Digital Advertising

The Basic Elements of Digital Advertising

Digital advertising encompasses a number of activities and a broad range of media. The building blocks of digital advertising include:

• Display ads – the ads that appear on websites as banners, pop-ups, video ads, text, and images.
• Video ads – these ads appear in banner ads or are played before, during, or after the viewing of a video on a website.
• Search engine marketing – these are the text-based ads that appear on a search engine results page (SERP) in Google, Bing, Yahoo, and other search engines. They are designed to put a brand’s message in front of a user at the critical moment the user is searching for a product or service.
• Social media ads – ads that appear on social media platforms like Facebook, YouTube, Instagram, and Twitter. Social media has grown so rapidly that there are now Facebook marketing firms that focus solely on producing and managing Facebook ads and content.
• Native advertising – ads that appear as a seamless visual continuation of the user experience within a website or an online platform. Native ads don’t look like typical ads and may appear under headings such as “Promoted Stories”, “Related Stories”, or “Recommended Reading”.

Critical Metrics in Digital Advertising

The extraordinary effectiveness of digital advertising is due to the ability to accurately measure the effectiveness of any campaign. Metrics help to understand what works well and what doesn’t, enabling companies to continually refine their advertising efforts to improve results and ROI. The most important metrics to track in digital advertising include:

• Reach – the number of individual audience members who saw your ads.
• Impressions – the total number of times your ads were viewed by all users, including users who saw your ads more than once.
• Click through rate (CTR) – the percentage of clicks on an ad out of the total number of impressions.
• Conversions – the number of users who completed an action like clicking on ad to purchase a product, download content, or sign up for services.
• Cost per acquisition – the cost to acquire a paying customer, calculated as the cost of a campaign divided by the number of customers it produced.
• Lifetime value – the amount of revenue that each new customer brings in. This is calculated by multiplying customers’ average transaction amount by the annual purchase frequency and the expected years that a customer relationship will last.
• Return on investment – the amount of revenue generated by campaign compared to the cost required to mount it.

Digital Advertising Trends

Digital advertising is constantly evolving as advertisers seek new and more effective ways to reach audiences, and as the online behavior of audiences continues to change.

Here are several of the most important recent trends in digital advertising:

• Video. Video advertising has been steadily rising since 2016 and is expected to continue to dominate users’ attention. 90% of customers say videos help them make buying decisions, and the number of people who prefer to watch a video about a product is four times higher than those that prefer just to read about it. .
• Native advertising. Native ads are less intrusive than other forms of display advertising. By showcasing content that’s relevant to what the user is already consuming, native ads provide value without disrupting the user experience. It’s no wonder that spending on native digital display ads has been steadily rising by 50% or more each year.
• Augmented reality. Augmented reality technology adds another dimension to digital advertising, enabling audiences to experience and explore products in a new way. With augmented reality, audiences can use mobile devices to see what a product might look like in their home or office or to have a virtual reality experience related to brand.
• Voice search. Audiences are increasingly using digital assistants to search the web for products and information, significantly changing the way that digital advertisers will manage search engine marketing.