What Are Display Ads in Digital Marketing: Definition & How it Works

Display ads are paid advertising formats using banners, images, and videos shown across various online channels. They fit strategies ranging from lead generation to brand awareness, giving brands a visual tool to increase visibility and engage target audiences.

Despite claims that banner ads have lost relevance in digital marketing, data proves otherwise. WordStream reports that 27% of people search for a business after seeing a display ad, leading to a 59% jump in conversions, while 92% of marketers rate retargeting display ads as equal or better than search ads. When paired with tailored landing pages, display ads often convert more efficiently by matching the ad’s promise with a focused, distraction-free destination.

In this article, we explore how display ads work, their key benefits, and how businesses use them to enhance online visibility and improve conversion rates. Read on and inspire your future campaigns!

What Are Display Ads?

Display ads are a visual form of online advertising that uses images, banners, or videos to promote products, services, or brands. They appear across websites, apps, and social media platforms, often managed through networks like Google Display Network or Facebook Ads.

Unlike search ads, which rely on text, display ads attract attention with creative visuals and smart placement. Formats such as animated and interactive ads boost engagement, making them a core part of digital marketing. Like other PPC ads, they target users based on demographics, interests, and behavior through retargeting.

How Do Display Ads Work?

Display ads work by combining targeting, placement, and tracking to reach the right audience across websites, apps, and platforms. Advertisers create visual ads and distribute them through networks like Google Display Network or Facebook Audience Network. These networks place the ads on partner sites based on the targeting criteria set by advertisers.

Targeting is central to display ad success. Marketers can define audiences by demographics, interests, online behavior, or remarketing lists. Contextual targeting aligns ads with website content, while behavioral targeting uses user activity to deliver more personalized messages.

When someone visits a site, the ad network quickly decides whether to show an ad based on:

• relevance,
• bidding strategies,
• quality of the ad.

Advertisers compete for placements using cost-per-click (CPC) or cost-per-mille (CPM) models.

Performance tracking is key. Platforms like Google Ads measure impressions, click-through rates (CTR), and conversions. With this data, advertisers can tweak targeting, improve creatives, and adjust bids to maximize results.

How to Measure Display Ad Performance?

Tracking display ad performance relies on key metrics that reveal visibility, engagement, and conversions. With tools like Google Ads, Facebook Ads Manager, and third-party analytics, you can monitor and improve your campaigns based on real-time data.

Here are the core metrics to watch:

1. Impressions – how often your ad appears. A high number shows broad reach but doesn’t guarantee engagement.
2. Click-Through Rate (CTR) – the percentage of users who click after seeing your ad. A strong CTR signals effective creatives and targeting.
3. Conversion Rate – how many users complete a desired action, like signing up or purchasing. Higher rates reflect campaign success
4. Cost Per Click (CPC) – how much you pay for each click. Lower CPC means better cost efficiency.
5. Cost Per Mille (CPM) – the cost for 1,000 impressions. Useful for gauging exposure-based campaigns.
6. Return on Ad Spend (ROAS) – revenue generated for every dollar spent. High ROAS = strong profitability.
7. Viewability Rate – the share of ads that appear visibly on-screen. Google counts an ad as “viewable” if 50% is visible for at least 1 second (display) or 2 seconds (video).
8. Engagement Metrics – track actions like video views, hover rates, or ad expansions to assess interaction with rich media.
9. Attribution Analysis – shows how display ads influence the customer journey by mapping multi-touch interactions before conversion.

What Is the Importance of Display Advertising in Digital Marketing?

Display advertising plays a key role in digital marketing by boosting brand awareness, increasing engagement, and driving conversions through visually rich ads shown across the web. Unlike search ads, which target users with intent, display ads reach people who aren’t actively looking yet – expanding the brand’s reach.

These ads boost visibility with broad audience targeting. Marketers can segment by demographics, interests, behavior, or context, and re-engage past visitors through retargeting. Formats like banners, video, and interactive ads grab attention more effectively than plain text, improving message retention.

With CPC and CPM models, advertisers can align spending with their goals. Display ads also offer cross-device reach, appearing on desktops, mobile, and apps, keeping the brand present throughout the customer journey. Most importantly, they allow real-time tracking and ongoing optimization.

From brand discovery to conversion, display ads support the full funnel. In fact, Techjury reports that users who view display ads are 155% more likely to search for the brand – proving their power to spark interest and action.

9 Different Types of Display Advertising in Online Marketing

Display advertising comes in many formats, each with a unique purpose. From banners and videos to interactive or native ads, these formats differ in placement, engagement level, and goals. Whether you’re building brand awareness, boosting engagement, or driving conversions, choosing the right mix ensures stronger results.

