Display advertising: what it is, how it works, and best practices

Display advertising has come a long way from its early days as the world’s first form of digital advertising.

Back then, targeting didn’t exist, A/B testing wasn’t possible, traffic came with few guarantees, and advertisers didn’t even care to ask about campaign performance, because the entire medium was completely untested.

Now, despite its everyday ubiquity, display advertising has become a central part of how brands reach, influence, and convert customers online.

According to EMARKETER, 57.2% of total digital ad spending went to display in 2025—giving it the largest share overall—with most industries allocating between 54% and 66% of their total budgets to the channel.

If you’re new to display advertising or want to use it more effectively in your campaigns, you’ve come to the right place.

In this blog post, we’ll walk through how to plan, execute, and optimize display campaigns—from targeting and buying methods to strategies and creative best practices—so you can build banner ads that actually get clicked.

What is display advertising?

Display advertising is a form of online advertising that uses visual ads—such as images, text, animations, or video—across websites and apps. When clicked, these ads often direct users to a landing page or website where they can learn more, sign up, or make a purchase.

Although it’s often easy to overlook due to how commonplace it’s become, display advertising is so widely used across digital channels that between 2026 and 2029, display ad spending in the US is expected to grow 31.9%, reaching $294.3 billion USD.

According to internal StackAdapt platform data, display is the most widely used channel by both enterprise and SMB marketers as part of their multi-channel strategies.

What is programmatic display advertising?

Programmatic display advertising is the automated process of buying and selling display ad inventory across websites and apps. Using real-time bidding (RTB) and machine learning, it helps advertisers reach relevant audiences more efficiently than traditional, manual buying methods.

As a result, programmatic buying has become the default way to purchase display inventory. In fact, nearly 90% of display advertising worldwide went through programmatic channels in 2025 and is expected to drive nearly all future growth.

What is the difference between search and display ads?

The difference between search and display advertising is that search ads appear in response to user queries, capturing high intent at the moment someone is actively looking for information through search engines like Google or Bing. Display advertising, in contrast, uses visual ads to reach audiences as they browse websites and apps, building awareness and consideration based on their interests and behaviors beyond search results.

That difference is reflected in how advertisers are allocating their budgets. In fact, display’s share of total digital ad spending is expected to reach 62% by 2029, putting it far ahead of search as the gap continues to widen.

Where are display ads shown?

Display ads can appear across a wide range of digital channels, allowing brands to reach audiences wherever they spend time online.

Common placements include:

• Publisher websites, such as news sites, blogs, and trade publications.
• Mobile apps, including games, news apps, and streaming services, like Spotify.
• E-commerce marketplaces, where ads appear alongside product listings or search results.
• Other digital platforms with feed-based placements, where display-style ads appear alongside content.

Within these channels, ads can show up in familiar formats—like banner placements at the top, side, or bottom of a page—as well as within content, such as in-article placements or app screens.

How does display advertising work?

Display advertising works by placing ads across websites and apps to reach people as they browse online. 

In most cases, this happens programmatically, with ad space automatically bought and sold in real time.

Behind the scenes, each impression is decided in milliseconds. 

When a user loads a page or opens an app, an auction takes place in which advertisers bid to show their ads based on their campaign goals.

Which ad gets shown depends on a variety of factors, including targeting, context, and the bid amount.

In doing so, this process helps ensure ads are shown to the right audience at the right time.

The display advertising ecosystem

Display advertising operates within a connected ecosystem of advertisers, publishers, and advertising technology platforms that work together to deliver ads.

Here’s a simplified explanation at a high level: 

• Advertisers create campaigns and define who they want to reach. 
• Publishers make ad space available on their sites and apps. 
• Programmatic platforms sit between the two, helping match the right ad with the right opportunity in real time.

The ecosystem also includes ad networks and exchanges, which aggregate inventory and facilitate transactions between buyers and sellers, as well as demand-side platforms (DSPs), which allow advertisers to buy, manage, and optimize campaigns across multiple sources.

When a user loads a page, these systems work together to run an automated auction in real time.

