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Invest in dig­i­tal adver­tis­ing, such as Google AdWords or Face­book Ads, to increase brand engage­ment and awareness.

Cre­ate a cost-per-click cam­paign that encour­ages peo­ple to click on a ban­ner of your prod­uct, and direct­ly go to your website.

Opti­mize your cam­paign so it only shows the ad when peo­ple have active­ly search for your prod­uct on a search engine.

What are the different types of digital advertising?

There are multiple types of advertising formats in digital marketing. These are some of the most common:

Search advertising

Search ads, also called search engine mar­ket­ing (SEM), appear in search engine results pages (SERPs). These are typ­i­cal­ly text ads that appear above or along­side organ­ic search results.

Display advertising

Dis­play ads are online ads that use text and visu­al ele­ments, such as an image or ani­ma­tion, and can appear on web­sites, apps and devices. They appear in or along­side the con­tent of a website.

Online video advertising

Online video ads are ads that use a video for­mat. Out-stream video ads appear in places sim­i­lar to dis­play ads: on web­sites, apps and devices. In-stream video ads appear before, dur­ing or after video content.

Streaming media advertising

Also known as over-the-top (OTT), these are a spe­cif­ic type of video ad that appears in stream­ing media con­tent deliv­ered over the inter­net with­out satel­lite or cable.

Audio advertising

In the con­text of dig­i­tal adver­tis­ing, audio ads are ads that play before, dur­ing or after online audio con­tent, such as stream­ing music or podcasts.

Social media advertising

Social media ads appear in social media plat­forms, such as Twit­ter or Facebook.

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How do digital ads work?

There is no one answer to the ques­tion: “How do dig­i­tal ads work?” With the wide vari­ety of dig­i­tal ad for­mats, you can find ads that are sim­ple to cre­ate and pub­lish, as well as ads that require more com­plex tools. There are also ad types for all lev­els of bud­get, with dif­fer­ent pric­ing mod­els and tar­get­ing methods.

Publishing digital ads

How dig­i­tal ads are pub­lished is deter­mined by the spe­cif­ic type of ad. With some ads, you can pur­chase adver­tis­ing inven­to­ry – the space for ads on a giv­en web­site or pub­lish­er – direct­ly from the pub­lish­er. For exam­ple, Spon­sored Brands and Spon­sored Prod­ucts are ads that appear only on Amazon.

Dig­i­tal ads can also be pur­chased pro­gram­mat­i­cal­ly. Pro­gram­mat­ic adver­tis­ing is the auto­mat­ed buy­ing and sell­ing of dig­i­tal adver­tis­ing inven­to­ry, includ­ing dis­play adver­tis­ing and video adver­tis­ing. You can use a demand-side plat­form (DSP), which is soft­ware that auto­mates pur­chas­ing and man­age­ment of dig­i­tal adver­tis­ing inven­to­ry from mul­ti­ple pub­lish­ers. A sup­ply-side plat­form or sell-side plat­form (SSP) is soft­ware used by pub­lish­ers to auto­mate the sale and man­age­ment of their adver­tis­ing inventory.

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Cost of digital advertising

The cost of dig­i­tal adver­tis­ing also varies by for­mat. A com­mon type of pric­ing is cost per click (CPC), or pay-per-click (PPC), which is a pric­ing mod­el where you pay each time some­one clicks your ad. Anoth­er type is cost per mile (CPM), which means cost-per-thou­sand-impres­sions. This is a pric­ing mod­el where you pay a cer­tain amount for 1,000 impres­sions, or times your ad appears.

You might also pay using oth­er mod­els, such as pay­ing each time your ad leads to a desired action (e.g. when some­one signs up for your email list or down­loads your eBook). Because dig­i­tal adver­tis­ing can be mea­sured in so many dif­fer­ent ways – how often an ad appears, is clicked, leads to a sale and more – pric­ing can be tai­lored to the intend­ed func­tion of the ad.

Targeting for digital ads

As men­tioned above, dig­i­tal adver­tis­ing is much more pre­cise than more tra­di­tion­al forms of adver­tis­ing. There are a vari­ety of ways that ads are matched with audi­ences, depend­ing on the type of ad. Search ads are tar­get­ed to spe­cif­ic search terms. Ads can also be matched based on shop­ping sig­nals, such as audi­ences who have pur­chased prod­ucts relat­ed to yours, or indi­cat­ed inter­est in the type of prod­uct you sell.

The result of this robust match­ing abil­i­ty is that audi­ences can see ads that are more like­ly to be rel­e­vant for them. Reach­ing rel­e­vant audi­ences boosts the suc­cess of your dig­i­tal ads, and keeps you from spend­ing your bud­get on serv­ing ads to audi­ences who would­n’t be inter­est­ed in your prod­uct or service.

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Digital advertising metrics

Dig­i­tal ads can be mea­sured in almost every aspect of per­for­mance. To mea­sure your dig­i­tal adver­tis­ing cam­paign, you might use these engage­ment metrics:

Clicks: How many times your ad is clicked
Impres­sions: How many times your ad appears
Click-through rate (CTR): The per­cent­age of impres­sions that result in a click
Reach: How many view­ers are shown your ad
Video com­ple­tion rate: How many times view­ers who are shown your video ad watch the entire ad
The fol­low­ing met­rics mea­sure the results of your campaign:

  • Con­ver­sion rate: How many times cus­tomers per­formed a desired action (click, pur­chase, sub­scrip­tion) after view­ing your ad
  • Ad-attrib­uted sales: Pur­chas­es that can be traced back to your ad (attri­bu­tion mod­els vary by ad type and service)
  • Return on ad spend (ROAS): How much rev­enue was gen­er­at­ed by your ad cam­paign in rela­tion to how much bud­get you spent
  • Return on invest­ment (ROI): How much net prof­it you earned from your ad cam­paign in rela­tion to how much bud­get you spent
  • Adver­tis­ing cost of sales (ACOS): The ratio of ad spend to ad-attrib­uted sales
  • New-to-brand sales: How many pur­chas­es were made by cus­tomers who had nev­er bought from you before

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