6 Types Of Digital Advertising: The Ultimate 2020 Guide To Digital Ads
While the term “digital advertising” has been in the online ecosystem for more than 25 years, it still can be mystifying to some business owners. It shouldn’t be though! Digital advertising is simply an online, targeted, integrated method for driving potential customers through the conversion tunnel to create sales.
So, what are the types of digital advertising? There are 6 types of digital ads that digital advertising companies rely on to create a rock solid campaign for your company.
What Is Digital Advertising & Why Is It Important?
In The Tipping Point journalist Malcolm Gladwell describes the moment a person decides to accept a new concept or take a specific action as the “the moment of critical mass, the threshold, the boiling point.” To reach what Gladwell describes, a company needs to create consumer touchpoints 7 times or more in order for the prospect to remember, opt-in, or buy what is being sold.
These concepts are actually quite old, effective frequency was first referenced in a 1880 psychological study on higher mental processes by Hermann Ebbinghaus, and The Rule of 7 was a marketing maxim developed by old Hollywood producers in the 1930s.
Despite their age, these concepts are still extremely relevant to digital ads and comprise a lot of information that will help digital advertising agencies create a comprehensive roadmap to successful strategy for your company.
So how do you use digital ads to get to those 7 touches with a consumer? Do you just throw up a graphic on your company Facebook page and hope people will find you? Nope! That’s so 2007. In the digital advertising ecosystem of 2020 there are 6 types of digital advertising that create touchpoints for your potential customers.
6 Types Of Digital Ads
Digital advertising is a powerful tool when used properly. Before we start to discuss what digital advertising is, we should define some commonly used terms by digital advertising agencies and marketers:
- Impression – When a digital ad is shown to a consumer.
- Click – When the consumer clicks the digital ad and enters the conversion funnel.
- Action – When the consumer completes the desired action of the digital ad (sale, opt-in for email, register, download, etc.)
- Conversion Rate – The percentage of consumers who go through the conversion funnel and complete an action.
- Cost-per-mille (CPM) – The cost of having a digital ad shown to a consumer.
- Click-thru-rate (CTR) – The percentage of consumers who clicked on a digital ad and reached an online property.
- Cost-per-click (CPC) – The amount of money spent to get a click on an ad.
- Cost-per-action (CPA) – The amount of money which is required to make a conversion from a digital advertisement.
- Pay-per-click (PPC) – A method of using Search Engine Marketing (SEM) to advertise your company and products.
In this guide, we will explore the ins-and-outs of the 6 types of digital advertising to help you determine which digital ads will work best for your company. Some of these concepts are easy to grasp and execute on your own, and some are more technical and will require learning or professional assistance. Let’s take a look at each one of these digital ad methods in depth and explore what types of digital advertising work, what ROI they will provide, how much they can cost, and how they overlap with other types of digital ads.
1. Digital Display Advertising
Digital display advertising is the most straightforward type of digital ads on our list. In short, there are only a few types of digital display advertising you can create. Those types of display ads are: Static, flash, and video. Most display ads are composed of an image with text, including a call to action. The most used types of digital display advertising are formatted according to very simple rules. Examples of digital ads used as collateral in display ads are the simple square ad, the digital banner ad, or the 15-second digital video ad.
Digital display advertising appears everywhere, these ads are ubiquitous. A digital display ad can show up as a pop-up ad, landing page, website banner, social media ad, or in-app banners. However, there are some pros and cons to relying on this strategy:
- PRO: Digital display advertising creatives can be very affordable and can be repurposed on multiple platforms.
- PRO: You can directly link to a sales page or app redirect in a digital display ad.
- PRO: Most digital display advertising is run by digital advertising platforms that support programmatic ad purchasing, such as the Google Display Network (GDN,) Adobe Marketing Cloud, and Double Click.
- PRO: Because programmatic ad tools automatically bid on digital outlets with the lowest cost to place your ad on, the cost per click (CPC) for digital display advertising is considerably lower than other methods, with an industry average of $.69 per click.
- CON: Because the format of display ads are meant to be short, you cannot deploy more effective media collateral (like a 30-60 second digital video ad or interactive digital ads) as you are restricted in format style and size.