Rather than relying strictly on manual negotiations, advertisers can use programmatic advertising platforms like StackAdapt to reach their ideal audience across thousands of sites and apps through a single platform.

Display advertising targeting

Targeting with display works much like other digital channels, but often offers more ways to reach the right audiences. Here are some of the most common ways you can refine delivery and align your campaigns with specific goals:

• Geographic targeting reaches audiences based on location—down to the city, postal code, designated market area, or radius level—to ensure ads appear where they’re most relevant and support local, regional, or national campaigns.
• First-party targeting activates your own customer data—such as site visits, purchase history, app activity, or CRM lists—to reach and re-engage audiences. It can also be used for suppression or lookalike modeling to extend reach.
• Third-party targeting uses external data providers to reach audiences based on demographic attributes, interests, past behaviors, and modeled segments beyond your owned data.
• B2B and ABM targeting reaches users based on company, industry, job seniority, or technology stack to support account-based and B2B campaigns.
• Dynamic retargeting automatically re-engages users who previously visited your site with personalized ads featuring the exact products or pages they viewed, helping drive return visits and conversions.
• Contextual targeting places ads alongside relevant content so your message appears next to the topics people are already engaging with, while also allowing you to exclude content that doesn’t align with your campaign.
• Device and supply targeting refines delivery based on device type, inventory source, and environment to better align placements with campaign goals.
• Domain targeting allows you to include or exclude specific websites to control where ads appear and maintain brand suitability.
• Language targeting serves ads based on site language or browser settings to ensure messaging matches the viewer’s preferred language.

When used together, these targeting options help improve relevance, reduce wasted impressions, and make campaigns more efficient.

What types of display advertising are there?

Display advertising comes in several formats, each with its own strengths depending on campaign goals, creative assets, and where ads appear.

Choosing the right display ad format depends on your campaign objective, the audience you’re trying to reach, and where your ads will appear. Some formats are better suited for broad awareness, while others are designed to drive engagement or conversions.

From standard banner units to rich media and video, this table breaks down the main types of display ads and what makes them most effective.

Format	What it is	Why it matters	Best for
Still/animated ads	Static or animated display ads that appear on screen.	Simple to produce and effective across standard placements.	When you need a versatile format for prospecting or retargeting, depending on the messaging. It’s also a great format for storytelling.
In-banner video ads	Display banners that incorporate video within the ad unit.	Adds motion and sound to display ads for extra engagement.	When you want the impact of video in standard display placements; often at a lower cost than online video.
Carousel ads	Ads that allow users to scroll through multiple images or products.	Allows shoppers to browse without leaving the ad, aiding product discovery.	When highlighting multiple products, features, or offers.
Countdown ads	Ads featuring a live countdown tied to a deadline or event.	Creates urgency and makes limited-time offers harder to ignore.	When promoting launches, sales, or time-sensitive registrations.
Testimonial ads	Ads built around customer quotes, reviews, or case study highlights.	Builds credibility and reduces hesitation through social proof.	When prospects are weighing options and need reassurance before making a decision.
Interactive ads	Ads that include embedded elements like quizzes, polls, calculators, scratch-and-reveal features, or product selectors such as color palettes.	Encourages active engagement rather than passive viewing.	When you want users to engage with your ad and explore options before clicking through.
Dynamic display ads	Ads that automatically adjust creative based on user behavior or location, such as previously viewed products, related items, or nearby stores.	Delivers more relevant, personalized ads that reflect real user intent and proximity to physical locations.	When retargeting shoppers, promoting nearby stores, or tailoring offers based on location or browsing behavior.
Social display ads	Social-style posts adapted into display formats for programmatic campaigns through StackAdapt.	Extends high-performing social ads and posts beyond social platforms.	When extending social campaigns and testimonials across the open web.
Disclaimer ads	Ads that include tailored legal or regulatory disclosures within the unit.	Ensures compliance without sacrificing creative clarity.	When advertising in regulated industries or markets like healthcare or gambling.
Audio companion banners	Visual ads shown on streaming platforms alongside audio content.	Extends display campaigns into streaming platforms.	When you want to reach listeners streaming music and podcasts to maintain visibility across devices.

