Does Digital Advertising Cost?

The cost of running a digital advertising campaign depends on your goals, strategies, and budget. Even if you have a small budget for marketing, you can advertise your products or services online. Generally, small businesses start by focusing on low-cost marketing methods, which typically cost several hundred dollars a month. Large companies might include various channels in their campaigns and use more resources. A more established enterprise might invest tens of thousands of dollars per month on digital advertising.

How Do You Create a Digital Advertising Strategy?

Digital advertising strategies require several actions. You’ll need to spend time researching your audience, collecting data, and setting goals. Here are five steps to follow to create a successful digital advertising strategy:

  1. Analyze past campaigns for guidance.
  2. Define your brand’s mission and unique selling points.
  3. Research your target audience and create buyer personas.
  4. Understand the digital sales funnel.
  5. Create specific and realistic goals.

Are You Ready for the Power of X?

Digital advertising has many advantages, like connecting with your target audience easily. If you’re ready to design an impactful digital advertising campaign, we’re ready to help at AUDIENCEX. To learn more about our digital advertising solutions, contact us today.

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