- CON: You cannot target a specific audience in a microgranular way, display ads are targeted in a very broad nature to reach many people.
- CON: Because display ads are typically run through programmatic ad tools, there is very limited control over where an ad is placed on the Internet. The ad might show up on websites or in apps you’d prefer it not to.
- CON: While the CPC is low in display ads, the CPA (or, cost-per-action) can run extremely high, with price tags ranging from $5 per sale to $60 per sale.
The main objective of display advertising is to deliver a general message for your company or brand and to drive people to click through to learn more about your product or service. While many think digital display is dated and ineffective, there is actually still a lot to be gained from producing these ads in 2020. Take the GDN, for example, Google’s algorithms allow them to reach 90% of all web users. As of April 2020, there are 4.57 billion active Internet users, globally. Google, alone, has access to 4.11 billion of them!
This makes Google one of, (if not the,) the strongest digital advertising platforms in the world.
Not to mention, the other programmatic digital advertising services have their wiley tendrils into the areas Google may not be able to penetrate.
While many executives will tell you the concept of “buck shot strategy” is ill advised and you should focus solely on targeted (or, “bullseye”) marketing, consider this: With the relatively low cost of programmatic display ad creatives and CPC, and the absolute pervasiveness of the Google algorithm, why would you not invest in this strategy?
Still not convinced? Consider these statistics:
- Pay-per-click ad campaigns (PPC) using display collateral create 80% more brand awareness than other types of creatives
- People who click on an ad to learn more about a brand/product are 50% more likely to make a purchase or download in the following 30-days
While the CPA might be cost prohibitive for direct sales purposes, if you are looking to make an initial impression on consumers or to introduce your audience to a product or service, digital display advertising is a great place to start.
Let’s chat about how ComboApp can assist you in making creatives and deploying an effective display campaign.
2. Social Media
Social media is not just restricted to Facebook, Instagram, YouTube, and Twitter these days. There are many other channels that cater to specific demographics of users. It is entirely possible that you have intersected with digital ad examples on your own SM accounts and not even known they were advertising.
The saying in 2014 was “there’s an app for that.” In 2020 it’s been amended to “there’s a SM platform for that.” Social media advertising can be hypertargeted and microgranular in it’s effectiveness. If you have enough insight, trend awareness, and budget you can reach any audience you want.
Of all the types of digital campaigns, social media is the area where you can flex your creative muscles to create impactful and fun content. You can use veritably any type of collateral on social media. Whether you want to repurpose digital banner ads from a programmatic digital advertising campaign, or create a masterpiece video, or even code an interactive immersive ad experience, you can do it.
What is important to remember is there are two types of social media strategies: Paid and organic.
Paid Social Media Advertising:
Advertising on Facebook
The bald truth is Facebook is still the monolithic platform to advertise on. It owns a “family” of products that include Instagram, Messenger, WhatsApp, Oculus VR, and Giphy, among 84 smaller apps/services they have rolled up into their company over the years. (Anyone remembers Jibbigo, Vidpressio, or Beluga? No, we don’t either.)
Statistics show in 2019 there were an estimated 2.95 billion active social media users per month globally. This number is expected to grow to 3.43 billion active users by 2023.
Over a third of the world’s population logs into and spends at least 10-12 minutes per day engaging with general social media content.
The Facebook Family claims across all of their platforms they hold a share of 6.314 billion active users per month!
Of course you have to correct for cross platform users, but that still is roughly 81% of the world’s population logging into, and spending an average of 10-12 minutes per day, consuming Facebook specific social media content. This represents billions of intersections your products can make with a potential customer’s eyeballs. The digital advertising market size on Facebook is huge!
Considering these impressive statistics, the default of most novice social media advertisers is to rely heavily on the Facebook Family for their total campaign needs.
This is a mistake. While there is a time and a place to run cross-platform ads on Facebook, the cost of running Facebook centered campaigns can add up.