Fun fact: In 2026, US advertisers are expected to spend over 3X as much on rich media ads (which include video and interactive display formats) compared to traditional banner ads.

What are common display ad sizes?

Display ads come in a range of sizes, many of which were originally defined and standardized by the Interactive Advertising Bureau (IAB) to help advertisers run campaigns consistently across publishers. 

Some of the most common fixed sizes still used today include:

• medium rectangle (300×250)
• leaderboard (728×90)
• skyscraper (160×600)
• large rectangle (300×600)
• billboard (970×250)
• smartphone banner (300×50 or 320×50)

That said, the IAB has also recommended a shift toward flexible ad units that are based on aspect ratio and size range, rather than a single fixed pixel size, to make display ads more adaptable across responsive websites and different screen sizes, particularly on mobile.

If you’re planning display ads today, it’s still useful to know the standard sizes. 

But, as explored more in-depth below, it’s just as important to design with flexibility in mind—adapting layout, copy, and visual hierarchy for each format rather than simply resizing the same asset across placements.

What are the benefits of display advertising?

As targeting capabilities have advanced and measurement has become more precise, display advertising has evolved into a flexible channel that can support both brand awareness and performance goals.

Here are some of the main benefits of display advertising:

• Precise targeting: Programmatic advertising platforms help you reach specific audiences based on demographics, interests, and online behaviors. By activating first-party data or layering in contextual and third-party data, campaigns can narrow in on users most likely to convert.
• Cost-effective reach: Display advertising allows you to place ads across thousands of websites and apps at a fraction of the cost of traditional channels. With affordable pricing models and the ability to optimize campaigns mid-flight, you can expand reach while maintaining budget control.
• Cross-channel integration: Display ads work alongside social, search, native, video, and connected TV (CTV) to keep your brand visible as customers move between platforms. Used within a broader multi-channel strategy, display can follow up on earlier engagement, support search intent, and help move buyers from interest to action.
• Creative flexibility: Display advertising makes it easy to test and adapt creative in real time. With dynamic creative optimization (DCO), you can tailor headlines, images, CTAs, and offers to different audiences, reducing production costs and wasted impressions.
• Full-funnel performance: With the right formats and bidding strategies, campaigns can drive clicks and unique reach at the top of the funnel, improve click-through rate (CTR) during the consideration phase, and drive sales and sign-ups at the bottom of the funnel.
• Higher conversions: By re-engaging people who have already visited your site or viewed a product, display campaigns can keep your brand top of mind and encourage return visits, increasing sales.
• Measurable impact: Display advertising makes it easy to see what’s working. You can track impressions, clicks, conversions, and return on ad spend (ROAS), tying results back to specific decisions to inform future campaigns.
• Stronger brand recall: Formats like rich media combine imagery, motion, and interactive elements to improve visual storytelling, allowing you to capture attention and leave a more lasting impression than text alone.
• Greater inventory variety: Programmatic platforms like StackAdapt provide access to hundreds of thousands of sites, including premium publishers. That means campaigns aren’t confined to just a few placements, which can help limit overexposure.
• Easy to create: Display ads don’t need tons of resources to design. Teams can quickly create ads—even using common design tools like Canva or in-platform tools from programmatic partners—lowering the barrier to entry for brands of all sizes.

How to get started with display advertising

Launching a display campaign doesn’t have to be difficult. Here are a few practical steps to guide your planning—from targeting and creative development to bidding strategy and performance measurement—for any industry you’re working in:

Step 1: Choose the right platform and buying approach

Not all programmatic platforms are created equal. When working with a DSP, ask about verification partners, inventory access, and platform features to ensure your campaigns can scale effectively.

Evaluate supply quality, brand safety, and measurement capabilities to ensure your ads appear in the right places and deliver results, instead of on low-quality inventory—like made-for-advertising sites—where ads are crowded, and performance is often limited.

Step 2: Define your audience

Start by identifying who you want to reach and where they are in the buying journey. Go beyond basic demographics by layering:

• Firmographic data
• Intent signals
• Past engagement

Doing so will help ensure your messaging matches your audience’s mindset.

