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What Is Digital Advertising?

The Most Direct Path To Customers In The Internet Era

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In an ideal world, marketers would be able to directly reach customers who are interested in their products or services, delivering the perfect message at the precise moment when they are ready to make a purchase. In reality, the digital world is teeming with potential customers scattered across various stages of the buying cycle.

Fortunately, the digital age has provided marketers with powerful tools and strategies to navigate this complex landscape. One of the most direct tools available is digital advertising, and while it doesn’t quite give marketers an ideal world, it does enable them to target specific demographics, track user behavior, and adjust strategies in real-time based on measurable data.

In this post, we’ll cover the essentials of digital advertising, its common types and key metrics, and review a straightforward approach to launching digital ad campaigns.

Learn more about Digital Advertising:

What is Digital
Advertising?

Why is Digital Advertising Important?

Types of Digital
Advertising

How Does Digital
Advertising Work?

6 Key Digital Advertising
Metrics

Digital Advertising on
LinkedIn

What is Digital Advertising?

Digital advertising, or "online advertising", promotes products, services, or brands through paid placements on digital platforms.

Digital advertising aims to reach audiences in the online spaces where they spend much of their time.

Unlike traditional advertising such as billboards, print ads, TV, radio ads, digital advertising uses platforms like search engines, social media, email, mobile apps, and websites.

It includes methods and formats such as display ads, pay-per-click (PPC), search engine marketing (SEM), social media ads, content marketing, email marketing, etc.

Illustration of a person viewing several different types of ads on a laptop

Why is Digital Advertising Important?

Online platforms enable digital advertisers to target specific audiences based on demographics, interests, browsing habits, or previous brand interactions.

Brands can target precise audience segments, track and measure their digital ad campaigns in real-time, and adjust strategies as needed. This significantly differs from traditional advertising, which often involves generalized targeting and less measurable outcomes.

Before digital advertising, businesses invested heavily in few ad creatives, allocated fixed budgets, ran ads across large geographic regions, and measured success by quarterly regional revenue.

With digital advertising, businesses can swiftly run diverse ads, target specific audiences cost-effectively, measure performance within 24 hours, and improve campaigns based on real-time data.

illustration of a person studying a graph of customer data

Types of Digital Advertising

The massive scope of the internet and the diversity of online platforms means there are a wide variety of digital advertising types.

The following six categories, while not exhaustive, cover most digital advertising methods:

Social media advertising

Social media advertising promotes content on social media platforms to boost user engagement, brand exposure, and generate leads or sales. These platforms provide robust targeting options, allowing advertisers to reach specific audiences based on their demographics, interests, behaviors, and more.

illustration of a pop up ad is a browser window

Display advertising

Display advertising refers to the process of advertising a product or service through visuals like images and animations on publisher websites, apps, or social media platforms. These advertisements are typically formatted as banners, pop-ups, or sidebar ads. Display ads can be targeted to users based on their online behavior, demographics, and interests, often driving brand awareness and promoting specific products or services.

illustration of various ads in a browser window

Search engine marketing

Search engine marketing promotes websites by increasing their visibility in search engine results pages (SERPs). This is done primarily through paid advertising. It works on a Pay-Per-Click (PPC) model, where advertisers bid on keywords relevant to their target market, and they pay each time a user clicks on their ad.

Illustration of a prominent listing in a search engine

Mobile advertising

Mobile advertising is a multi-channel, digital marketing strategy that targets audiences on their smartphones, tablets, and other mobile devices, via websites, email, SMS, social media, and apps. Mobile ads can take various formats and can be particularly effective due to the personal and targeted nature of smartphone usage.

illustration of ads on a smart phone

Video advertising

Video advertising includes online display advertisements with video messages to engage audiences. These ads can appear before, during, or after streaming content, on social media feeds, or in search results.

illustration of various pupup ads with vidoe play back buttons

Audio advertising

Audio advertising uses sound to convey promotional messages, typically via digital radio, music streaming platforms, and podcasts. It allows targeted marketing based on listeners' demographics, music preferences, location, or time of listening. Given its high engagement rate and the rise of smart speakers, audio advertising offers a unique, personal, and less intrusive way to connect with audiences.

Illustration of a person listening as they browse on a laptop

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How Does Digital Advertising Work?

The process of digital advertising is designed to place a business in front of new customers. Given the challenge of predicting who will buy and how to reach them, most of the advertising process is devoted to systematic testing to find buyers at scale.

Setting Objectives

Advertisers begin by defining clear campaign objectives, such as driving website traffic, increasing brand awareness, generating leads, or promoting a specific product or service.

B2B businesses in particular often have numerous goals for advertising — talent acquisition, direct sales, brand reputation, etc. — and objective-based advertising options like what are offered through LinkedIn Ads make targeting easy.

illustration of a person viewing graphical data on a computer

Audience Targeting

Advertisers identify their target audience based on various factors such as demographic data (age, gender, location), interests, online behavior, or even their relationship with the brand (new visitor, past customer, etc.).