Here are some statistics to consider:
- The average price for 1000 impressions is $7.19 cents
- The CTR from impressions on Facebook is 2%
- The average CPC is $1.72 across all industries
- Per 1000 impressions, you will get 20 clicks on your ad
- An ad can have anywhere from a 26% to 70% bounce rate on your CTR
- 9% of people who click on a Facebook ad will convert into sales
- This means you will have 1.8 CPAs per 1000 CTR
- Most campaigns need a minimum of 10,000 clicks to convert to meaningful sales numbers
- In order for your content to stay sticky in the platform feed, your campaign needs 50 conversions in the first 7 days of the campaign, otherwise it will be suppressed by the Facebook algorithm
- To close 180 sales, you will need to allocate an approximate ad buy budget of $17,200
The good news is when you create a Facebook Family ad set, you can share your ad between platforms. On Facebook you can cross advertise on Instagram or IGTV. On Messenger you can cross advertise on WhatsApp. This is particularly valuable for sharing digital video ads.
Here is nice infographic to summarize Facebook advertising in 2020
Facebook Family advertisements need to be impactful and used sparingly. At ComboApp, we prefer to use these ad spends for product launches, significant product changes, or campaigns targeting a specific audience of users only found in the Facebook Family. Further, we recommend a minimum ad budget of $12,000 to even begin with modest returns from a Facebook ad.
Do you need help finding your audience? Let ComboApp perform a targeting audit and see who’s listening to what you have to say.
A better way to approach paid social media ad strategy
Despite Facebook being the industry leader in paid social ads, there are still many other channels you can use to advertise your product. Platforms such as TikTok, Snapchat, Pinterest, Reddit, LinkedIn, and Twitter have large market shares of specific demographics who you can easily microtarget with compelling, relevant ad content.
The CPA on many of these niche sites is substantially lower than the averages in the Facebook Family. Instead of sinking all your budget into Facebook, spread your dollars around to a few of these demographic specific platforms. If you know your audience, you’ll see great conversion results.
Organic Social Media Advertising:
A smarter, more cost effective day-to-day strategy is to find the niche social media platforms who cater to your specific audience and plug your content dollars into advertising to potential customers who will end up becoming brand ambassadors for your product.
An organic, small brand ambassador program costs between $5,000 and $15,000 to execute. Which makes organic social media smart digital advertising for small business.
A brand ambassador is a customer who loves your product or service and will evangelize it to their friends, family, and social network without being paid to do so. They will create a community around your product which will spread awareness and convert new customers.
Brand ambassadors are invaluable to organic social media strategy, but you have to work hard to convince them to opt-in. Still, it makes sense to invest in organic brand ambassadors, as their impact is high and costs lower than traditional social ad strategies.
How do you find brand ambassadors? The key here is knowing your audience and finding the specific social media habitat they engage in. It also helps to understand which platforms are birthing the most organic viral content for your demographic.
For example, TikTok is heavily populated by teens and their (often corny) parents. While their market share is much smaller than social properties like Facebook, TikTok produces far more viral content per month than Facebook does. TikTok’s content is then shared by users to other social media platforms.
This is true of a multitude of other platforms. LinkedIn is the best platform to court b2b brand ambassadors. Twitter is the best platform to find customers who care about social and political issues. Pinterest is where you find people interested in fashion, home, and parenting. Twitch is where you find gamers. Instagram is where you find people with aspirational lifestyle interests and parenting interests. Reddit is a savage wasteland of people complaining about pop culture and politics, find your appropriate /r and tool your ad carefully if you want to live.
The thing to remember about organic social media advertising is it is all about authenticity and reputation. It takes time and patience to cultivate an organic audience. You may have to go outside your comfort zone to create really creative, compelling content that differs from your “business voice” to engage users. And, when you find a piece of content that sticks, that is the time to use organic social media tools to amplify the reach of the content to a targeted audience.
Promoted content on average costs less than straight up advertising and is shared more between platforms by users. Think of the times you have retweeted, shared, or reposted a piece of content. You have either found that content based on people you follow sharing the content with you, or a boosted post targeting a demographic you belong to.
Boosted posts will have a CPS (cost per share) between $.20 and $5.00, but the goal isn’t necessarily conversion, it’s impressions and shares. Given how little time it takes to press “retweet” or “share,” users are far more likely to do so than click on a paid advertisement. Plus, organic content is considered more authentic than produced advertisements.
