I. What is display advertising and how it works
Display advertising is a form of online advertising that uses images, videos, rich media, or native creatives to appear across websites, online newspapers, applications, YouTube, Gmail, and other digital placements. The most common delivery mechanism is real-time bidding (RTB), executed through ad networks to serve ads on publisher platforms.
In practice, modern display advertising is largely powered by programmatic advertising, leveraging automated technology and real-time bidding algorithms. This enables ad buying and selling to happen rapidly, accurately, and cost-efficiently. The process typically works as follows:
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First, the advertiser sets up a campaign, defining budget, target audience, and ad creatives on a Demand-Side Platform (DSP). Campaign data is then encoded and sent to the ad server.
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From the ad server, the system identifies suitable ad placements and sends bid requests to ad marketplaces, forwarding campaign data to Ad Exchanges. Here, real-time bidding (RTB) takes place, where multiple advertisers compete for the same impression.
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On the publisher side, Supply-Side Platforms (SSPs) simultaneously provide inventory data (available ad placements) to the exchange, ensuring transparent delivery and optimal yield for publishers.
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Once the auction ends, the winning ad is served to the selected ad position—the placement on a website, app, or digital platform. At this stage, the system uses device IDs, cookies, or behavioral signals to determine which ad is shown to which user.
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Finally, the ad appears to the user and generates impressions. The entire process happens within milliseconds and is fully automated—allowing advertisers to optimize costs while publishers maximize revenue from their inventory.
Overall, display advertising plays a critical role in building brand awareness, shaping emotional perception, and driving purchase intent. Depending on the campaign stage and objectives, advertisers can adopt different strategies—from brand awareness and engagement to direct conversion.
II. Types of display advertising formats
Display advertising comes in a wide range of formats, designed to support different marketing and advertising objectives:
1. Banner Ads
Traditional display ads using static or animated images, commonly appearing on online newspapers such as VnExpress. Banner ads are well-suited for broad brand exposure.
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Pros: Wide reach, easy to set up, relatively low cost, and multi-device support.
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Cons: Limited display space, prone to ad blindness, low CTR, and heavy reliance on creative quality.
2. Native Ads
Ads designed to seamlessly match the content and layout of the platform, creating a natural experience that blends into articles or feeds.
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Pros: Builds trust, less intrusive, contextually relevant, and often delivers higher CTR.
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Cons: Primarily supports long-term branding rather than immediate action, with higher costs than standard banners.
3. Video Ads
Short- or long-form video ads displayed on online news sites, social platforms, or embedded within content.
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Pros: Powerful storytelling through visuals and sound, strong recall, high engagement, and viral potential.
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Cons: Can disrupt user experience if poorly integrated; requires higher production and distribution budgets.
4. Rich Media Ads
Interactive ads featuring multimedia elements such as animations, mini-games, scrolling, or touch interactions.
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Pros: Highly engaging, creative, and effective at capturing user attention.
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Cons: Requires advanced technology and complex design; higher bandwidth and implementation costs.
5. Interstitial Ads
Full-screen ads displayed when users transition between pages or open an app.
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Pros: Strong visual impact and high attention, ideal for branding campaigns.
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Cons: Can feel intrusive if shown too frequently, potentially increasing bounce or app exit rates.
6. Pop-up Ads
Ads that appear in a new window or floating layer over the content users are viewing.
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Pros: High visibility and immediate attention.
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Cons: Often closed instantly, disruptive, and may negatively impact user experience.
>>> View illustrations of display ad formats here.
III. Display advertising buying models
Within programmatic advertising, display ads can be purchased through various buying models, each with its own strengths and limitations depending on campaign goals and budget:
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Real-Time Bidding (RTB): Ads are auctioned in real time whenever a user visits a website, with the winning ad served within milliseconds.
→ Advantage: High budget flexibility and efficiency, as advertisers only pay for delivered impressions.
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Programmatic Direct: Ads are purchased directly from publishers without an auction, typically for large-scale campaigns requiring stability.
→ Advantage: Guaranteed placements and impression volume for display advertising campaigns.
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Private Marketplace (PMP): A premium version of RTB where only invited advertisers can bid within a private environment.
→ Advantage: Greater control, access to high-quality audiences, and reduced risk from open-market inventory. -
Programmatic Guaranteed: Advertisers and publishers agree in advance on fixed pricing, impression volume, and placements.
→ Advantage: Ideal for large brands seeking consistency and stability in display advertising execution.
