What Is Digital Advertising and How Does It Work?

What is digital advertising? Digital advertising is an online marketing technique that allows advertisers to reach their target audience by placing ads on various websites.

Advertisers can choose from a variety of ad types and placement options, which include banner ads, video ads, text links or search engine-based keyword advertisements. This form of marketing has become the preferred method for many businesses because it offers more flexibility than traditional forms such as print media or television commercials.

How did digital advertising begin?

Advertising via the internet is not a new concept. In 1996, Hotmail became one of the first companies to use banners in their emails. This was well before most people even had email accounts! Early banner ads were simple and text-only, but they quickly evolved into more complex images with animations or sound effects that attempted to draw visitors away from their original destination.

In the early days, this was also known as “click fraud,” because it seemed like people were clicking on these ads for fun without any interest in actually visiting a website. But since then, click rates have decreased and advertisers are more aware of what they’re paying for. Digital advertising has become an important way for website owners to generate revenue.

Digital advertising is not limited just to traditional text banners, either!

What are the types of digital advertising

Today’s digital ads are much more advanced than their predecessors and offer a wide variety of types:

  • Text or image based advertisements on websites; these might include popups that appear when you scroll down the page or banner ads at the top of a website.
  • Text or image based advertisements on social media platforms; these might include sponsored posts, ads in between the newsfeed, and more.
  • Interactive digital advertising that allows users to engage with an advertisement by clicking on it for more information, playing games etc.
  • Mobile-based advertising displayed on smartphones when you use popular apps such as Facebook, Twitter or Instagram.
  • Display ads on websites that are not part of the traditional search engine results pages (SERP) such as blogs, podcasts and video game reviews.
  • Product display ads in online shopping sites like Amazon or eBay.
  • Video advertisements on social media platforms; these can be pre-recorded or live streaming.
  • Sponsored posts on blogs and other online publications.
  • Banner ads which can be in a variety of sizes; these are usually cropped into the top, bottom, left or right hand side of an article to advertise products that might interest readers.

Digital advertising vs Traditional Advertising

Digital advertising is a cost-effective way to deliver a marketing message. Digital advertisements can also be personalized with your target audience’s name or other demographics like their location–allowing for highly focused marketing campaigns that can be more difficult to achieve in traditional media.

Traditional advertising is a form of promotion that relies on mass communication via print, broadcast or other exhibitions such as billboards and posters. This type of marketing can take the shape of TV commercials, radio spots, magazine ads or newspaper ads–some may also include outdoor advertisements like roadside signs. Traditional advertising is not only expensive but it also takes up space in the form of newspapers, magazines, TV commercial spots, billboards, radio or posters.

Who was the first one to take advantage of digital marketing?

Raymond L. Blythe can be considered to be the father of digital marketing, though he may not be widely recognized as such. He was one of the first marketers to use TV and print in tandem with a “direct response” strategy that would direct viewers or readers to their website via an 800 number for immediate purchase (or some other action).

Blythe was also the first marketer to use SEM, or search engine marketing.

In 1976, while working for General Electric at their corporate headquarters in Schenectady, he experimented with targeting advertising on office equipment to GE employees so they would be more likely aware of its products and purchase them when it came time to upgrade.

GE had a “house list” of some 300,000 employees. This strategy was so successful that other early adopters of the practice followed suit and when people started to use computers at work (1979), Blythe moved his SEM efforts online.

The term “search engine marketing” is thought to come from this time period.

Examples of digital advertising formats

Digital ads can be found in a variety of formats:

  • The most common is the pre-roll ad on YouTube and it’s videos, which you see before an actual video starts playing–although these are more commonly called “YouTube Ads” or “pre-video ads.”
  • Google Adwords is the most popular type of digital advertising because it puts ads on search engine results pages and in sponsored links for keywords people might be searching for.
  • Mobile advertising includes banner ads while browsing websites on a phone or other mobile device.
  • Social media ads are the most common type of digital advertising, because they can be placed on practically any social media platform–Facebook, Twitter, Instagram and more.
  • Another type of digital display ad would be an ad wall. This is a wall with digital screens that can play ads. These are found in airports, metro stations and certain stores.