The beauty of a boosted post is that while it is a paid exposure, it appears organic in your social media feed. This makes it an important part of growing your organic audience. A larger audience means better reputation. And, eventually, that will translate into sales and brand ambassadors.
The most valuable kind of organic content has to be UGC (user-generated content) digital video ads. Not only does it tend to stick, but it cements your authenticity as a personalized advertiser. UGC was the reason why companies such as Yelp and GoPro were able to penetrate such huge markets upon their launches. They leveraged the power of brand ambassadors to create conversions and solid customer bases.
There are some important aspects of organic social media advertising that companies need to pay attention to in order for their strategy to pay off:
- Practice social listening. Do your reconnaissance work and dig into what topics are trending with your demographics and tool your content to speak to those issues.
- Whenever possible, use humor. Nobody forgets content that makes them laugh. Want some examples of effective humor used in organic social media ads? Check out how brands are using Twitter and TikTok. (Pay close attention to The Washington Post’s TikTok channel. We stan Dave.)
- Be authentic. 2020 has been rife with crises. It behooves brands to speak authentically about the impact of social issues on their staff and the community. Speak to your company’s values. For digital ad examples of how authenticity drives brand loyalty, check out the Penzeys Spice social media strategy. This is a beautiful example of how a little company leveraged the power of organic social media to build massive brand loyalty across multiple demographics and created an unparalleled sales increase.
- Keep it simple. Take the time to work with your content creators to boil down your brand message into simple, easily understood, digestible slogans. So many of the legendary ad campaigns of the 20th century used this concept to create slogans that are immediately brand recognizable without ever saying the company name. Examples: “Got Milk?” “Where’s the Beef?” “Can you hear me now?” “The quicker picker-upper.” “Just do it!” “Melts in your mouth, not in your hands.” (We could go on, but you get the idea.)
The investment you make in having an organic content based ad strategy will pay off in the long run, but don’t expect to see immediate results. It takes time to build reputation and community in an organic fashion. When investing in this strategy, make sure you are in it for the long haul.
3. Native Digital Advertising
Native advertising is the sister of display advertising. There are two important differences:
- Native digital advertising is extremely targeted to audiences and is based on individual audience data points. They are packaged as “recommendations” based on your likes, previous purchases, other ads you have clicked on, liked/shared, and what content you organically post.
- Native ads appear seamlessly in whatever environment you are using online. You can see native ads on all social media, Google, Amazon, in your email, and other online locations. It’s like they are meant to be there, because they are.
Basically, native digital advertising is everywhere. It is controversial. The controversy surrounds what this method of ad serve has to do with personal content storage. Big companies (like Facebook, Google, Amazon) have access to enormous amounts of data points that you, as an individual, have willingly given to them by using their platforms.
And, no – Big Data isn’t listening to your conversations via the microphone on your phone, computer, or other device to target and collect data points from you. You give away enough information on a daily basis without companies needing to do that to serve you native digital advertising.
- Behavior – This refers to your commercial online actions – including what kinds of apps you download, where you make purchases from, what you purchase, the games you play, the platforms you post on, and other related data points.
- Interests – This data is specifically tailored to you and is based on your likes, shares, job, hobbies, groups you belong to, where you went to school, events you have expressed interest in or attended, and other data points that express what you like.
- Demographic – This is straightforward as data can be. Demographic refers to age, sex, location, relationship status, political affiliation, education level, hometown, parental status, and more.
When used properly, native ads can make a strong impact. It is a way to reach individual consumers based on their specific interests multiple times across online platforms. This quickly gets you to 7 touchpoints to convert a sale.
The next time you open Google, Gmail, Amazon, or Facebook take a look around. You’ll see native digital ads examples everywhere.
Learn more about how ComboApp can help you create personalized, data-driven content.
Native ads are the most unobtrusive type of digital ad strategy you can engage in. Ads usually show up as suggestions – it relies on the “because you liked/searched for X, you will also like/purchase Y” concept. On Google and Amazon, native ads will appear in your top 3 search results labeled as ads or promoted or suggested products based on what you search for. In Gmail, native ads show up in a folder prominently displayed in your primary inbox labeled “Promotions.”
