Chapter 4 & 5 - Draft - Review File

Table of Contents
Chapter 4: Advertising Avenues in the Digital World (Part 1): Overview & Strategy .... 3
What is Digital Advertising? ................................................................................................. 3
Evolution of Digital Advertising ........................................................................................... 3
History of Banner Ads ........................................................................................................... 3
Key advancements which have transformed digital advertising: .......................................... 4
Digital Media Buying Process ............................................................................................... 6
Direct and Programmatic Selling of Ad Inventory ............................................................ 7
Exhibit 4.3 Understanding What Is an Ad Impression and How They Are Delivered ...... 9
Demand Side Platforms (DSPs) ....................................................................................... 10
Supply Side Platforms (SSPs).......................................................................................... 10
Ad Networks & Ad Exchanges ........................................................................................ 10
Understanding Real Time Bidding .................................................................................. 11
Understanding how Auction of Ad Inventory Takes Place ................................................. 11
Role of Web Cookies in Advertising ................................................................................... 12
Types of Digital Advertising ............................................................................................... 13
Search Advertising ........................................................................................................... 13
Display Advertising ......................................................................................................... 14
Display Advertising Formats ........................................................................................... 15
Specific Executions of Display Ad Format ..................................................................... 16
Display Ad Design Specifications and Sizes ................................................................... 17
Online Advertising Targeting Options................................................................................. 17
Online Advertising Pricing Structures ................................................................................. 22
Thinking through Digital Advertising: The Strategy ........................................................... 24
Step 1: Market Analysis ................................................................................................... 24
Step 2: Integrating Advertising with Cross-Channel Marketing Strategy ....................... 24
Step 3: Determining Advertising Objectives ................................................................... 25
Step 4: Deciding the Advertising Team ........................................................................... 25
Step 5: Finalizing the Budget ........................................................................................... 26
Step 6: Creating Customer Persona & Segments ............................................................. 26
Step 7: Choosing Appropriate Campaigns ....................................................................... 26
Step 8: Measuring Performance ....................................................................................... 27
Chapter 5: Advertising Avenues in the Digital World (Part 2): Execution & Measurement
.................................................................................................................................................. 29
Creating Digital Ad Campaigns: The Execution ................................................................. 29
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© Dr. Rishi Dwesar, IBS Hyderabad, India. These chapters/content are under review stage for
consideration of publication by Tata McGraw Hill Publications. No part of this document be
publically posted without the written consent of the author and TataMc Graw Hill India Ltd.
Step 1 — Choosing Campaign Goal: ............................................................................... 30
Exhibit 5.1: What is conversion tracking and how to set it up? ...................................... 30
Step 2 — Selecting a Campaign Type: ............................................................................ 31
Step 3 — Choosing the Location: .................................................................................... 31
Step 5 — Deciding the Bidding Strategy:........................................................................ 33
Exhibit 5.4: Campaign & Ad Groups in Google Ads ...................................................... 36
Step 6A Search Ads — Targeting .................................................................................... 36
Step 7: Ad Creation .......................................................................................................... 45
Search Ads Creation ........................................................................................................ 45
Display Ads Creation ....................................................................................................... 49
Measuring Advertising Performance: The Metrics.............................................................. 53
Tools Mentioned In This Chapter ........................................................................................ 57
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Chapter 4: Advertising Avenues in the Digital World (Part 1):
Overview & Strategy
Digital advertising has been growing expeditiously. New advertising technology platforms,
advances in methods of targeting, ways to engage customers across channels, retargeting
possibilities provides marketers endless opportunities to engage customers through digital
advertising. These advancements and rapid changes have made advertising even more
challenging, and when executed poorly, they can lead to low engagement and irritated buyers.
With advancement in digital marketing technologies, it’s now possible to zero in on prospects
based on specific demographics, intent and other criteria across display and social networks,
search engines, and more.
The aim of this chapter is to provide a thorough overview of the digital advertising landscape
and help you understand how to create well targeted and engaging campaigns across digital
marketing channels.
What is Digital Advertising?

