Display Basics
What Is Display Advertising? Types, Costs and How It Works
You’ve seen thousands of display ads today without thinking about it. The banner above a news article. The product that follows you from site to site after you looked at it once. The video that plays before an app game.
Those are all display ads. For many businesses, they’re the cheapest way to put a brand in front of a lot of the right people, many times over.
This guide explains what display advertising is, how it works behind the scenes, the main types, what it costs and how to judge whether it’s working.
Quick answer: Display advertising is paid visual advertising, made of images, video, animation or native placements, shown on websites, apps and video platforms. Advertisers target people by audience, interest, website topic or past visits to their own site. US display ad revenue reached $81.6 billion in 2025, about 27.7% of all digital ad revenue (IAB/PwC). Display works best for building awareness and bringing back past visitors, and it’s usually cheaper per view than search ads.
What display advertising means
Display advertising is any paid ad that shows up as a visual on a website, app or video platform. Text-only ads on a search results page are search ads. Everything visual, placed around content someone is reading or watching, falls under display.
The key difference from search is intent. Search ads reach people who are actively looking for something. Display ads reach people while they’re doing something else, like reading the news, checking the weather or playing a game.
That makes display good at 2 jobs:
- Getting known by people who aren’t shopping yet but will be later
- Bringing people back who already visited your site and left
It’s weaker at grabbing someone at the exact moment they want to buy. That’s what search is for.
How display advertising works
Most display ads are bought and placed by software in a fraction of a second. Here’s the short version of what happens when a web page loads:
- A person opens a page on a site that sells ad space.
- The site sends information about the ad slot, and about the visitor in general terms, to an ad exchange.
- Advertisers’ buying platforms decide whether that impression fits their targeting and how much to bid.
- The highest bid wins, and that ad appears on the page.
This automated buying is called programmatic advertising. Our page on programmatic display covers it in more depth.
The biggest single place to buy display is the Google Display Network. Google says its Display Network sites reach over 90% of internet users worldwide (Google Ads Help) across more than 2 million websites (Google). See our guide to Google Display Ads for how that network is set up.
The 5 main types of display ads
| Type | What it looks like | Best for |
|---|---|---|
| Banner ads | Static or animated images in standard sizes around page content | Broad reach at a low cost |
| Responsive display ads | Ads Google assembles from your images, headlines and logos to fit any slot | Running across many sites without designing every size |
| Retargeting ads | Ads shown to people who already visited your site | Bringing back interested visitors |
| Native ads | Ads styled to match the content around them, like “sponsored” article cards | Content promotion, softer messages |
| Video and rich media | Video, expanding or interactive ads | Telling a story, product demos |
Banner ads
The classic format. Common sizes include the 300x250 medium rectangle, the 728x90 leaderboard and the 320x50 mobile banner. Our guide to Google display ad sizes lists them all with specs.
Responsive display ads
You upload images, logos, headlines and descriptions. Google combines them into ads that fit whatever space is open. This is the default format on the Google Display Network today, and it saves a lot of design time.
Retargeting ads
These follow up with people who visited your site, viewed a product or started a form. They tend to get the best results of any display type, because the audience already knows you. Our retargeting page explains how we run them, and retargeting vs. remarketing clears up the 2 terms.
Native ads
Native ads take on the look of the site they appear on. You’ve seen them as “Recommended for you” article links at the bottom of news stories. The IAB counts native as part of display in its revenue figures.
Video and rich media
Video ads in apps and on websites, plus ads that expand or let people interact. They cost more to make and buy, but they hold attention longer.
How targeting works
Display targeting falls into 2 groups.
Targeting the person:
- Audiences by interest or behavior, such as people researching home improvement
- Your own lists, like customer emails uploaded to the ad platform
- Past site visitors, for retargeting
- Demographics, like age range or household income where allowed
Targeting the place:
- Topics, such as all pages about personal finance
- Specific sites or apps you choose by hand
- Keywords, matching pages that mention certain terms
Most good campaigns combine both. For example, people in your target audience, but only on sites about your industry.
What display advertising costs
Display is usually bought by the thousand views (CPM) or by the click (CPC). Costs vary widely by audience, format and season.
As a broad reference, WordStream’s Google Ads benchmarks put the average display click-through rate at 0.46% and the average display cost per click at $0.63, against 3.17% and $2.69 for search (WordStream). Your numbers will differ, so treat those as a starting point. You can run your own figures through our CPC calculator and CTR calculator.
Our full breakdown of Google Display Ads cost covers budgets in more detail.
Display vs. search advertising
| Display | Search | |
|---|---|---|
| Where it shows | Websites, apps, video | Search results pages |
| Who sees it | People browsing, not actively searching | People searching for something specific |
| Format | Images, video, native | Mostly text |
| Typical cost per click | Lower | Higher |
| Click-through rate | Lower | Higher |
| Best job | Awareness and retargeting | Capturing demand that already exists |
Most advertisers use both. Search catches people ready to act. Display keeps your brand known to everyone else and brings back the people search sent you.
How to tell if display advertising is working
Click-through rate alone is a poor judge of display. Many people see an ad, don’t click and visit later by typing your name into Google. Look at these too:
- View-through conversions: people who saw an ad, didn’t click and converted later
- Branded search volume: more people searching your company name after a campaign starts
- Retargeting conversion rate: how often returning visitors take action
- Cost per acquisition across display and the channels it supports
- Placement reports: which sites your ads ran on, so you can cut the junk
Without placement checks, a share of display budget can end up on low-quality sites and apps. Excluding them is basic housekeeping.
Is display advertising right for your business?
Display tends to fit well when:
- People take weeks or months to decide, so staying visible matters
- You already get site traffic and want to bring more of it back
- You’re launching something new and need people to know about it
- Your product shows well in an image or a short video
It fits less well if you have a tiny budget and no site traffic yet. In that case, start with search, then add retargeting once visitors are coming in.
For more ideas on creative, see our Google Display Ads examples. If you sell to businesses, our guide to B2B display advertising covers account targeting.
Get a display plan for your business
Display can build demand cheaply, or it can quietly waste money on sites nobody reads. The difference is in the targeting, the creative and how closely someone watches placements.
If you want a second opinion on your display spend, or a plan to start, contact us. Tell us what you sell and who buys it, and we’ll show you where display fits and what we’d test first.
FAQs
What is an example of display advertising?
A banner ad for running shoes on a sports news site is display advertising. So is an ad for a hotel that follows you on other websites after you looked at its booking page.
Is display advertising the same as programmatic advertising?
No. Display is the ad format. Programmatic is the automated way most display ads are bought. You can buy display directly from a website without programmatic, though most display today is bought programmatically.
Is social media advertising display advertising?
Social ads are visual, so they share a lot with display, but most industry reports count them as a separate category. The IAB reports social and display revenue separately.
How much should I spend on display ads?
Enough to reach your audience several times a month. For many small and mid-size businesses, that starts in the low thousands of dollars a month, with retargeting taking the first share [benchmark estimate].
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