Here are the most common types of display ads used today:

1. Banner Ads

Banner ads are the most recognizable display ad format, typically placed at the top, bottom, or side of web pages. They use static or animated visuals to grab attention and drive clicks. Though often used for brand visibility, well-designed banners can also support conversions. They’re usually priced by CPC or CPM, offering affordable reach.

2. Rich Media Ads

Rich media ads are an advanced form of digital display advertising. These interactive ads include animations, videos, or expandable content. Unlike static banners, they invite user interaction, boosting engagement and memorability. Examples include floating ads, expandable panels, and interactive quizzes or games.

3. Video Ads

Video ads are highly engaging digital advertisements that use motion and sound to engage users across websites, apps, and social media platforms like YouTube. They appear as pre-roll, mid-roll, or post-roll clips. With strong storytelling and high visual impact, they enhance brand recall and drive action.

4. Native Ads

Native ads blend naturally with surrounding content, often appearing in-feed, within articles, or as recommended links. Their non-intrusive design builds trust and delivers higher click-through rates, making them ideal for awareness and conversions.

5. Retargeting (Remarketing) Ads

Retargeting ads focus on users who visited your site but didn’t convert. Using cookies, they show reminders of products or services across other sites, keeping your brand top of mind. This approach helps recover lost traffic and improves conversion rates by re-engaging interested users.

6. Social Media Display Ads

Social media display ads run on platforms like Facebook, Instagram, LinkedIn, and X (formerly Twitter). With detailed targeting based on interests, behavior, and demographics, social ads are ideal for reaching wide audiences, boosting engagement, and driving conversions across devices.

7. Pop-Up and Pop-Under Ads

These formats appear over (pop-up) or behind (pop-under) web pages to grab attention. Pop-ups prompt immediate interaction, while pop-unders appear after the user closes a window. While effective for lead generation, they can hurt user experience if not used sparingly.

8. Interstitial Ads

Interstitial ads are full-screen ads that show during transitions, like between page loads or app screens. Their large format ensures visibility and high engagement. When placed strategically, they can drive strong conversions without disrupting flow.

9. Google Display Network (GDN) Ads

GDN ads reach 90% of internet users through Google’s 2+ million partner sites, apps, and YouTube. They support banners, video, and responsive formats with targeting based on demographics, interests, and behavior. With CPC or CPM pricing, GDN offers scalable reach and performance.

7 Advantages of Display Ads

Display advertising offers major benefits in digital marketing, from boosting visibility to tracking results. Here’s why it’s a go-to strategy for brands looking to grow online:

1. Increased Brand Awareness

Display ads increase visibility by reaching large audiences across websites, apps, and social platforms. Their visual design, unlike plain text, grabs attention and reinforces brand identity through repeated exposure.

2. Advanced Targeting Options

Advertisers can go beyond demographics with targeting options like contextual placement, interest-based behavior, and remarketing. Custom audience targeting lets businesses use their own data to re-engage existing customers or reach similar ones. This precision helps maximize relevance, reduce wasted spend, and improve ROI.

3. Cost-Effectiveness

With flexible budgets and pricing models like CPC and CPM, display ads offer efficient spend control. You can set daily limits, pay only for clicks, and use programmatic tools to automate bidding. The result: measurable performance and high value at scale.

4. Engaging Visual Formats

Display ads support rich media, such as animations, interactive elements, and videos, that drive user interaction. These formats tell stories more effectively than static images and help improve click-through and conversion rates.

5. Multi-Device Reach

Users move between desktops, tablets, and smartphones. Display ads follow them, maintaining consistent messaging across screens. Responsive formats ensure your ads look great on any device, expanding reach and reinforcing brand presence.

6. Performance Tracking and Optimization

You can monitor impressions, CTR, conversions, and more in real time. This data lets marketers refine targeting, adjust creative, and reallocate budget – making display ads highly trackable and optimizable for better ROI.

7. Scalability and Flexibility

Display campaigns can start small and grow with performance. You can easily adjust budget, audience size, and creative elements to suit changing goals or promotions. This adaptability makes display advertising ideal for businesses of all sizes and strategies.

Why Landing Pages Amplify Display Ad Success?

Landing pages boost display ad performance by providing a focused destination that aligns perfectly with the ad’s message. This consistency creates a smooth user journey and increases the chances of conversion – whether it’s a sign-up, purchase, or download.

Unlike homepages, landing pages remove distractions and spotlight a single call to action. With full control over the design and messaging, marketers can improve ad relevance, lower bounce rates, and turn more clicks into results.