In simple words, digital advertising can be defined as the tactic of leveraging the internet and
its properties to deliver promotional ads to consumers on various digital channels. These
channels can include online news, content and other publisher websites, search engines, social
networks, mobile apps and games, and any other platform on which advertisers can buy media
space.
Evolution of Digital Advertising

Digital advertising has evolved considerably since the first banner ad was released in 1994
(See, History of Advertising). Today, digital ads are almost everywhere—on websites
(including social media platforms) across the internet, on mobile devices and apps, on smart
watches, and on other gadgets that we wear. Gradually, we are seeing them on connected
billboards, digital signage and other out-of-home media, often dynamically changing the ads
based on the time of day, traffic conditions, and person watching the ad. With newer
developments like Internet-of-things (IOT), technology is already present to advertise across
electronic devices, and is likely to become mainstream in near future.
History of Banner Ads

It was on October 27, 1994 when HotWired.com (a website owned by Wired Magazine)
published 14 banner ads, including the famous ad from AT&T (See Image Below). Each ad
measured 468 pixels wide and 60 pixels deep. And legend has it that the very first one of these
ads was from AT&T. The ad asked, “Have you ever clicked your mouse right HERE? You will.”
The ad opened up a synchronized page, which read, “You did! Now let's see what else you'll
do.” Since then the banner ads and related technology has significantly evolved. The first ad
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server was launched by NetGravity in 1996, Google AdWord (Now Google Ads) showed first
ad in 2002. While YouTube came up with first ad in 2005, followed by Facebook which started
advertising in 2007.
The First Banner ad by AT&T
These developments might look overwhelming, as just over two decades ago, pages with
banner advertisement opened at a snail’s pace, dial-up internet connections being common.
Today, TV is no longer the primary media, as we spend hours looking at mobile phones and
other smart devices, and many times using multiple devices simultaneously. Digital advertising
has evolved alongside consumers’ insatiable appetite for online content.
Key advancements which have transformed digital advertising:

Data and Targeting: Until recently, marketers primarily used demographic information to
target prospective customers. That is no more the case. The advanced data and behavioral
tracking capabilities of ad platforms provide marketers umpteen options to show
advertisements to granularly targeted niche segments. Today marketers can target based on
precise location, behavior, content viewed, industry, segment/persona, browser, device, and
more. Combined with marketing automation tools, social media sites, mobile apps etc. one can
get even more personalized with ad content and target consumers in real time.
Rich Media Formats & Native Advertising: Advertising formats have grown sporadically
over the years. In the past ads were offered merely in text format, today there are endless
options from static image ads in various sizes, ads with interlaced images (GIF), to video ads.
Moreover, newer formats offering dynamic and interactive capabilities are more likely to
engage the audience. Another leap in advertising has been the introduction of Native
advertising. Unlike the past, where digital ads have often been intrusive and annoying -
specifically pop-up and interstitial ads- native advertising is designed to look and feel like the
content that exists on the page. Thus, Native ads are much less intrusive and provide seamless
experience to the viewers. Exhibit 4.1 discusses native advertising in detail.
Programmatic Advertising: The advancement of digital marketing technologies have made

it possible for advertisers to buy ad inventory programmatically. Programmatic advertising
uses complex technologies which help the marketer by automating various functions such as
inventory buying, ad placement, and optimization of advertising. In other words, it makes
advertising more convenient and efficient for marketers. It is estimated that in the US
advertisers spent $60 billion on programmatic display advertising in 2019, and by 2021 almost
88 percent of all US digital display ad dollars will transact programmatically. 1 Before the
introduction of programmatic advertising, advertisements were sold and purchased manually
1
https://www.emarketer.com/content/us-programmatic-ad-spending-forecast-2019
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by humans, which was expensive and unreliable.2 The section, Understanding Digital Media
Buying discusses programmatic advertising further.
Exhibit 4.1: What are Native Ads?
Native advertising can we referred to any advertising format which match the look, feel and
function of the media format in which they appear. In other words these ads seamlessly blend
within the editorial or other content on the page, and are often difficult for viewers to
differentiate as advertisements. A good example would be Facebook sponsored ads, which
appear instream (referred as Facebook feed). Given that this format of advertising can often
be difficult and at times to be recognized as advertisements, industry watchdogs, such as the
(FTC) Federal Trade Commission and the Interactive Advertising Bureau (IAB) regulate the
use of native ads from time to time to ensure that consumers are not misled. It is estimated
that native ads constitutes of more than 60 percent of digital spending, majority of which is
on various social media platforms.i
IAB’s recent guidelines issued in 2019 list native ads into three primary types:
In-Feed/In-Content Ads: These includes ads on content, commerce and social feeds. As
the name suggests, they appear within the main stream of editorial or user generated content
and mimic the surrounding site design and aesthetics. Usually, the word sponsored appears
in these ads.
Content Recommendation Ads: These ads appear via a “widget’ and generally appear
alongside or below the publisher ad. On click, these ads redirect the user on the advertiser’s
landing page. Below is a content recommendation ads from a popular native advertising
platform.
Branded/Native Brand/ Native Content: This ad format is distinct from other forms of
native advertisements and is paid content that is published in the same format as editorial
content. The content is generally created by the publisher’s content teams themselves and
has a disclosure stating that it is paid content. Thus, these ads are rendered on a page which is
2
https://digiday.com/media/what-is-programmatic-advertising/
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hosted, and served by a publisher on their own website. At times, branded/ native content ads are
promoted by In-Feed or Content Recommendation.
Cross-Channel and Device Interactivity: Another phenomenal transformation is in the

