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What Is Digital Advertising and Why Does It Matter?
Marketing Mindsets

What Is Digital Advertising and Why Does It Matter?

March 22, 2024

Digital advertising is the process of using internet technology to deliver promotional advertising to consumers. Digital advertising encompasses promotional ads and messages that are supplied through social media, email, search engine ads, mobile banner ads, affiliate programs and website display ads.

Digital advertising has gone beyond conventional advertising

Just how popular is digital advertising? In 2016, the advertising side of the online environment produced $1.121 trillion for the U.S. economy and is responsible for 10.4 million jobs in the U.S. alone. The growing popularity of digital advertising and the shift away from the conventional advertising methods (billboards, newspapers, radio, commercials, etc) makes sense in this period of connection.

Kinds of Digital Advertising

Here are some of the most common kinds of digital advertising (there are many more):.

Social advertising

Advertisements that depend on social information, platforms or networks to create, target and deliver advertising. Facebook, YouTube and LinkedIn are examples of social platforms with a wide network where businesses can target and deliver advertising.

Display ads/Banner ads

Ads (full banners, squares, buttons and skyscrapers) that are provided to users on a page when they are not necessarily looking for your product or service. These advertisements are presented whenever consumers are surfing online.

Paid search/Search engine advertising

Advertising within the sponsored listings of a search engine website. You pay each time your ad is clicked or when your ad is displayed.

Email advertising

Using email to send ads to current contacts and prospective customers. This can include SPAM, which is not a recommended practice.

Some email networks now offer in-email advertising. Gmail, for instance, uses sponsored, in-line ads directly above the email inbox lines.

Affiliate programs/Ad networks

Companies reward affiliates for bringing them in visitors or customers as the result of the affiliates' marketing and advertising efforts. The marketing and advertising efforts can include a mix of digital and/or conventional advertising techniques.

Mobile advertising

Advertisements that appear on mobile devices that have wireless connections. Mobile ads can be delivered as text ads via SMS, banner ads embedded in a mobile site or ads that appear in mobile games or downloaded apps.

Native advertising

Relevant content distributed from a third party's website. Information is targeted and valuable. Essentially, you're leasing someone else's content distribution platform and offering helpful content as opposed to just promoting your product or service.

Digital advertising cost modals

There are several kinds of digital advertising costing models available, of which all come from the three main types:

  • CPA (Cost Per Action): The advertiser pays the ad publisher only if someone clicks AND completes a transaction. Here, all of the risk falls on the publisher of the advertisement.
  • PPC (Pay Per Click): The advertiser pays when the ad gets clicked, but the advertiser's possible customer does not actually have to complete a purchase for the ad publisher to get paid. With PPC, target keywords are really important. This is the most common form of online advertising as it benefits both the advertiser and publisher.
  • CPM (Cost Per Mille): Also known as CPT (Cost Per Thousand), the advertiser pays the publisher for exposure based on visitors to the website and the number of eyes on an advertisement.

Advantages of digital advertising.

Digital advertising has gained popularity for many reasons. Here are some of the major ones:

  • It is easier to prove ROI.

Clicks and cost can be tracked and more easily measured than a billboard, so it's easier to gauge the effectiveness of the ads.

  • It is easier to track performance.

Similar to the point prior, it is easier to track the performance and measure metrics as the ads are in the digital space where it is easier to capture the data.

  • A company can adjust their advertisement budget more easily.

While particular ad methods like PPC involve a long-game method, in some facets of digital advertising it is easy to shift and adjust bidding and budgets almost instantly.

  • It is more accurate at reaching targeted audiences.

Due to the nature of online information and how information about users is stored online, ads can be targeted on demographic info or based on user behavior.

  • Digital advertising can enhance or complement other ad channels in the mix.

For businesses utilizing an omni-channel marketing strategy, a digital advertisement can complement a billboard or radio commercial. The more places a consumer is reminded of a business, the more the business is kept top of mind.

  • Increases brand recall.

Similar to the point above, the more times a consumer sees a company's ads or branding, the more they are likely to keep that company top of mind. With so many brands out there, it is important to stand apart from the clutter and be a company that users remember.

  • Boosts brand interaction.

A digital ad can lead consumers directly to a company's site, to engage with a business on social media or to purchase a product online.

  • Digital advertisements can accompany users across the entire consumer journey.

Digital ad methods can be shown to users at any stage in the consumer journey, from the research stage, to the purchase stage and even further.

  • It is where attention spans are.

Finally, most people spend a majority of their time in the digital space. Display ads where people are looking, not where they aren't.

Digital Advertising: The Main Sell

Why wouldn't your business transfer your ad spend to where more eyes and attention spans are focused? Seldom are consumers noticing billboards anymore, as they are typically on their phones sending messages, checking emails or connecting with others on social media networks. The world has changed and so has the world of advertising. If you aren't advertising online yet, you might want to consider starting soon. Start including digital advertising to your marketing mix to start reaping the benefits today.

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