Display advertising is everywhere you look online, from banner ads on news sites to video promotions in your favorite app. In fact, advertisers worldwide spent over $207 billion on digital display ads in 2023, making it the single largest format in online advertising. Despite relatively low banner click-through rates (often under 0.5% on average), brands continue to invest heavily in display because it drives massive reach, awareness, and retargeting opportunities that support the entire marketing funnel.

What Is Display Advertising? An Overview

Display advertising (also known as display marketing) involves promoting products, services, or brands through visually engaging ads, including banners, images, videos, and rich media, displayed across websites, mobile apps, and other digital platforms. These ads combine attention-grabbing visuals with resonant copy to capture user attention and drive clicks or conversions.

Display ads differ from search ads in how they are delivered. While search advertising is an inbound tactic that serves ads in response to user queries, display advertising is an outbound strategy that proactively shows ads to users as they browse online content, building awareness and interest among those who may not yet know your product. This makes display especially effective for broad brand building and for remarketing, complementing the intent-driven nature of search advertising.

How Does Display Advertising Work?

Modern display advertising is powered by programmatic technology and vast ad networks that automate the ad buying process. 

When a user visits a website or opens an app with ad space, a request is sent to an ad server or an ad exchange to fill that slot. Advertisers bid in real time for impressions, often via automated programmatic auctions that occur in milliseconds. The ad platform selects the winning ad based on the highest bid and relevance, then instantly displays it on the page or app. This all occurs seamlessly before the page finishes loading.

Advertisers can set targeting parameters to control who sees their display ads. Using demographic, geographic, contextual, and behavioral data, marketers can ensure ads are shown to users most likely to be interested. The ability to specify audience attributes (e.g., age, gender, location, interests) and even past browsing behavior enables display campaigns to be hyper-targeted to relevant audiences.

Advertisers supply creative assets, such as images, ad copy, videos, and interactive media, in various standard sizes. Many use responsive ads that can automatically adjust format to fit different placements. The system matches an appropriate creative to each placement in real time.

Display ads are typically purchased on a cost-per-thousand-impressions (CPM) basis, though other pricing models exist. In a CPM model, the advertiser pays a set rate per 1,000 ad impressions served. Alternatives include cost-per-click (CPC), where you pay only when a user clicks your ad, or cost-per-acquisition (CPA), where payment is tied to conversions. For example, Google’s Display Network (GDN) often delivers impressions at just a few dollars CPM, and an average CPC of around $0.63, far lower than the ~$2.69 average CPC on Google’s search network. This auction-driven pricing ties costs directly to demand and performance.

One of display advertising’s strengths is its measurability and optimization. As ads run, advertisers track key metrics in real time, including impressions served, clicks, click-through rate, conversions, cost per conversion, and more. Campaigns can then be adjusted on the fly: pausing underperforming creatives, refining targeting, or adjusting bids and budgets to improve results.

Behind the scenes, the ecosystem includes players such as demand-side platforms (DSPs), which brands use to buy ads; supply-side platforms (SSPs), which publishers use to sell ad space; and ad exchanges that connect the two. For most marketers, the heavy lifting is handled by their advertising platforms. 

The scale of the “open web” display advertising is enormous. For example, Google’s display network alone spans over 35 million websites and mobile apps. This reach gives even niche or emerging brands an opportunity to reach large audiences through display ads.

Types of Display Advertising

“Display advertising” actually encompasses a variety of ad formats and placements. Marketers have a toolbox of creative types to choose from. Key display ad formats include:

Banner Ads

The classic display format. Static or animated image ads that typically appear in designated banner slots at the top, side, or bottom of web pages. Common banner sizes include the leaderboard (728x90 pixels), medium rectangle (300×250), skyscraper (160×600), and more. Banner ads are often used for broad awareness campaigns and can be still images or simple GIF animations.

Rich Media Ads

These are more interactive display units that can include animation, video, audio, or elements that users can engage with (such as hover-to-expand content, product carousels, or playable mini-games). Rich media ads aim to boost engagement by offering a more dynamic experience than a static banner. For example, a rich media ad for a car might let users click to rotate a 360° view of the vehicle inside the ad frame.

Video Ads

Video has become a popular component of display advertising. Short video ads can run within standard display ad slots on webpages or in-app, or appear as in-stream video. Video ads are highly engaging and great for storytelling or product demos. Many programmatic platforms allow you to serve video creatives across their display networks, extending beyond social media and YouTube.