manner in which digital advertising has enhanced possibilities to plan and execute cross-
channel communication. The possibility to integrate data across platforms has enabled
marketers to execute interactive communications across various digital channels. By
leveraging data on one channel to inform another channel or device, customers can be provided
seamless experience. Illustratively, a customer may start selecting a pair of jeans on an e-retail
website, and may end-up buying the product on the mobile app of the same retailer on her
mobile.
Source:https://www.fipp.com/news/insightnews/chart-of-the-week-what-growth-look-digital-
arena
Digital Media Buying Process

Digital media buying is the process of purchasing placements (also called
impressions) for advertisements on websites, apps and other digital platforms. The
task is often accomplished with the help of real-time bidding (RTB), where the
software places a bid and negotiates to buy an impression from various publishers
for different placements on behalf of humans. There are primarily five main parties
involved in this process: the advertiser, the demand side platform (DSP), the ad
exchange, the supply side platform (SSP) and the publisher. When advertising is
accomplished using this process, it is referred to as programmatic advertising. Given
that many complicated technologies and elements are involved, it may look very
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overwhelming, thus, it is necessary to understand all the components one by one.
Let’s understand it further.
Direct and Programmatic Selling of Ad Inventory

As discussed in Chapter 2, publishers majorly monetize (earn revenue) their business by
allowing advertisers to showcase their ads in various formats across their website and other
platforms. Publishers sell this ad inventory in two different ways, i.e. Direct and Programmatic.
In direct ad inventory sales (also called as preferred deal) negotiations to buy ad inventory to
advertisers by in-house sales team. Thus, the inventory is sold manually. Preferred deal makes
it possible for publishers to sell their premium media inventory at a negotiated fixed CPM to
selected advertisers. However, if advertisers bid on a preferred deal impressions, they are no
longer eligible to bid on the same impression in the open (programmatic) auction. Whereas in
programmatic auctions, the publisher puts its unsold inventory up for sale through ad networks
and SSP. We discuss this in detail in the next section. Both Direct and Programmatic have their
Pro and Cons, which are discussed in the Exhibit 4.2 below.3
Exhibit 4.2: Difference in Direct Vs. Programmatic Ad Sales