IV. Pricing models in display advertising
Beyond buying methods, selecting the right pricing model plays a crucial role in optimizing display advertising budgets. Common models include:
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CPM (Cost per Mille): Advertisers pay per 1,000 impressions. This is the most common model in display advertising, ideal for brand awareness campaigns requiring broad reach.
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CPC (Cost per Click): Payment occurs only when users click on the display ad, making it suitable for driving traffic to websites or landing pages.
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CPA (Cost per Action): Costs are incurred only when users complete a defined action such as a purchase or form submission—often used for conversion-focused display advertising.
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CPL (Cost per Lead): Advertisers pay for qualified leads (e.g., valid phone numbers or emails), commonly applied in real estate, education, and finance.
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CPD (Cost per Duration): Ads are purchased for a fixed placement over a defined period, allowing full control over visibility and exposure.
V. Key benefits of display advertising
Display advertising goes beyond brand exposure—it serves as a strategic tool supporting the entire customer journey. Key benefits include:
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Brand Awareness: Banner and video ads on premium publishers or online TV platforms help brands achieve rapid, large-scale visibility—laying the foundation for long-term marketing success.
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Engagement: Rich media and native ads with clear CTAs encourage active participation, extend interaction time, and build stronger emotional connections—especially with younger audiences.
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Lead Generation: In-feed ads and integrated forms enable businesses to capture high-quality customer data, supporting long-term nurturing and CRM strategies.
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Conversion Optimization: Remarketing and programmatic ads leverage behavioral signals to reach users at critical decision points, while transparent measurement (CTR, CPA, ROI) helps turn media spend into tangible revenue.
VI. Best Practices to Optimize Display Advertising in 2025
To maximize performance while protecting brand safety, marketers should focus on the following factors when running display advertising campaigns:
1. Choosing the Right Platforms and Placements
This foundational step ensures efficiency, cost control, and brand protection:
- Prioritize major news outlets or reputable ad networks to access high-quality traffic and leverage publisher credibility.
- Select industry-relevant platforms to improve contextual relevance, reduce wasted impressions, and minimize ad fraud risks.
2. High-Impact Creative and Banner Design
Creative quality directly influences attention and engagement:
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Eye-catching visuals, clear CTAs, and mobile-first design to boost CTR and align with mobile user behavior.
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A/B testing and multi-format execution to continuously optimize performance and adopt rich media or native trends.
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AI-driven personalization to tailor messages for different audience segments, reducing ad blindness and increasing engagement.
>>> Discover 5 proven tips for optimizing banner ad design.
3. Budget Management and Optimization
Effective budget control ensures measurable ROI:
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Allocate budgets by channel and campaign to avoid misallocation and track performance via metrics such as CTR and CPA.
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Leverage programmatic and RTB to automate buying, dynamically adjust bids, and reach the right users at the right time.
4. Continuous Evaluation and Compliance
This step safeguards long-term performance and brand integrity:
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Regular data analysis to identify underperforming placements or ad fraud early and make timely adjustments.
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Compliance with regulations and publisher policies to maintain trust with platforms and audiences.
5. Responsive Display Ads – The Emerging Standard
In modern display advertising, Responsive Display Ads are increasingly popular due to their adaptability across formats and placements. Instead of manually designing multiple creatives, marketers upload assets (images, videos, logos, headlines, descriptions), and the system automatically assembles and delivers optimized display ads across websites, apps, YouTube, and Gmail.
Key advantages of responsive display advertising include:
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Native-like appearance that blends seamlessly into page content, reducing intrusiveness.
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Significant time savings in creative production—especially beneficial for SMBs.
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Performance optimization through automated testing, selecting combinations with the best CTR and CPA.
With these strengths, Responsive Display Ads enable large-scale reach while maintaining smooth user experiences—ultimately enhancing overall display advertising effectiveness.
Conclusion
When optimized correctly, display advertising not only expands brand reach but also improves measurability, cost efficiency, and meaningful engagement. To stay ahead, modern marketers must continuously adopt new technologies, refine creative strategies, and invest in data-driven control to lead the future of high-performance display advertising.
About SmartAds, formerly known as eClick and developed by FPT Online—one of Vietnam’s pioneers in digital technology and media. Through continuous innovation and a strong partnership network with leading premium publishers, SmartAds reinforces its leadership in elevating native advertising standards in Vietnam, while striving to become a trusted partner for brands on their journey to win customers. If you are looking for an advertising solution that optimizes both brand visibility and performance, don’t hesitate to create an account and experience campaign setup on SmartAds here.
