What You Need To Know About Display Ads

If you want to sell a product fast and make profits from it, what is the first method you think of? Is it advertising? Yes, advertising is becoming increasingly popular these days. Advertising is not dedicated to only professional advertisers anymore, it is now a tool for everyone. One of the most popular types of advertising is display ads that, like its name, displays what you want to introduce to thousands of people in a few clicks.

Why is display ads an easy approach?

Display ads work on almost all types of digital platforms (website, application,…), bringing enormous amounts of profit for its providers. This is why they often offer you a quick way to open an account and start your first ad right away. What you have to do is to prepare a credit card, open an account, and learn their basic advertising courses.

Does it come with a cost and how much?

Obviously, advertising providers want profits, they do not offer it for free. For display ads, they will charge you a fee for your ad to reach the users on their platforms. But most of the time, no one knows exactly how much to be paid if they want to reach a specific number of people, it all depends on their system. However, we can use the metric called CPM to estimate the budget as mentioned after.

What are the basic key metrics when running display ads?

Impression & CPM

An ad impression is counted whenever an ad is displayed within an app. Ad impressions vs clicks should not be confused with each other. In other words, impressions in digital marketing tells advertisers and developers how many times an ad was viewed by users. The ad impressions definition is not contingent on how many times the ad was clicked.

Cost per thousand (CPM), also called cost per mille, is a marketing term used to denote the price of 1,000 advertisement impressions on one web page. If a website publisher charges $2.00 CPM, that means an advertiser must pay $2.00 for every 1,000 impressions of its ad. The “M” in CPM represents the word “mille,” which is Latin for “thousands.”

Reach & frequency

Reach refers to the total number of people who have seen your ad or content. If 100 total people have seen your ad, that means your ad’s reach is 100. Impressions refer to the number of times your ad or content has been displayed on a screen.

Ad Frequency is the average number of times your ad is displayed to a unique user. It is calculated by dividing your ad’s impressions by its reach. This metric helps understand how frequently your ad is viewed by your target audience on average.

Click, CTR & CPC

When a user clicks on your ad, it will be counted as a click. The more clicks you gain within a fixed amount of budget, the more effective your ad is.

Click-through rate (CTR) is the ratio of users who click on a specific link to the number of total users who view a page, email, or advertisement. It is commonly used to measure the success of an online advertising campaign for a particular website as well as the effectiveness of email campaigns.

CPC is the most confusing term in digital advertising because in pay-per-click advertising you actually pay for each click while in display advertising you pay for impressions. To better clarify, if you want to calculate the average CPC in a display campaign, you can use this formula: Total cost/total click.

Knowing these basics can help you be more confident in running your first display ad campaign. However, knowing them is not enough, to make it more effective, you better spend more time and money to experience yourself. There are some additional metrics available in the next article when you’re ready.