Basis of Direct Ad Sales Programmatic Ad Sales
Difference
Method Manual Automated
It is a very involved process and As this runs on technology, a lot of
needs constant human effort in terms manual work, including
of finding clients, negotiating prices communication, is drastically
and other terms. This needs reduced. This saves time, money,
significant money and time and reduces chances of human
investment. error.
Sales More Accurate Less Accurate
Predictability Direct sales are predictable as ad As the majority of programmatic
inventory is sold in advance and advertising is executed with real
delivered in future. This makes direct time bidding (RTB), several
sales “guaranteed” while also auctions (even thousands) are
“guaranteeing” inventory for placed for every impression. Thus,
advertisers. it is less reliable and more dynamic
as compared to direct sales.
Pricing Fixed Dynamic
Usually advertisers buy in bulk in In programmatic buying the
direct buying, the pricing is almost auctions take place for every
always a fixed CPM. Moreover, as impression. Thus, publishers
publishers are given guaranteed receive different prices for every
inventory, often for selected impression depending on the
placements, they charge higher competition.
prices.
Control High Low
3
https://blog.ad-juster.com/differences-between-direct-sold-and-programmatic-advertising/
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Publishers have a higher degree of Although ad networks and supply
control as they can choose which side platforms (SSP) give control to
brands or industries they would like publishers to restrict advertisements
to sell their ad inventory. from certain industries (Alcohol,
Adult content), the control they can
exercise is limited in comparison to
direct sell.
Programmatic Advertising
Programmatic advertising is a method of media or ad buying that uses technology to automate
and optimize the ad buying process in real time. It uses various platforms like the Demand Side
Platform (DSP), Supply Side Platforms (SSP), Ad networks and exchanges, and of course
participating publishers and advertisers using these platforms. The process streamlines
otherwise complicated processes and consolidates efforts of advertisers by allowing them to
use only one technology platform. These platforms provide advertisers precise control to target
audiences based on their interests, timing, location, budget etc. The algorithms at the back-end
filter ad impressions derived from consumer behavioral data, which allows advertisers to define
budget, goal, and attribution and optimize for reduced risk while increasing ROI.4
Zowie Skelton (2015)5 explains:
“When a consumer visits your website, the browser communicates with an ad server – the
technology that places adverts on websites. The server then sends a message to an ad exchange
with information about that user, such as the IP address, location and details of the website
the consumer is visiting. A web page has space on it for ad space which is available for real-
time bidding. Information about the web page, and the user viewing it, is passed on to an ad
exchange, a platform which then auctions off the available ad space to the highest bidder. As
an advertiser, you – or your media buyer – send a bid electronically to the ad exchange via a
demand-side platform (DSP).”
Thus, programmatic advertising not only makes transactions efficient and more effective, it
ultimately serves targeted and relevant experiences to consumers. Programmatic advertising
has been growing sporadically, and today the majority of ad inventory is transacted
programmatically. Figure 4.1 shows how different platforms are connected and involved in the
programmatic advertising process. To further understand programmatic advertising, we next
look into each of these platforms and the role performed by them.
4
https://www.iab.com/insights/glossary-of-terminology/
5
Skelton Z. (2015) How to power up with programmatic marketing. Digital Doughnut, 24 June
at: www.digitaldoughnut.com/articles/2015/june/how-to-power-up-with-programmatic-marketing
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Figure 4.1: Understanding How Programmatic Advertising Works
Source: https://www.pmg.com/blog/understanding-the-basics-of-programmatic-advertising/
Exhibit 4.3 Understanding What Is an Ad Impression and How They Are

Delivered
An Impression is said to be delivered when an advertisement or any other form of digital media
renders (is shown) on a user's screen. Technology has made impression tracking easy and robust
in digital marketing, as compared to offline advertising. For example, it is difficult to accurately
measure the number of impressions a billboard would have received, unlike digital advertising
where every impression is tracked, counted and sold in terms of cost-per-thousand (CPM)
impressions It is important to understand that an impression rendered is not equal to an
advertisement seen (viewed), as we humans are subconsciously programmed to ignore most of
marketing stimuli. Though, it is impossible to examine if an individual is actually seeing the
advertisement (unless someone uses eye-tracking technology), publishers usually provide two
metrics for impressions: served and viewable
Though advertisers can buy either impressions or clicks through a demand side platform, in
programmatic advertising publishers sell only impressions and not clicks to the supply side
platform.
Served Impressions
The usual standard for counting online impressions is based on ad impressions served i.e.
whenever an ad file is accessed, transmitted and rendered, an impression is counting. It ignores
other things like the advertisement was visible on the screen or not etc. Thus, served impressions
are counted, for example, even if an advertisement is rendered in the lower-fold of a webpage,
despite the user not scrolling that part of the page. Thus, counting impressions on this basis still
has the 'billboard' problem, where the nearest metric to measure impression is estimating passing
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traffic.6 Even if a vehicle or building blocks the view to the billboard, an impression would still
be counted. Thus, a slightly better metric to measure impressions delivered is viable impressions.
Viewable Impressions
This standard of counting impressions takes into consideration possible reasons which prevented
a user from actually viewing an ad. This could happen due to Ad-blocking software, screen
resolutions not apt for the ad to appear, users scrolling down before the ad has loaded or not
scrolling down where the ad was actually rendered. For example Google Ads provide an ‘Active
View’ metric to advertisers which provides viewable impression data in compliance with
industry standards developed by the Media Rating Council (MRC).7 An active view for display
ads is counted when at least 50 percent of the ad area is visible on the screen for at least 1 second.
For larger ads (242 x 500 pixels or more) an impression is counted when at least 30 percent of
the ad area is visible for at least 1 second.8 However, different standards are followed for video
ads.
Demand Side Platforms (DSPs)