5 Disadvantages of Display Ads

While display ads offer great benefits, they also come with challenges that can affect performance, such as low engagement, ad fatigue, the negative impact of ad blockers, or higher costs in specific industries. Here are key drawbacks to keep in mind:

1. Low Click-Through Rates (CTR)

Display ads often blend into web pages and get overlooked, leading to lower CTRs than search ads. Users are usually focused on content, not looking to click. But low CTR doesn’t mean failure – display ads still build awareness through repeated exposure.

Tip: Improve CTR with strong visuals, clear messaging, and precise targeting. Use A/B testing to find what works best.

2. Banner Blindness and Ad Fatigue

Another problem that challenges marketers who use display advertising is banner blindness. Many users automatically ignore banner-like elements. Overexposure to the same ads also leads to ad fatigue, reducing engagement and recall.

Tip: Refresh creatives regularly and use contextual targeting to show ads to more relevant audiences.

3. Negative Impact on User Experience

Display ads can sometimes be perceived as intrusive, negatively impacting user experience. Aggressive ad formats like pop-ups or autoplay videos can disrupt browsing and frustrate users. Overloading a page with ads can lead to clutter and negative brand perception.

Tip: Use clean, relevant formats and limit frequency to respect the user experience.

4. Limited Reach (Ad Blockers)

Ad-blocking tools prevent display ads from loading, shrinking your campaign’s visibility, especially on awareness-focused efforts.

Tip: Consider native ads or partnerships with publishers offering non-intrusive formats.

5. Higher Costs in Competitive Niches

In saturated markets, bidding wars raise costs. Small businesses may struggle to compete against big-budget advertisers.

Tip: Refine your targeting, test niche segments, and consider a multi-channel strategy to stay cost-effective.

3 Successful Examples of Display Ads in Digital Marketing

Great display ads combine strong visuals, smart placement, and precise targeting. Check out the following examples to see how various companies have effectively used display advertising to boost brand awareness, customer engagement, and sales.

1. Blinkist

Blinkist used a native ad disguised as a recommended article on MSN to promote its book summary service. Instead of a typical banner, the ad matched MSN’s layout, font, and style – making it look like a genuine news piece. This seamless design increased its chances of being noticed and clicked.

The point is that Blinkist has nothing to do with magazines, so this type of advertising is a clever, though potentially misleading, tactic that takes advantage of borrowed credibility. The ad directs users to a 404 page, where they are introduced to the service and directed to potentially engaging content. There is a question about ethics, but a well-thought-out strategy cannot be denied.

Because native ads blend in with content, they often outperform traditional banners in CTR. Blinkist’s example shows how design alignment and subtle messaging can increase engagement – even without aggressive ad copy.

2. OKRE Development

OKRE Development used a static banner ad as part of a real estate campaign. While simple in format, the ad stood out thanks to professional design, branded visuals, and a clean layout with a clear call to action.

Rather than rely on flashy effects, OKRE focused on consistency and relevance. Their ads appeared on lifestyle and news sites frequented by their ideal audience, ensuring strong contextual alignment.

This example shows that static banners – when visually sharp and well-placed – can be both cost-effective and impactful, especially when integrated into a larger marketing strategy.

3. Lufthansa

Lufthansa’s campaign used rich media ads with animation to promote travel offers. Each ad opened with immersive visuals of the destination, creating emotional appeal and sparking wanderlust. The animation told a brief visual story, making the ad more memorable than a static promo.

A strong call-to-action button encouraged bookings, while the format was reused across different campaigns with tailored visuals for each location. This consistency built brand awareness while promoting time-sensitive offers.

Lufthansa’s approach highlights how simple animation and storytelling can elevate a display ad—creating both emotional resonance and direct response.

How to Create a Display Ad?

To create a display ad, start by defining your campaign goal – whether it’s brand awareness, lead generation, or conversions. Choose an ad network like Google Display Network or Facebook Ads, and pick a format that matches your objective (e.g., banners, video, or native ads).

Design your ad with high-quality visuals, clear messaging, and a strong call-to-action (CTA). Make sure your creatives are optimized for multiple sizes and devices to maintain visibility across platforms.

Set precise targeting based on demographics, interests, and behavior. Include remarketing to re-engage past visitors. Then, choose your bidding model – CPC (cost-per-click) or CPM (cost-per-thousand-impressions) – and set your budget.

Finally, launch your campaign and monitor performance regularly to adjust as needed for better results.

How to Optimize Display Ads?

To optimize display ads, focus on creative performance, targeting accuracy, and data-driven adjustments. Use eye-catching visuals, concise copy, and a strong CTA to boost engagement.