While adding layers can reduce scale, it often improves relevance. Forecasting tools within DSPs can also help you understand the trade-offs of different audience targeting combinations before launching.

Step 3: Set clear campaign goals

Prior to launching your ads, determine what success looks like. 

Whether your objective is reach, increasing site or in-store traffic, or conversions, your KPIs, budget, and bidding strategy should align with your overall goal.

Step 4: Develop and size your creative properly

Strong performance starts with strong creatives. 

Develop clear, focused messaging aligned to your objective, and size assets correctly across desktop, mobile, and in-app placements to maintain consistency.

Step 5: Launch across the right channels

Activate your campaign across websites and apps where your audience already spends time, and apply frequency caps to avoid overexposure. 

Consider how display can complement social, search, or other programmatic channels—like CTV or digital audio—to maintain consistency across touch points.

Step 6: Monitor and optimize performance

Track performance beyond surface-level metrics. Evaluate impressions, clicks, conversions, and post-click behavior to understand what’s driving results. Adjust creative, audiences, or bids based on what you learn.

Taken together, these steps help ensure your display ads—whether used as a standalone channel or as part of a multi-channel strategy—are set up effectively from the start.

What are some display advertising best practices and examples?

Design and messaging are ultimately what separate display ads that get ignored from those that drive results. 

Below are some display advertising best practices from StackAdapt’s award-winning in-house Creative Studio team. 

Follow them to ensure your visuals, copy, and messaging are clear, consistent, and built to perform.

Keep it simple

Display ads appear in small spaces and compete for limited attention. If your message can’t be understood in two or three seconds, it’s likely too complex. 

Focus on one clear idea, relevant visuals, and concise copy. Think of it as a preview of your campaign, not a landing page.

This cloud security ad, designed by the Creative Studio, is effective because it centers on a single, clear message with minimal supporting copy and a high-contrast call to action (CTA), making the value proposition immediately understandable.

Design with the format in mind

Display placements range from narrow portrait units to wide landscape formats, and each requires thoughtful composition. 

Instead of simply resizing assets, adjust layout, copy, and visual hierarchy so every ad feels intentional, and the elements have room to breathe—like in this interactive ad for an insurance company—not crowded or compressed.

Use high-quality visuals

Clear images and well-formatted assets make your message easier to process at a glance: 

• Avoid blurry, over-filtered, or poorly cropped visuals. 
• Keep your product or service as the focal point. 
• Use high-quality logos with proper sizing and formatting.

This ad works well because the vehicles are presented in sharp detail against a clean background, making them the clear focal point.

Show your brand early

If you’re using animation or video, assume viewers may only see the first frame before scrolling past. 

Make sure your logo and message appear within the first two seconds, so your brand and value proposition—like this ad for a personal loan business—is recognizable immediately and easily understood, even if the rest of the ad goes unseen.

Make the headline do the work

Most viewers will read the headline before anything else. 

Use clear, specific language that communicates what you offer, and treat character limits as guardrails, not obstacles. 

Remember: If the headline isn’t strong on its own, the rest of the ad won’t be either.

In this office furniture ad, the headline takes a common workplace problem and positions the product as a tailored solution—making its value easy to understand at a glance.

Use clear, direct CTAs

Attention spans are shrinking. To capture attention, simple language is key. 

Avoid jargon and overly technical phrasing, and keep display ad copy concise and easy to understand.  

Your CTA should be active and specific. “Shop now” or, in the case of this Creative Studio ad, “Schedule a call” is clearer than vague prompts like “Click here.”

Keep animation intentional

Animation should reflect your brand and campaign objective. 

A premium brand may call for smooth, restrained motion, while a more energetic brand can use quicker, more dynamic transitions. 

Like this ad for a financial services company, the style and pacing should enhance the message, not distract from it.

Use strong contrast

Contrast helps viewers process your message quickly. 

Make sure text stands out clearly against the background and that key elements—like your logo and headline—are easy to distinguish at a glance. 

Use size, weight, and color intentionally to guide attention.

