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How Do Digital Ads Work and Why are They Important?

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Digital advertising is one of the most important and effective ways to reach consumers today. It’s a way to connect with potential customers through their phones, laptops, or other devices. But how does digital ads work, and why is it so important?

What are Digital Ads?

Digital ads are basically commercials that you see online. They can be in the form of videos, photos, or text. Companies use digital ads to promote their products or services to potential customers.

The worldwide online advertising market was valued at $398 billion in 2016, accounting for roughly half of all global ad spend. However, the majority of us have no idea how these advertisements function—or how they’ve gotten so good at blending into the digital world.

10 Advantages of Using Digital Advertising

There are a number of reasons digital advertising is so important. Here are some of the main advantages:

  1. Reach: Digital ads can reach a large number of people very quickly. This makes them a great way to promote products or services to a large audience.
  2. Personalization: Digital ads can be customized to target specific audiences. This means that companies can target ads to specific demographics, interests, or even locations.
  3. Cost-effective: Digital ads are often more cost-effective than traditional advertising methods. They can reach a large number of people at a relatively low cost.
  4. Targeting: Digital ads can be targeted to specific audiences based on their interests, demographics, or locations. This makes them more effective than traditional advertising methods.
  5. Engaging: Digital ads are often visual-centric. This means that you can capture a target customer’s attention using graphics or videos, which can result in a better user experience.
  6. Measurable: Digital ads can be tracked and measured. This means that companies can monitor the performance of their ads and see how well they are performing.
  7. Flexible: Digital ads can be adapted very easily to target specific audiences or demographics. This ensures that your ideal customers, based on the parameters you set, are likely to see your ads.
  8. Efficient: Digital ads can be delivered quickly and efficiently to a large number of people. This makes them a more efficient way to reach potential customers.
  9. Versatile: Digital ads can be used in various ways, including online videos, social media posts, and website banners.
  10. Future-proof: Digital ads are likely to be the future of advertising. That’s because we are seeing artificial intelligence transforming how we see advertisements, such as retargeting ads.

4 Types of Digital Ads

Now that you know what digital advertising is and how it can help your business, here are four types of ads that you can use to promote your brand:

Display Ads

Display ads are the most common type of digital ad. They are typically images or videos that are placed on websites or in apps. Banner advertisements may include images, video, audio, or text components that entice people to click the display ad and go to the URL. Through a display advertising network, such as the Google Display Network, banner advertisements are frequently delivered to ad publishing websites.

Digital Ads - Display Ads - ArisAlex

Paid Search Ads

Paid search ads are the text-based ads that you see at the top of Google search results. These ads are paid for by the advertiser and appear when someone searches using their target keyword.

A search ad is a text advertisement that includes a headline, description, and link to the target URL.

Digital Ads - PPC Ads - ArisAlex

Social Ads

Social ads are ads that appear on social media feeds. They are typically images or videos that are targeted to specific demographics or interests. Social media platforms like Facebook and Twitter allow businesses to target their ads to specific audiences based on their interests, demographics, and locations.

Display Ads - Social Media Ads - ArisAlex

Retargeting Ads

Retargeting ads are ads that are shown to people who have visited your website or app before. Google Analytics can be used to determine the success of retargeting campaigns by analyzing the number of visitors who have previously viewed your website. Cookies are used to identify individuals who have previously visited your site and deliver advertising tailored to their interests in order to entice them to finish the transaction.

Display Ads - Retargeting Ads - ArisAlex

What are the Key Metrics of Digital Advertising?

The key metrics of digital advertising are:

  1. Impressions: Impressions are the number of times an ad is shown to a user. This metric is usually used to measure the reach of an ad campaign.
  2. Clicks: Clicks are the number of times a user clicks on an ad. This metric is used to measure the click-through rate (CTR) of an ad campaign.
  3. Conversions: Conversions are the number of times a user completes a desired action, such as making a purchase or filling out a form.
  4. Cost per conversion: Cost per conversion is the cost of each conversion generated by an ad campaign. This metric is used to measure the effectiveness of an ad campaign and its ROI.
  5. Cost per click: Cost per click is the cost of each click on an ad.
  6. Cost per impression: Cost per impression is the cost of each impression of an ad.
  7. Bounce rate: Bounce rate is the percentage of website visitors who leave your website after viewing only one page. This metric can be used to measure the effectiveness of your website’s design and layout.
  8. Time on site: Time on site is the average amount of time a website visitor spends on your website. This metric can be used to measure the engagement of your website’s visitors.

5 Digital Ads Best Practices

To run an effective digital advertising campaign, it is recommended that you follow these best practices:
 
  1. Determine your objectives: The first step in creating a successful digital advertising campaign is to determine your objectives. What are you trying to achieve with your campaign? Are you trying to generate leads, increase brand awareness, or drive sales? Once you know what you’re trying to achieve, you can create targeted ads that will achieve those goals.
  2. Research your target audience: It’s important to know who your target audience is before you launch a digital advertising campaign. Knowing your target audience’s demographics (age, gender, income level, etc.), interests, and behavior will help you create ads that are more likely to appeal to them.
  3. Choose the right channels: Not all social media platforms are the same. Some platforms are better suited for certain types of ads than others. It’s important to choose the right channels to reach your target audience.
  4. Use effective targeting tools: Digital advertising platforms offer a variety of targeting tools that allow you to target your ads to specific audiences. These tools include demographic targeting, interest targeting, and retargeting.
  5. Track your results: It’s important to track the results of your digital advertising campaign so you can determine its effectiveness. Use analytics tools to track impressions, clicks, conversions, cost per conversion, cost per click, and cost per impression.

Digital advertising is a powerful tool that can be used to achieve a variety of objectives. By following the best practices listed above, you can create a successful digital advertising campaign that will reach your target audience and achieve your desired results!