DSPs are third-party software that allow advertisers to purchase, analyze and manage ads
across many ad networks from a single interface. They are connected with ad exchanges and
network and purchase placements for the advertisement orders placed in an automated and
efficient manner. They ensure ads are being shown to the precise audience targeted by the
advertiser. Moreover, they offer additional tools which analyze ad performance, and avoiding
fraudulent sites that generate traffic with bots, wasting advertisers’ money. Some of the biggest
DSP’s in the world include Google’s Double Click, Adobe Media Optimizer, AppNexus etc.
Supply Side Platforms (SSPs)

Supply side platforms (also referred to as sell side platforms) on the other hand allow publishers
to manage and sell their inventory in the ad exchange to interested buyers and earn revenue.
As we discussed, publishers are the websites or other content-creating platforms that consumers
visit. Publishers have reserved ad spaces on the pages, which show up (Refer, Exhibit 4.3
above) when a visitor opens a particular page. Publishers can list these ad spaces on a SSP in
advance, and give opportunities to various advertisers to bid and compete for showing ads.
SSPs are further connected to various Ad Networks and Ad Exchanges, which in turn interface
to DSPs. SSPs provide numerous benefits to publishers, most importantly yield and revenue
maximization.
Ad Networks & Ad Exchanges

Another important role in programmatic advertising is played by Ad Networks and Ad
Exchanges. Ad Networks are companies which sell left over ad inventory - which publishers
6
https://www.matrixmediaservices.com/outdoor-impressions/
7
http://mediaratingcouncil.org/Education.htm
8
https://support.google.com/google-ads/answer/7029393?hl=en
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could not sell directly- on behalf of multiple publishers. Many of the publishers have their own
Ad Networks, for example, Google Ads give opportunities to advertisers to advertise on various
Google owned platforms (YouTube, Google Search) alongside other publishers who have
partnered with Google.
On the other hand, as the name suggests, ad exchange is a technology platform where both
publishers and ad networks can sell their ad impressions programmatically. It is very similar to
an e-trading platform for stock trading. Ad exchanges work with many seller sources (both
SSPs and ad networks) simultaneously and auction off impressions directly or through DSPs.
Refer to Figure 4.1 to understand how these entities connect seamlessly and make
programmatic advertising possible.
Understanding Real Time Bidding

Real-time Bidding (RTB) is a method of transacting media that allows an individual ad
impression to be put up for auction in real-time. It involves a server-to-server buying process
which is done through a programmatic on-the-spot auction. Thus, Real-time Bidding is a sub-
part of programmatic advertising. RTB operates similar to how financial markets operate.
When a bid for a particular ad spot is won, the advertiser's ad is immediately shown on the
publisher's site. Thus, in this process multiple advertisers and multiple publishers depending
on the demand and supply are able to buy and sell ad impressions. In a way, it is a win-win
situation for both advertisers and publishers as it leads to reduced media wastage, greater
transparency, improved ad performance and a healthy yet competitive advertising environment.
Understanding how Auction of Ad Inventory Takes Place

Programmatic ad auctions are used to select ads that finally appear on the publisher’s page, and
ultimately determine how much a publisher can earn from those ads. Thus, the ads that we see
on a website, app, or other digital property are the ones that have won in an auction. Various
ads pay different amounts of money, depending on various factors such as how much an
advertiser has bid for the ad.
The way ad auctions are designed ensures that publishers earn the maximum possible revenue
for the ad space. Usually, if the competition to advertise on a particular spot is high, advertisers
are forced to pay higher, which can translate into higher earnings for the publisher.
Programmatic ad auctions are of two types: Open Auctions and Private Auctions.
Open auction is the official term for real-time bidding (RTB). The ad inventory prices are
decided in real-time through an auction and any publishers or advertisers can participate.
Usually, publishers place their media inventory in an ad exchange at a specific minimum cost
per mille (CPM) price and advertisers bid against one another for the available media that they
desire. The highest bidder wins the impressions.9
While private auctions are similar to an open auction, except that the publishers restrict
participation to auction selected advertisers only. Publishers may invite or enable specific
9
https://www.aarki.com/blog/differentiating-between-open-auction-private-auction-preferred-deal-in-
programmatic-advertising
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advertisers to apply for an invite to participate in private auctions. Thus, advertisers can bid for
the available media inventory only if they are invited to do so. Similar to open auctions,
publishers have the right to list the inventory at specific minimum CPM, and the highest bidder
wins the impressions. However, bids on ad requests eligible for private auctions may compete
with bids from the open auction either (i) concurrently if enabled by the publisher or (ii)
subsequently if private auctions do not fill the ad requests. Moreover, it is important to note
that publishers usually sell impressions based on CPM model (cost per thousand impressions)
in both direct and auction selling and not the clicks.
Role of Web Cookies in Advertising

