Advertising has been an embedded feature of our world for many decades now, providing brands with the opportunity to introduce new products to consumers and giving consumers a chance to discover new products. But over the years, advertising has evolved considerably. Today’s advertisers have access to an abundance of different platforms, analytics tools, and potential approaches to use to get their target market’s attention, and consumers oftentimes encounter advertising where they least expect it—or don’t even notice when they’re being advertised to.

One of the most interesting areas of development in this field has been with display ads. In just a couple of decades, display ads have gone from being a straightforward way to advertise on the internet to one of the most sophisticated and “smartest” forms of advertising in the world.

So how did display ads get “smart,” and how could they get smarter from here?

Display Ads: The Basics

Let’s start with a briefer on display advertising. Display advertising refers to targeted advertisements that are used to promote a product, service, or brand; these ads are distributed across a wide network of different “publisher” websites, usually making an appearance in the headers, in sidebars, and in other locations. Display ads can come in many forms; you’ve likely seen a mix of text-based ads, images, and videos as you’ve browsed the web. Additionally, display ads come in different shapes and sizes; you’ve likely encountered some dominating ads that practically take over the rest of the page, and you’ve likely missed some innocuous ads that were hard to notice.

There are many different display advertising “networks” that advertisers can leverage to promote their brand. Google’s Display Network is one of the largest, reaching 90 percent of all internet users across millions of different websites and blogs. With a set budget and the right advertising material, you can easily put together a campaign from scratch and start advertising. Most display advertising partners will charge you based on the number of clicks your ad generates, with a set “cost per click” (CPC) based on your industry, your competition, and your targets.

The quality and accessibility of display ads have increased dramatically since their inception. In other words, display ads have gotten “smart.” But what factors have led to these developments, and what kinds of developments could we see in the future?

Factors Pushing for Display Advertising Advancement

Why have display ads become more sophisticated? We can consider these push factors as influencing their development:

  • Profitability. Traditional forms of advertising have been expensive; you have to pay money to erect a billboard or print and distribute a flyer. But in the digital space, placement is relatively cheap. Tech companies and publishers can charge for advertising space without excessive costs, offering low prices to advertisers while still making a decent profit for themselves.
  • Mutual gains. Every link in the display advertising chain gets some kind of benefit. Advertisers can tap into a vast network they otherwise wouldn’t be able to touch. Display ad networks get to make a stream of income. Publishers can generate revenue from their popular online content. And consumers get to see ads for things that are important to them.
  • Audience expansion. The internet has grown remarkably in the past three decades, with millions of new popular websites and billions of new users to browse them. Over the years, display advertising has been accessible to a bigger and bigger audience. Accordingly, the potential money to be made has increased.
  • Ties to other technology. Display ad networks are often tied into other forms of advanced technology. For example, if your company hosts websites for millions of users, incorporating advertising into those websites is relatively easy; this is why major tech brands like Amazon, Google, and Facebook have all gotten into the display advertising game.
  • Display ad competition. Of course, there are dozens of major players in the display advertising market, and thousands of other significant options to choose from. This fierce competition drives innovation, and forces companies to invest in new technology and more advanced features to offer their customers.

Audience Targeting

One of the biggest ways display ads have gotten “smarter” is with their ability to target different types of audiences. Any marketer can tell you the secret to an effective campaign is learning to target the right people; if you choose the right target demographics for your messaging, and capture their attention with a well-placed, well-written message, you’ll stand a good chance of converting them.

Over the years, display ads have gotten much better at targeting the right types of people. Sophisticated display ad networks (like Google AdWords) offer you the ability to choose target consumers based on demographic factors, like age, gender, level of income, level of education, and dozens of other factors. But beyond that, you can make your audience even more specific with things like:

  • Remarketing. Through remarketing, you can specifically target users who have visited your website in the past. These are commonly used to remind people of the products they’ve seen on your site, and attract them back to complete their purchase (or research).
  • Interest. Google and other major tech companies keep detailed consumer profiles, so you can target people who have expressed interest in a specific type of product in the past. You can even target people based on the types of terms they’ve searched for in the past, and the types of websites they’ve visited recently.
  • Lookalike. One of the most impressive ad targeting features available today is targeting a “lookalike” audience. Here, you’ll upload an existing marketing list, and provide display advertising to people who resemble the types of people on that list.

Data Analytics

Display ads have also advanced significantly in the realm of data analytics. Advertisers can now log into a dashboard to monitor and analyze how their ads have performed in the recent past. How many ads have been served? How many impressions are they getting? How many clicks are they getting? How are those visitors behaving once they reach your website? How much did you pay for this traffic? Are those users converting? You can also conduct an AB test with different variations of your ad to compare their performance; which features are most likely to attract the right people to your site?

Ease of Access

Online advertising used to be a complex endeavor, but these days, signing up for a display advertising account and starting your first campaign is easy. Major display ad networks want to attract advertisers of all shapes and sizes—including mega-corporations who want to reach millions of people and small-time bloggers who just want their first stream of local traffic. Accordingly, they’ve designed platforms and products that can be easily understood—even if you’ve never run an advertising campaign in the past.

Budgeting and Costs

Display ads have always been affordable, except in highly competitive markets, but innovations in the industry have made it even more approachable for advertisers to set their budgets, understand their spending, and ultimately make better purchasing decisions.

For example, in some platforms, you can set a firm budget of how much you want to spend in a given period of time. You might set a budget of $1,000 per week; if you do this, the platform can automatically optimize displays to help you get the most out of this budget.

The Future of Display Ads

Thanks in part to their constant competition, platforms like Google, Amazon, and Facebook are constantly refining and improving their display advertising networks. In the coming years, we’ll likely see display ads with even more sophisticated targeting, lower costs, and lower barriers to entry—all with smarter and more advanced analytics platforms to measure your results. We may even see altogether new forms of advertising emerge.

Frank Landman

Frank Landman

Frank is a freelance journalist who has worked in various editorial capacities for over 10 years. He covers trends in technology as they relate to business.