How do digital ads work?

Digital ads work by sending information from the ad to a user’s device and then tracking how many people have viewed that ad. This is done using cookies, which are small bits of data sent to users’ devices when they visit certain websites or use an app. These pieces of code can also track what you click on while browsing and this is why many ad networks use them to track an app’s performance.

Each time a cookie is activated, the advertiser pays for it and that cost depends on the type of advertising medium they are using. For example, if you buy ads space on Facebook or Instagram then your costs will be higher than buying banner ads because those require more attention from the user.

The performance of an ad is measured by how many clicks, likes or shares it gets and this will determine the number of people who have seen that specific advertisement. The more people see your ads, the higher chance you’ll get a conversion which is when someone actually makes a purchase from clicking on one of those digital ads.

What are conversion rates?

Conversion rates are the percentage of people who saw an advertisement and then actually purchased something from that ad. The higher conversion rate you have, the more effective your marketing campaign is, which leads to a successful business venture. Digital ads can be used for conversions because they allow advertisers to see how often their advertisements were clicked on by potential consumers. This is one of the many benefits that digital advertising offers.

There are two types of conversion rates: The first is a direct sale which takes place when someone buys something directly from an advertisement. The second type is called “conversions” and these take place after people visit your website or click on the ad link to find out more information about what you’re selling.

Why is digital advertising important?

Digital advertising is important because it has the potential to have a higher conversion rate than any other type of marketing campaign. For example, if you use digital ads and your conversion rate to get more customers is high, then this will lead to an effective market strategy that increases revenue for your business. Digital adverting can be used for conversions because they are more personal than traditional marketing and this is one of the main reasons why people find them so effective.

Advantages of digital advertising

This type of advertising has a higher click-through rate, which means that it will be less expensive for you to reach potential customers when compared with other types of ads such as print or television advertisements. It also allows you to target specific demographics.

Another advantage of digital advertising is that it can be measured more easily than other types of ad campaigns, which means you will have a better idea if your campaign was successful or not and this way you can adjust accordingly to get the desired results. It also allows for instantaneous feedback because people are able to see their ads immediately as opposed to waiting for a month to see if their ads were successful or not.

Digital advertising also allows you to change your campaigns as often as you need, so that it is relevant with new updates and changes in technology which means the chances of an ad being seen are higher than other types of media such as TV advertisements because TVs don’t have access to internet.

Digital advertising has many other advantages and as technology gets more advanced there will be even more benefits to digital advertising. Digital advertisers can also advertise through email, websites or social media platforms like Facebook. This gives the advertiser a chance to target their audience easier by targeting specific groups of people on those sites which is much harder with TV ads because they are on all the time and it’s not possible to target certain groups of people.

How does a business get started with digital advertising?

The process of getting started with digital advertising starts off by setting up your account with Google Adwords. You will then need to set a budget and create the ad that you want people on Facebook or Twitter to see when they search for certain keywords.

The next step is to find out which companies are doing well in your industry so you can target them specifically as opposed to just targeting everyone who goes onto social media.

Digital ads are also a great way to target your demographic without having to spend on marketing surveys or other more expensive methods of figuring out what people want and how they think. You can just reach them through their Facebook account, Twitter profile, etc., so you know that they’re interested in the subject matter at hand.

How do you become a digital marketer?

You can digital marketer by taking courses online from companies such as Udemy, Coursera or Skillshare. There are also a lot of tutorials and guides on the internet that you could study to learn more about digital marketing.

In order to make money in this field, it’s important not only know how to create an ad but understanding how to get clicks and conversions.

If you’re interested online courses that teach you how to become a digital marketer helping businesses with digital advertising, it’s important to know whether they’re legitimate. One digital marketing course is Modern Millionaires. Check out I Buy I Review’s comprehensive review of Modern Millionaires here.