For existing products and services, customer data is mined to identify target profiles that can be directly targeted via digital ads. For new products and services, research is done to identify likely target profiles and where to target them.

Illustration of a large mobile device depicting two individuals working on their laptop and highlighting areas of a website.

Platforms and Ad Formats

Depending on the target audience and objectives, advertisers select the most suitable digital advertising platforms such as LinkedIn Ads, Google Ads, Facebook Ads and decide on the ad format (display ads, search ads, video ads, etc.).

Different platforms have different strengths. Facebook is often considered the gold standard for B2C advertising, while LinkedIn is the obvious leader for B2B advertising.

illustration of a person viewing an ad on LinkedIn

Digital Ad Creatives

Advertisers then create engaging ad content tailored to their target audience and chosen platform. This could include writing ad copy, designing visuals, creating videos, and more.

Every platform has a different algorithm and different audience behavior. While the core substance of any creative can often be leveraged across multiple channels, the focus, hook, and format will often need to be redone to suit each platform.

illustration of a designer laying out components of a digital ad

Bidding and Placement

Most digital advertising platforms use an auction-based system where advertisers set a maximum bid – the amount they're willing to pay each time a user interacts with their ad. The platform's algorithms then determine where and when the ads are shown based on factors like the bid amount, ad relevance, and ad quality.

These platforms are incentivized to get great results for their users, and they tend to reward the ads that users like with decreased costs. The more a business runs and dials in a campaign on any given platform, the better that platform will tend to perform for the business.

illustration of an auction

Tracking and Analysis

Once the ad is live, advertisers can track its performance in real-time using various metrics such as impressions, which show how many times the ad is shown; click-through rates, which show how often the ad is clicked; and conversions, which show how often the ad leads to a desired action like a sale or signup.

Ads are just the first touch point in a “funnel” or buying journey, and it's important that each stage of the funnel is rigorously tracked and analyzed as well.

illustration of a person viewing data

Campaign Optimization

Based on the analysis of these metrics, advertisers can optimize their campaigns to improve performance. This might involve adjusting the bid amount, tweaking the ad content, refining the target audience, or testing different ad formats.

It can also involve changes in the funnel stages that occur after the ads. For example, an ad funnel that is losing money initially might be made profitable by including an additional offer later in the funnel.

illustration of a person selecting specific ads

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6 Key Digital Advertising Metrics

One of the biggest advantages of digital advertising is the ability to measure, track, and optimize key metrics. Here are six of the most important metrics in digital advertising.

Impressions

Impressions are the number of times an ad is displayed and indicates its reach. Many impressions with a low click-through rate (CTR) might suggest the ad isn't compelling enough to attract clicks.

Click-Through Rate (CTR)

Click-Through Rate (CTR) is the percentage of people who click on an ad after seeing it, calculated by dividing the number of clicks the ad receives by the number of impressions. A high CTR generally indicates relevance and appeal to the target audience. A low CTR may suggest the ad isn't resonating with viewers.

Conversion Rate

Conversion Rate is the percentage of users who complete a desired action (conversion) after clicking an ad. Conversions can be purchases, newsletter signups, form completions, etc. and indicate the effectiveness of the ad and landing page in persuading users to act.

Cost Per Click (CPC)

Cost Per Click (CPC) is the amount paid per ad click. This crucial metric for managing advertising budgets influences campaign cost-efficiency. Factors affecting CPC include ad quality, maximum bid, and ad placement competition.

Cost Per Acquisition (CPA)

Cost Per Acquisition (CPA) is the average amount paid per conversion. This crucial metric indicates campaign cost-effectiveness. A lower CPA generally means a more cost-effective campaign, but the quality and value of acquisitions should also be considered.

Return on Ad Spend (ROAS)

Return on Ad Spend (ROAS) is the revenue generated per dollar spent on advertising, calculated by dividing total campaign revenue by total ad spend. This critical metric measures campaign profitability. A high ROAS indicates success and efficiency, while a low ROAS may signal a need for strategy adjustments.

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Digital Advertising on LinkedIn

Digital advertising gives brands an unprecedented ability to target specific audiences, measure ad performance, and rapidly improve ad campaigns. These characteristics, coupled with its cost-effectiveness, make digital advertising a valuable strategy for businesses of all sizes, from startups to multinational corporations.

With over 950+ million members, LinkedIn offers a unique and invaluable platform for digital advertisers to efficiently reach a variety of professionals.

Place a wide variety of native ads directly in the LinkedIn feed via sponsored content, including text, single-image ads, carousel ads, and video ads. These ads offer an excellent way to build brand awareness, drive website traffic, and generate leads.

The LinkedIn advertising platform provides in-depth analytics making it easy to monitor campaign metrics, analyze ad performance, and continuously optimize for better results

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