Run A/B tests to compare variations in design, headlines, colors, and formats. This helps identify which elements drive better performance. Also, refine your audience by narrowing demographics, interests, and contextual placements. Incorporate remarketing to boost relevance.

Track key metrics like CTR, conversion rate, and viewability through platforms like Google Ads. Pause underperforming ads and reallocate budget to top performers. Make sure all creatives are responsive to ensure consistent delivery across devices.

What Are the Display Ad Sizes?

Display ads come in various sizes to fit placements across websites, apps, and social platforms. Here are the most effective formats, based on Google Display Network and industry standards:

1. Leaderboard (728×90 px)

A leaderboard is a wide, horizontal banner commonly placed at the top of a webpage for high visibility.

2. Medium Rectangle (300×250 px)

Medium rectangle is one of the most popular sizes, often placed within content or sidebars for strong engagement.

3. Large Rectangle (336×280 px)

The large rectangle has similar proportions to the medium rectangle but is larger, providing better visibility and higher CTR.

4. Skyscraper (160×600 px)

A skyscraper is a vertical ad positioned in sidebars, designed to remain visible while users scroll.

5. Wide Skyscraper (300×600 px)

A wide skyscraper takes up more space in sidebars, offering a larger area for brand messaging and visuals.

6. Large Mobile Banner (320×100 px)

A large mobile banner is optimized for mobile devices. It appears at the top or bottom of mobile web pages.

7. Square (250×250 px) & Small Square (200×200 px)

A square is a compact ad unit suitable for sidebars and smaller placements.

What Are the Display Ad Networks?

Display ad networks connect advertisers with publishers to deliver ads across websites, apps, and platforms. The largest is Google Display Network (GDN), reaching over 90% of internet users across 2+ million sites.

Other major networks include:

• Meta Audience Network, that extends Facebook and Instagram ads to third-party apps.
• Microsoft Audience Network, which places ads on Bing, MSN, and partner sites.
• Amazon DSP, which targets shoppers across Amazon-owned properties and affiliates.
• AdRoll, Taboola, and Outbrain, which specialize in programmatic and native advertising for broader content-based reach.

What Are Display Ads Best For?

Display ads are ideal for:

• Brand awareness, focused on visually introducing new products or reinforcing brand identity.
• Retargeting, enabling re-engaging users who visited your site but didn’t convert.
• Top-of-funnel marketing, driving traffic to landing pages, social media, or special offers.

With advanced targeting based on demographics, interests, and behavior, display ads help you reach the right audience and maximize campaign impact.

Where Do Display Ads Appear?

Display ads can appear across multiple channels depending on your targeting settings and ad network. Common placements include:

• Websites (news, blogs, and e-commerce sites via networks like GDN)
• Mobile apps (integrated into apps and games)
• Social media platforms (ads on Facebook, Instagram, LinkedIn, and X)
• Video platforms (pre-roll or mid-roll placements on YouTube and streaming services)
• Native placements (embedded within content feeds to match surrounding articles or recommendations)

This wide variety of placements makes display advertising versatile and scalable across platforms.

Are Display Ads Still Effective?

Yes, display ads are still effective, especially for brand awareness, retargeting, and audience engagement. While static banners may struggle with low CTRs and banner blindness, formats like rich media, video, and responsive ads drive stronger interaction.

Advancements in programmatic advertising and AI-driven targeting have improved ad relevance, helping brands reach the right users at the right time. With strong visuals and smart targeting, display ads continue to play a key role in modern digital marketing.

What Is the Best Tool for Display Ads?

One of the best tools for display ad creation is Abyssale – a platform designed to streamline the production of static and dynamic banner ads. It enables marketers and designers to generate automated, scalable, and on-brand creatives without manual design work.

With features like batch generation, AI-powered resizing, and customizable templates, Abyssale makes it easy to produce hundreds of ad variations in minutes. This ensures visual consistency and efficiency across campaigns, helping boost engagement and conversions.

But display ads are only part of the equation – landing pages are just as critical. For that, Landingi is a top choice. It simplifies landing page creation with AI landing page features, like Composer, which builds tailored, high-converting pages in minutes.

Landingi also supports A/B testing, so you can optimize not just your ads but the user experience after the click. With its EventTracker, you get actionable insights into how pages perform, making it easier to refine layout, messaging, and offers. Thanks to Landingi, paid campaign optimization goes effortlessly and enables you not only to attract a broader audience but also to turn this interest into real outcomes.

Together, tools like Abyssale and Landingi help you launch cohesive campaigns, attracting attention with great visuals and converting interest through optimized landing pages.

What Is the Average Cost of Display Ads?