For example, in this athletic footwear ad, the product name, vibrant image of the shoe, and cost stand out against the light background—guiding attention from brand to product to pricing to CTA in a clear visual sequence.

Keep an eye on creative fatigue

Last but not least, it’s important to remember that not every ad needs an immediate refresh. 

If performance remains steady, there’s no reason to change things. 

That said, don’t be afraid to keep testing: You can still continue trying new variations alongside your existing display ads. Just avoid making changes without a clear reason or hypothesis.

When results begin to decline, experiment by adjusting headlines, imagery, or color and monitor the results in an A/B test before overhauling the entire campaign.

Whether you’re launching a new campaign or refining an existing one, follow these best practices to improve performance over time without unnecessary rework.

How much does display advertising cost?

The cost of display advertising varies based on targeting, ad format, and inventory quality. Its value is ultimately determined by the goals you’re trying to achieve—whether it’s building awareness, driving site traffic, or generating conversions.

Here are a few of the most common display advertising pricing models:

• Cost per mille (CPM): One of the most common pricing models, advertisers pay a set price per 1,000 impressions served. The average CPM can range from $1.24 USD for standard display inventory bought via RTB on the open exchange to $4 USD and above for private marketplace deals with premium publishers. Using more advanced targeting can increase CPMs, but it also helps reduce wasted impressions and improve overall efficiency.
• Cost per click (CPC): Advertisers pay each time a user clicks on their ad. This model is often used when the goal is to drive site traffic or engagement, particularly in mid- to lower-funnel campaigns, as clicks indicate a stronger level of interest than impressions.
• Cost per lead (CPL): This model is commonly used in lead generation campaigns where the focus is on capturing qualified prospects rather than just driving traffic. Advertisers pay when a user completes a specific, predefined action, such as signing up for a newsletter, downloading content (like a guide or report), or registering for a webinar.
• Cost per acquisition (CPA): Under this pricing model, advertisers pay when a user completes a conversion, such as making a purchase or booking a demo that can be attributed to the display ad. This model is typically used in performance-focused campaigns, where success is measured by specific results that impact revenue—and, in industries with long sales cycles like B2B, pipeline growth—rather than clicks or impressions alone. In many cases, stronger creative and more precise targeting can help lower CPA by improving engagement and conversion rates, even if CPMs are higher.

What display advertising metrics can you use to measure performance?

To understand how your display campaigns are performing and optimize them more effectively, it’s important to track how users see, engage with, and respond to your ads. Here are some of the most commonly used display advertising metrics:

• Impressions count how many times your ad is served, giving you a sense of overall scale and visibility. An impression is counted each time your ad is displayed on a webpage or within an app.
• Reach tracks the number of unique individuals who see your ads, helping you understand how many specific people your campaigns reach.
• Frequency shows the average number of times each user sees your ad, helping you balance visibility without overexposing users to the same ad—reducing wasted impressions and the risk of ad fatigue.
• CTR measures the percentage of users who click on your ad after seeing it, letting you gauge whether your creative and messaging are resonating with your target audience. CTR is calculated by dividing the number of clicks by the total impressions.
• View-through conversions track conversions that occur after a user sees—but doesn’t click—your ad, showing how display ads contribute alongside other channels across longer buying cycles and the full customer journey.
• ROAS helps you evaluate overall campaign profitability by measuring how much revenue you generate for every ad dollar spent.

Taken together, these metrics—along with other programmatic KPIs—can show you not just how many people see your ads, but how they engage with them and convert over time.

Because display often works alongside other channels, it’s also important to consider how it contributes to conversions across touch points, not just in isolation.

In addition to channel-level metrics, measurement frameworks like cross-channel attribution can provide a more complete view of performance—giving you a clearer understanding of how different parts of your media mix work together.

Common display advertising challenges (and how to solve them)

Even with the right strategy, display campaigns don’t always perform as expected. Here are some common challenges and how they can be addressed to improve performance.

