Are Online Display Ads Effective? How to Improve Their Performance

Online display advertising has been a core component of digital marketing for decades. But with ever-increasing competition for user attention, many advertisers wonder: Are display ads truly effective? The answer largely depends on how well they are optimized.

Display ads can be highly effective when used correctly and influence the consumer behavior towards buying your product or using your service. They offer broad reach, visual appeal, and precise targeting options. However, their effectiveness varies based on factors such as ad design, targeting, placement, and user intent.

Targeting Strategies

How to Improve Display Ad Effectiveness

Advantage
1. Refine Audience Targeting
  • Define the type of people that really are interested in your service or good.
  • Use targeting e.g. contextual targeting by picking the right websites to reach users with relevant interests.
Advantage
2. Optimize Ad Design
Advantage
3. Utilize A/B Testing
  • Test different ad creatives, messaging, and Call to actions.
  • Analyze performance metrics and optimize based on results.
Advantage
4. Choose the Right Ad Placements
  • Focus on relevant websites within AllMediaDesk Platform.
  • Also keep the reach of the websites in mind. If you go to niche you will not reach enough people to feel an effect of your campaign.
Advantage
5. Optimize for Mobile
  • Ensure ads are responsive and mobile-friendly.
  • Use shorter, attention-grabbing text for small screens.

Metrics for Display Ads: Click-Through Rate (CTR)

The effectiveness of display ads is often measured by CTR, which represents the percentage of users who click on an ad after seeing it. The CTR is often also used as the Key-Performance-Indicator (KPI) to measure the success of an online display campaign.

The CTR is calculated by Amount of Clicks / Amount of Impressions * 100.

Industry benchmarks for display ad CTRs vary, here are some general figures:

  • Average Display Ad CTR: 0.35% (varies by industry and platform)
  • Retargeting Ads CTR: 0.70% - 1.00% (higher than standard display ads)

While these numbers may seem low, display ads still contribute to brand awareness and overall marketing success when combined with other advertising strategies.

Another good KPI to evaluate the performance of your Display Ad could also be the Pay-per-Click (PPC). With PPC you not only look at the percentage of users that click on your ad but also put it in perspective to the costs you need to invest. The Pay-per-Click is calculated by Ad Spends for this campaign / Amount of Clicks.

So even if a website or campaign performs better at first glance because the CTR is higher, the results may look different when you look at the overall result (total clicks). And in the end, isn’t that what matters most? Maybe one campaign with a different group of websites has a worse CTR than another, but the price (CPM) is much lower. So in the end you might pay less per click even if the CTR is not that good. If you reallocate the budget from the campaign with the better CTR to the campaign with the better cost per click, you will end up with more clicks overall.

Best and Most Effective Banner Formats for Display Ads

Advantage
1. Leaderboard (728x90 pixels)
  • Placed at the top of web pages for high visibility.
  • Works well for brand awareness campaigns.
Advantage
2. Medium Rectangle (300x250 pixels)
  • One of the most popular ad sizes due to its versatility.
  • Performs well in both desktop and mobile environments.
Advantage
3. Large Rectangle (336x280 pixels)
  • Similar to the medium rectangle but slightly larger.
  • Generates better engagement on content-heavy sites.
Advantage
4. Skyscraper (160x600 pixels)
  • Tall, vertical ad format that fits well in sidebars.
  • Provides sustained exposure as users scroll.

Is online display advertising profitable?

If online display advertising is profitable for you or not heavily depends on your business. Besides choosing the right media channel and optimizing it, it also heavily comes down to how much margin you generate with your service or product as well as how good your offer compares to the competitors in your field. We can help you develop a strategy for your service get in touch with us.

Conclusion

Online display ads remain a valuable tool for digital marketing, especially when optimized correctly. While CTRs are lower compared to other ad types, display ads are essential for brand awareness and retargeting. By improving targeting, design, testing strategies, and selecting the best-performing ad formats, advertisers can significantly enhance the effectiveness of their display ad campaigns. Investing in high-quality creatives and strategic placements will yield better results and improve overall ROI.