The average cost per thousand impressions (CPM) for display ads ranges from $2 to $20 for banner ads, $20 to $50 for video ads, and $10 to $100 for native ads, as reported by Speed Marketing Agency.

On the Google Display Network (GDN), CPCs typically range from $0.50 to $3.00, with an average of $0.63 per click—significantly lower than search ads, which average $2.69 CPC due to higher intent.

Retargeting ads tend to cost more but convert better, with CPCs between $0.60 and $4.00.

Social media platforms like Facebook and Instagram offer display ads with CPMs averaging $5–$12, generally lower than GDN’s.

Industry also affects cost:

• Competitive sectors (like finance or tech) often have higher CPCs and CPMs
• Niche or local markets typically see lower costs

With the right targeting, bidding strategy, and ad quality, advertisers can optimize display ad spend and improve ROI.

How Do You Pay for Display Ads?

Display ads use different pricing models based on campaign goals:

• CPC (Cost Per Click), best for traffic and conversions
• CPM (Cost Per Thousand Impressions), ideal for brand awareness
• CPA (Cost Per Acquisition), used for performance-based campaigns

Payment is managed through platforms like Google Display Network, Meta Ads Manager, or programmatic platforms. You set your budget and bidding strategy, then monitor performance with analytics tools to optimize spend and return.

What Is the Difference Between Display Ads and Google Ads?

In short, Google Ads is an advertising platform, and display ads are one ad format available through that platform. Google Ads, a full advertising platform, lets you create and manage various ad types, including search, display, video, and shopping ads. Think of it as the control panel for your entire advertising strategy.

Display ads are just one type of ad you can run within Google Ads. These visual ads – images, videos, or animations – appear across websites, apps, and YouTube through the Google Display Network (GDN).

What Is the Difference Between Display Ads and Native Ads?

The key difference between display ads and native ads is appearance and user experience. Display ads are separate from content and rely on visuals, while native ads blend in for a more organic feel, leading to higher engagement rates.

Display ads are usually visually distinct ad units that stand out from the website’s content and are often placed in designated ad spaces, such as sidebars or headers. Native ads, on the other hand, are seamlessly integrated into the content of a website or platform, matching its look, feel, and format. They appear as sponsored articles, in-feed posts, or recommendation widgets, making them less intrusive and more engaging.

What Is the Difference Between Display Ads and Search Ads?

The main difference between display ads and search ads is user intent: search ads are intent-driven, and display ads build visually driven awareness.

Search ads appear when users actively search for something on Google. These are text-based and driven by high intent – ideal for conversions. Display ads appear on websites and apps, reaching users who aren’t actively searching but match your targeting criteria. They’re best for brand awareness, retargeting, and top-of-funnel engagement.

What Are the Limitations of Display Ads?

Display ads come with several limitations, including limited intent targeting, viewability challenges, and increasing privacy restrictions. While display ads allow targeting based on demographics, interests, and context, they often struggle to capture user intent. For example, someone searching for “hairdresser near me” shows clear intent – something display ads can’t directly address.

In contrast, a person browsing a cooking blog may see an ad for a hairdresser, but their focus is on recipes, not booking a service. This disconnect can result in lower click-through rates and wasted ad spend if targeting isn’t carefully refined. Display ads are generally better suited for building brand awareness than driving immediate conversions.

Another issue is viewability. Just because an ad is served doesn’t mean it’s actually seen. Ads placed below the fold, in sidebars, or less prominent areas are often ignored, and even visible ads can be scrolled past too quickly to make an impression.

To improve performance, advertisers must consider ad size, placement, and format, and rely on metrics like viewable impressions instead of total served impressions. Privacy regulations also pose a growing challenge.

Laws like GDPR and CCPA, along with the phase-out of third-party cookies, restrict how data is collected and used for ad targeting. This limits personalization and performance tracking, pushing advertisers to adopt privacy-compliant methods such as contextual targeting and first-party data strategies. As privacy standards evolve, advertisers must adapt to maintain both compliance and campaign effectiveness.

Use Landing Pages to Turn Display Traffic into Customers

Display ads play a crucial role in digital advertising, offering businesses a powerful way to increase brand awareness, engage audiences, and drive conversions through visually appealing formats. By leveraging advanced targeting options such as demographics, interests, and remarketing, you can reach the right audience at the right time. While low click-through rates and ad fatigue present challenges, optimizing ad creatives, placements, and bidding strategies enhance performance.

Behind the success of each advertising campaign stands a well-designed landing page focused on conversion. This serves as a bridge between user interest and real outcomes, which determine the campaign’s success. Try Landingi for free and craft relevant pages for your future display ad campaigns!