Google Sample Display AdEver visited a site about cars and – hello, there’s a colorful ad inviting you down to the local gardening center to load up on mulch? How’d they know you’re a gardener!?!

You’ve just seen the power of online display ads, those boxes around the edges of websites, to both attract your attention and target you as a consumer.

Here’s how the display advertising system works and how you can make it work for your local business:

How Display Ads Target Consumers

Google, Yahoo!, Bing, Amazon and many other players have created networks and exchanges that place display ads on millions of websites that are happy to rent space on their pages for a cut of the action. The networks can then offer lots of ad availability by topic, for instance mulch ads that can appear on a site about gardening but also an article about gardening on a newspaper website.

The networks also target consumers based on educated guesses about their age, interests and location, based on the sites they visit, online purchases and other online actions recorded by cookies. So advertisers might buy ad inventory on any website just aimed at gardeners or homeowners in a ZIP code.

Building Awareness and Branding

It’s a bit like buying search ads but with some important differences. In search engine marketing, advertisers buy space, for instance on the right side of a Google page, based on the keywords that consumers use for search.  If they’re searching, consumers are most likely ready to buy—they want mulch and they want it now. Search ads target the end of the buying cycle.

Display ads cover the start of the buying cycle and aim to build awareness. That ad on the cars site reminds you that gardening season is coming and your local garden center will be ready when you are. Ditto for other seasonal or cyclical businesses: auto service, dentists, pest control, HVAC, financial services, attorneys, veterinarians, retirement homes. Local businesses also advertise with display to build awareness of new products, services or store locations.

Display ads are also about branding, presenting your business with some attractive imagery that makes you look professional, friendly, cool or whatever hot buttons you hope to push in your target consumer’s brain—and put you on an equal footing in appearance with national advertisers, if they’re your competition. A display ad can also run attention-grabbing animation (or, in ad-speak, “rich media”).

Metrics for Display Ads

Marketers use two main metrics to measure the effectiveness of online display ads: impressions and hover rates. One impression counts one time your ad was displayed on a page that a user viewed online, in other words, one opportunity for a user to see your ad, not a measure of actual views of the ad.  A typical display campaign would pull in tens or hundreds of thousands of impressions a month.

Since users move their cursors over parts of a web page that interest them, counting hovers (also known as mouseovers) gives an indication of how many users actually gave your ad some consideration. Typically, hover rates run at 5% of impressions.

You can count clicks on a display ad but click rates are low (an average 0.05%) and undercount the effectiveness of awareness advertising.

The bottom line on metrics: Expect to see precise results showing how your ad hit your target audience, but general correlation in how display ads lift your business.


Display advertising is priced at a cost per thousand impressions (CPM for short); how many impressions you need will be based on the size of your target audience – just how many gardeners are in the target ZIPs, for instance. Display advertising runs at about a third of the cost of search, in general.

Display Ad Creation

Every online display campaign starts with an online display ad, of course. You could go to a site like and type your message into one of their template ads for a simple, single image ad. To get more out of your ad for branding and eye-appeal, hire a designer to build you an animated ad; a typical treatment might rotate among 3 looks, giving you three shots at grabbing the user’s attention.

Getting Started

If you’re already buying Google AdWords search advertising, you can get your feet wet in display through the Search Network with Display Select  program that allocates part of your search spend to display on Google’s network under the same terms as search (pick keywords, set a budget and bids) and you see the results of your campaigns in the same reporting tools.

If you’re not a do-it-yourself advertiser, you may do better with a turn-key display ad service that offers a package deal that includes ad design, a guaranteed number of impressions, distribution on multiple networks, and the services of a campaign manager for a flat fee.

Image: Template ad sample from Google AdWords