When running a native ad campaign it is essential to A/B test and information test your campaign to optimize the returns. The cycle of optimization testing includes testing concept, format, creatives, font, text size, video length, and other performance indicators that can be used to make your ad perform its best. It also includes analyzing conversions so that you can gain insight into what products and services are converting the best so that you can use those results across other platforms and advertising methods.
However, much like Facebook, you get what you pay for. In order to get the best results from a native advertising campaign you need to commit a dedicated budget to running high volumes of ads.
4. Search (PPC/SEO)
Everyone in business understands the basics of search advertising. It is programmatic. It is Google Ads. It is keyword oriented.
But, in truth, it is a bit more complex than just that.
Why are keywords important to all types of digital strategy?
Keyword research doesn’t just inform PPC and SEO strategy. According to Neil Patel, keyword research is “the foundation of all these other digital marketing and [advertising] practices.” Meaning that huge importance should be put into performing keyword research in order to inform all your digital practices. And, you should refresh your keywords often, as search trends change with the wind.
As it pertains to this type of digital advertising, keywords are essential for targeting your audience. The goal of any search campaign is to propel your advertisement or company onto the first page of Google. Because most consumers do not look past the first page of search results, it is critical to use the correct keywords to get to either the top placed PPC advertisement or the last SEO placement on that front page.
The best way to research keywords for beginners is simply to go to Google and enter a topic and see what the top 5 predictive text results are. This will give you a solid idea of what terms people who are searching for similar products use.
For example, if you are a bath and body product company who is about to launch a new body butter, you might search “body butter” and then use the top 5 results of predictive text to create your keyword set.
How do keywords translate in digital search ads?
There are two basic types of search ads: Pay-per-click (PPС) and search engine optimization (SEO.)
PPC advertising for search is pretty easy to understand. Using Google Ads you will create an ad set of clickable headlines and meta text descriptions to take the user directly to what they searched for on your company page. You will then decide how much you are willing to pay-per-click (the average is between $1 and $2,) then buy your keywords. The cost of keywords is variable, with some being extremely inexpensive, and others -in crowded, competitive business verticals – being extremely costly. What you have to decide is if you buy more keywords that perform slower per volume, or if you buy one or two important keywords that have huge volumes of search history attached to them.
Keep in mind that the goal is to get your advertisement to the top spot on the Google search page for your product. The first 3-5 results on any Google search are Google Ads or Google Shopping Ads. So the competition is fierce.
Which would you choose? Get in touch with ComboApp and let’s talk about keyword strategy.
SEO is different from PPC in that you are deploying keyword strategy within your website or within content published to your website to impact your organic search position. Like organic social media advertising, this is a slow burn process. It can take months of testing and tooling to find the right combination of keywords to slot your website or product into the number one spot on the Google homepage.
ComboApp recently published a comprehensive SEO Best Practices study that gives you a step-by-step checklist to creating a solid search strategy for your website, including ad strategy. Check it out!
5. Video Ads
There are so many reasons why video is considered the “king of content.” Videos can explain anything and build an emotional connection with viewers, sometimes in as little as 15 seconds. Most importantly to the digital advertiser, videos excel at increasing traffic, boosting conversions, and sales.
The cost of video ads is quite manageable and not at all out of reach for small business advertisers. At ComboApp, we are able to provide high quality videos for standard ad use between $1,200 and $2,900. (Ads are priced individually and may exceed those prices if they include playable or animated content.)
Social media platforms love video. They are coded to push video content into the feed so that it can be seen by a wider audience than regular static content. Having high quality, professionally shot, and edited video is essential to any digital ad campaign.
Smart Insights reports that users will spend 88% more time on a website with video than one without. They also report that in 2020 long-form video (15 minutes or more) will convert better than shorter videos due to personalization and authenticity. This has led many brands to create IGTV “scripted series” advertisements with characters and plot twists and all the other conventions you would find in a television show.
Do you want to be an innovator in the 360 video space? ComboApp can connect you with our animation and VR teams to make your reality virtual.
Videos can be used as a stand alone ads across multiple platforms -or- you can deploy your video as an advertisement attached to the top of a different, somewhat related video. This is known as a “pre-roll ad.”