Interstitial and Pop-Up Ads

An interstitial is a full-screen ad that covers the interface of its host app or site, often appearing at natural transition points (such as between page loads or levels of a game). These grab the viewer’s complete attention, but can also annoy users if overused. Traditional pop-up ads are a form of interstitial that was common in earlier web days. Modern browsers often block unsolicited pop-ups, so today interstitials are usually served within app experiences or on publisher sites with controlled frequency.

Native Ads

Native advertising is often considered a category of its own, but it overlaps with display. Native ads are ads designed to blend into the content environment in which they appear, matching the look, feel, and format of organic content. Native display ads can achieve higher engagement because they feel less intrusive, though they must be clearly disclosed as advertising. Many native ad placements are bought programmatically, similar to standard banners.

Other formats and terms you might encounter include lightbox ads (expandable ad units), social display (ads served in social media feeds via display networks), and more. The landscape is always evolving, but the core idea is that display advertising uses visual ad units in various shapes and sizes to reach online audiences.

Benefits of Display Advertising

Why do brands continue to allocate significant budget to display advertising? Done correctly, display offers several compelling benefits in a modern marketing strategy.

Wide reach across the open web

Display campaigns can reach vast audiences across millions of websites and apps. Unlike search or email marketing, which only reach specific touchpoints, display ads let you blanket the open web and get in front of potential customers wherever they consume content. For instance, Google’s network alone can reach about 90% of all internet users worldwide. This broad reach helps build brand awareness at scale, ensuring your brand is seen by a large volume of relevant people across different sites. In short, display advertising massively extends your brand visibility beyond your own properties.

Cost-efficient impressions

As a primarily CPM-based medium, display is an extremely cost-efficient way to generate impressions and exposure. You can show your ad thousands of times for relatively little cost. In paid search or sponsored social posts, reaching that many eyeballs could cost significantly more. Even accounting for lower click-through rates, display delivers inexpensive brand exposure. This makes it ideal for fueling upper-funnel awareness without breaking the bank. Marketers often use display to keep their brand top-of-mind through affordable, continuous impressions.

Supports both brand and performance goals

Display advertising is incredibly versatile. It can serve brand marketing objectives, such as generating awareness, familiarity, and positive brand perception, through high-impact visuals and broad reach. At the same time, it supports performance marketing goals by driving traffic, generating leads, and increasing conversions, especially when using tactics such as retargeting. In fact, display is often used in a full-funnel approach. A campaign might use widespread banner ads for awareness, then follow up with more targeted product ads or offers to drive action. Modern display platforms enable this seamlessly. As one source notes, display ads can support everything from upper-funnel brand engagement to lower-funnel direct response and lead generation in the same campaign. In practice, this means a well-run display program can simultaneously build your brand equity and deliver measurable ROI through conversions.

Strong retargeting and “reminder” value

One of the most powerful uses of display ads is retargeting (also called remarketing). This means serving ads to people who have previously interacted with your brand. Display retargeting is highly effective at re-engaging these warm prospects and nudging them toward conversion. Research shows that retargeted visitors are about 70% more likely to convert than those who weren’t shown retargeting ads. Similarly, retargeted ad campaigns often see click-through rates 10x higher than those of standard display campaigns, reflecting the greater interest of the targeted audience. Even if users don’t click immediately, these ads serve as valuable reminders to keep your brand and products top-of-mind as prospects continue their buyer’s journey. 

Visual, creative formats for awareness and engagement

Unlike text-only ads, display ads leverage imagery, color, typography, and even motion to communicate your message. This visual impact is critical for brand awareness, as human beings are wired to respond to visuals. A well-designed display ad can tell a story or evoke an emotion in a split second. Repeated exposure to these visuals builds familiarity and brand recall. According to marketing experts, when users repeatedly see a well-designed visual ad, the brand becomes more memorable over time because those visual cues reinforce recognition. Additionally, rich media and video formats enable interactive storytelling, which can significantly increase engagement compared to static formats.

In combination, these benefits make display advertising a powerful component of a multi-channel strategy. It’s one of the few channels that can reliably deliver mass reach with control over targeting, at a relatively low cost, while also providing measurable results. 

Why Use Display Advertising?

With so many marketing tactics available, from search engines to social media to content marketing, why should mid-market and enterprise brands invest in display ads? The short answer is that display advertising adds unique value that other channels often cannot fully replace. 

1. Ubiquitous presence and brand consistency

Display advertising enables your brand to maintain a constant presence across the web. Display ads let you reach your audience wherever they go online, ensuring consistent messaging and brand exposure. This ubiquity is key to brand building. Companies that want to drive awareness at scale (especially for new product launches or brand campaigns) rely on display networks to reach their target audiences widely and repeatedly.