Evolving data privacy regulations

The ongoing deprecation of third-party cookies has made it more difficult to rely on traditional audience targeting and measurement methods. Building a strong first-party data strategy—along with leveraging contextual, privacy-conscious solutions like StackAdapt’s Page Context AI—can help you maintain performance and measure campaign performance more accurately moving forward, no matter how privacy regulations and policies evolve.

Ad fraud and wasted spend

Made-for-advertising sites siphon off ad spend and undermine campaign performance by mass-producing clickbait-style content that prioritizes ad volume over user experience.

As a result, without proper supply and inventory controls in place, ads may appear on low-quality sites, leading to wasted impressions, lower engagement, and weaker overall performance.

Platforms like StackAdapt help prevent this by partnering with providers and working with an internal Platform Quality team to continuously identify and block low-quality or suspicious inventory. By regularly vetting supply, ads will appear on high-quality sites and apps that deliver results, not just cheap impressions.

Ad fatigue

When users see the same ads too often, studies have shown that they become easier to ignore—reducing engagement over time. Applying frequency caps—which limit how many times an individual user sees an ad within a specific period of time—can help control how often ads are served, making it easier to maintain visibility without overexposing users and annoying them.

Scaling creative production

Running effective display ad campaigns requires a steady stream of creative variations to keep messaging fresh and avoid ad fatigue. But producing and updating assets manually can quickly become a bottleneck for many teams.

Programmatic platforms like StackAdapt help solve this challenge by providing AI-powered tools like the Creative Builder, enhanced by Ivy™, alongside self-serve DCO solutions, which allow teams to generate, adapt, and personalize creative at scale.

Instead of building each variation manually, campaigns can either use templates and AI to quickly create new assets or automatically adjust messaging, imagery, and formats in real time—reducing production costs while increasing ad performance.

What is the future of display advertising?

Display advertising continues to evolve in unique and practical ways as changes in technology, data, and buying methods reshape how campaigns are planned and executed. 

As with most areas of digital marketing, understanding where it’s heading can help you make more informed decisions and adapt your strategy to stay competitive, even as those changes continue to accelerate.

Programmatic continues to dominate growth

According to EMARKETER, programmatic’s share of display ad budgets grew from 51.7% in 2014 to nearly 97% in 2025—representing about $50 billion in new spend versus just $1.63 billion USD for non-programmatic.

For advertisers, this means programmatic is the primary way display campaigns are planned, bought, and scaled. Those who don’t adopt it risk limiting reach, becoming more inefficient, and falling behind competitors.

Retail media expands display’s role in performance marketing

In 2026, retail media is expected to account for 11.7% of programmatic display spend, growing 23.6% year over year and at a rate faster than even programmatic social media ad spending.

As a result, retail media is quickly becoming a key driver of performance-focused spend within display advertising, especially for advertisers looking to improve lower-funnel performance.

That growth isn’t limited to retailer websites. Retail media networks are increasingly extending their inventory and targeting capabilities into off-site environments like CTV, social media, and the open web, with these placements projected to account for $15.89 billion USD in off-site display spend in 2026.

For advertisers, this shift creates new opportunities to use display for more targeted, conversion-focused campaigns, not just broad awareness.

AI reshapes how display campaigns are executed

As programmatic advertising continues to evolve, AI is increasingly embedded across every stage of display advertising, from bidding and budget allocation to forecasting and creative optimization.

Programmatic platforms now use AI to analyze historical behavior, intent signals, and engagement to predict which impressions are most likely to convert and adjust bids accordingly.

But AI’s role extends beyond bidding and optimization.

According to a recent study, 60% of advertisers are already using AI for content creation, 43% are using it for creative performance analysis, and 40% for creative optimization.

Because of this, display advertising is becoming more predictive and efficient—allowing campaigns to make smarter decisions and adapt in real time based on what’s most likely to drive performance.

Putting it all into practice

Despite being one of the earliest forms of digital advertising, display hasn’t faded as new channels have emerged. Instead, it’s been reshaped by programmatic buying, AI advancements, and more flexible creative innovations, making it easier to create more clickable and memorable campaigns.

Ready to take the next step? Learn more about StackAdapt’s display advertising solutions and speak with our team.

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