It is true, 65% of consumers skip the pre-roll ads on videos they want to watch, and they do it fast. However, this digital video ad strategy can still convert for smart advertisers.
CNBC reported that there are strategies that can boost the conversion numbers on digital video ad pre-roll collateral. They include good storytelling, forging an emotional connection to the viewer, and keeping your pre-roll short and to the point. One of the most impressive hacks to converting pre-roll ads we have seen is placing clickable, branded assets close to the Skip Ad button. Very tricky, yet smart and effective.
Everyone can think of an exceptional, engaging video advertisement that they have watched. Video is king and using it creatively will engage your customers and benefit your bottom line in ways your company should explore.
6. Email Advertising
Everyone is familiar with the concept of email ad blasts. Since 1978, companies have been using these types of digital advertising as a channel of communication to directly connect with their customer base. In the last 42 years, email ads have grown up and become a nuanced, integral method of obtaining and retaining customers. According to the team at Optinmonster, there are 13 types of essential ads that companies need to send to their email lists.
Developing your outbound email list is a daunting task. When starting from scratch there are some best practices used to acquire more targets to your list. In fact, you can run an ad campaign using the methodology described in this guide just to build a solid email list. From creating display and native ads -to- appealing to your current customer base -to opt-in via social media or your website, there are many ad centric strategies that can help you build an effective list that will meet your email KPIs.
Buying email lists is considered a no-no for a multitude of reasons. Cold blasting random targets that another person has chosen to fit into your intended demographic is costly and provides a low ROI. In purchased lists, the addresses can be stale, inactive, or abandoned. If the source you purchased the list from was less than scrupulous, you run a risk of having targets categorize your emails as spam, which will affect your ability to continue to use email to reach customers.
According to MailChimp, an average bounce rate is 2% of your email targets. If your bounce exceeds that, you need to reevaluate both your content and list.
The most important things to remember when creating email content for distribution to your list are:
- Subject lines are important! You need to write a subject line that clearly communicates value straight off the bat in order to get your targets to click into your email.
- You need to mix up your message. You cannot hammer your audience with sales pitch after sales pitch. Smart email advertisers send a variety of email types. Using email content like surveys, offers, or customer requests will ensure that your targets stay engaged with your email process. (And, the Welcome! email is an absolute essential for all new subscribers.)
- The key to conversions with email is a strong CTA. To really make the most of your email campaigns, you need to create a compelling call-to-action that you can feature multiple times throughout your content. The old adage is true, if you don’t ask for what you want, you won’t get it.
Direct-to-consumer email ads aren’t the only types of digital advertising savvy companies can use to leverage email to obtain more exposure and conversions. As we mentioned in our native ads section, you can use programmatic ad buys to place your email content into a targeted audience’s inbox or into a native subject environment. (For instance, your email newsletter about body butter will be placed onto platforms that bath and body product enthusiasts engage in.) Native email ads are extremely high performing, one of the most lucrative constituent bases advertisers can tap into.
Notably, email marketing is the essential type of digital advertising for small business that ComboApp recommends as a first strategy to local and ecommerce businesses.
Do you need to revamp your email strategy? ComboApp’s email experts are happy to help you build a new list, create a CTA, or program a native email ad to suit your needs.
How Do We Choose What Digital Ad Strategy To Purchase?
As digital advertising experts, at ComboApp, we ask clients to consider three questions before we advise them on what ad strategies to engage in:
- What are your campaign goals?
- How quickly do you expect significant ROI?
- What is your budget?
If your goals don’t match your ROI and budget, it’s a no-go. Likewise, if your ROI doesn’t match your strategy, you’re sunk before you’ve begun. And, if your budget doesn’t align with your preferred methodology, you’ll only be frustrated with the limited results you see from your campaign.
In most cases, a custom mixture of digital ad strategies is what we recommend. For instance, there are high value results that come from overlapping organic and paid media ad strategy. And, direct and customized customer contact is always recommended.
In conclusion, there are many many ways that digital advertising can help you grow your business, engage customers, and convert sales. The ComboApp team looks forward to helping you optimize and execute your strategy.