2. Complements search and social marketing

A well-rounded digital strategy uses channels in concert. Display advertising plays a complementary role to search and social media marketing. It can generate initial interest that later leads to search demand. It also reaches people who might not follow your social media or find you via SEO. By filling those gaps, display ads can amplify the impact of other channels. In fact, studies have found that running display ads can lift brand-related search queries and site visitation, essentially priming the funnel for your other campaigns. 

3. Highly measurable and optimizable

Unlike traditional billboard or TV ads, digital display gives you detailed performance data. Every impression, click, and conversion can be tracked, and advanced analytics can even measure view-through conversions (cases where a user saw your ad and later converted without clicking). As Adobe’s marketing guide notes, display advertising offers “robust measurement capabilities, allowing advertisers to track metrics like reach, conversion rate, and return on ad spend (ROAS)”. This means you can confidently allocate budget, see what’s working, and adjust for efficiency. Over time, data-driven optimization (e.g., reallocating spend to higher-converting sites or creatives) can dramatically improve your return on ad spend. The ability to prove impact with numbers is a big reason companies continue to use display.

4. Proven effectiveness

Some skeptics claim that “banner ads don’t work,” citing low click-through rates and the rise of ad blockers. It’s true that sloppy or generic display campaigns can underperform. But when done correctly, display advertising is highly effective, which is why 84% of marketers still invest in display ads today. In recent years, better targeting, dynamic creative optimization, and frequency capping have improved the relevance of display ads and reduced banner fatigue. Moreover, display’s impact often manifests in indirect ways. For example, increased brand searches, direct traffic, or later conversions that were influenced by seeing the ads (even if no click occurred). Smart marketers recognize these halo effects. They use controlled experiments and incrementality testing to verify that display campaigns drive lift in brand awareness, consideration, and sales when properly targeted and messaged. The continued growth of display spending (projected to reach $266 billion globally by 2026) underscores its value to advertisers across industries.

In summary, display advertising remains a staple of the marketing mix because it offers reach, flexibility, and data-driven results that few other channels can match. Whether your goal is to swiftly raise awareness for a new product, stay top-of-mind in a competitive market, or efficiently re-engage past website visitors, display ads provide a proven vehicle to get the job done.

Learn how Agility’s precision brand advertising platform can help your brand harness the full power of display advertising alongside other open internet marketing channels. Get started today!

FAQs

Are display ads still effective?

Yes. Display ads can be highly effective, especially when part of a balanced precision brand advertising strategy. It’s true that average direct response metrics (like click-through rates around 0.3–0.5%) are lower than some other channels. However, judging display ads only by clicks misses the bigger picture of their impact. Display advertising excels at building awareness and influencing customer behavior over time, even if many users don’t click the banner right away. In fact, many advertisers see significant “view-through” conversions (users who eventually convert after seeing ads, without clicking) and uplifts in brand searches and website visits attributable to display campaigns. The continued heavy investment in display by 80%+ of marketers shows that it delivers value. The key is to do it right: use precise targeting so the ads are relevant, invest in good creative that catches attention, and measure the true incremental impact. 

Can display advertising be targeted to specific audiences?

Absolutely. One of the greatest strengths of display advertising is the wealth of targeting options available. Marketers can hone in on specific audiences based on demographics (age, gender, income, etc.), geographic location, interests and affinities, browsing behavior, and more. Display networks leverage data from cookies, mobile IDs, and user profiles to enable behavioral and interest-based targeting. You can also use contextual targeting, selecting keywords or site categories so that your ads appear on pages directly related to your product. Retargeting also lets you reach people who previously visited your site or engaged with your app, which is often the highest-yield targeting of all. In short, display advertising is extremely flexible. With the right platform, you can serve ads to a narrowly defined audience that matches your ideal customer profile, rather than blasting out to everyone. 

Can display advertising be measured?

Yes, display advertising is highly measurable. In fact, its measurability is a major advantage over traditional advertising. Advertisers can track a range of performance metrics for display campaigns in real time. At a basic level, you’ll see impressions and clicks, which let you calculate click-through rate (CTR). But modern platforms go well beyond that. You can measure conversions driven by viewers seeing or clicking your ads by integrating your display ads with analytics and attribution tools. This yields metrics like cost per acquisition (CPA) and return on ad spend (ROAS) for your display campaigns.

For awareness campaigns, you might look at reach and frequency. Brands can also run brand lift studies to measure the incremental impact of display ads on metrics such as brand recall, favorability, and purchase intent. These involve surveying exposed vs. control audiences to see the difference in brand metrics attributable to the ad campaign. Additionally, view-through conversion tracking helps capture users who saw an ad and later converted without clicking.