A web cookie (also called as Internet cookie, browser cookie, or just cookie) is a small
message given to a web browser by a web server. The cookie is used to identify a user and
create customized web experiences. Cookies have an important and critical role in digital
marketing. It could easily be said, if cookies didn't exist, digital marketing wouldn't have
come this far. Cookies can be first-party or third-party. The primary difference between first-
party and third party cookies is that the first party-cookies are set by the publisher’s
webserver which the user has visited, whereas, third party cookies are usually set-up by third-
party servers such as Ad-technology platforms which they help of code on the website
visited. Advertising platforms use these cookies to track the pages an individual has visited,
links clicked, ads a user is exposed to etc. They usually add tags to pages so that they can
track a user visiting various pages across websites and devices. Based on this, they are able to
build profile of a user to show them targeted advertising. Thus, third-party cookies are used
for ad retargeting and behavioral advertising.
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The Life on an Ad
Source: https://www.amobee.com/research-insights/the-life-of-an-ad/
Types of Digital Advertising
Search Advertising
Search advertising (also referred as paid search) is a method of placing online advertisements
on the search engine results page. The most popular SEM platforms include Google, Bing and
Yahoo. These ads usually show up on the top and bottom of organic listings and are triggered
when users enter a search query which is the same or similar to the keywords targeted by the
advertisers. The ability of search ads to show up only when a user searches for particular
keywords makes them very attractive. This is because unlike display advertisements which are
push in nature, search ads only appear when a user has intent, and thus are considered pull in
nature. As consumers often use search engines to identify and compare products before making
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a purchasing decision, opportunity to show consumers with advertisements tailored to their
immediate buying interests encourages consumers to click on search ads. Moreover, advertisers
only need to pay for search ads when the user clicks on the ads. Unlike Display ads which can
also be purchased on impression basis, search ads are based only on a pay-per-click model.
Thus, search ads are one of the most dependable types of digital advertising. However, search
ads are only text based and mostly consist of a heading, sub-headings, and site-links. Thus,
unlike display ads they are less attractive, and may not be able to generate desired attention for
some of the product categories. The nuances involved in planning and executing search ad
campaigns are discussed later in this chapter.
Figure 4.2: Percentage Media Spending Across Different Ad Types
Display Advertising
Display advertising is another very large piece of the advertising pie apart from search ads.
Figure 4.2 shows that display advertising (Including Banner ads and Video Ads) represented
46 percent of the total advertising revenue. The great thing about display advertising is that it
offers a wide range of diversity. There are a multitude of formats and channels to choose from
which can attract audiences across devices. In its most basic form, display ads contain images
and text. Nevertheless, flash and video ads are also part of the display advertising world. The
main difference between display ads and search ads is that display ads do not show up on search
results. Display ads at times are also called banner ads, but generally the term display
advertising includes both video and (static and animated) banner ad formats. Many of the
display ad formats are affordable as well as simple to implement, but some of the formats such
as video ads can need a great deal of creative execution.
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One can choose individual websites, social media websites, news websites, blogs etc to show
display ads. Unlike search ads, display advertisements are push in nature. That means, it is not
necessary that the viewer seeing a display ad necessarily has interest in that product or brand,
and thus, consumers often find display advertising interruptive (Add some research).
Nevertheless, by using advanced targeting options offered for display advertising, these ads
can be made useful for most of the viewers. Moreover, retargeting display ads can prove very
useful for companies in bringing back valuable prospects who visited the website but did not
provide contact information or left the checkout midway (we discuss this later).
There are many types of display ads. We discuss some of the most popular types in the next
section.
Display Advertising Formats
Static Display Ads

These are the most common of the display ads. These typically use
an image and have some copy, brand logo, and a clear call-to-action.
As these ads are static, there is no movement and they can be placed
across various channels and devices. Among other display ads, these
are least expensive to create, and comparatively need less expertise,
which makes them scalable. Display ads can be inserted in various
sizes across websites. We discuss the common ad sizes later in this
chapter. Below is an example of Static Display Ad from Amazon.
Example of a Static Display

Advertisementii
Animated Display or Rich Media Ads (Flash, GIF and HTML 5)

These ads use motion, animation, interactive (clickable) elements and often audio to increase
the engagement of the ad. These ads are very popular and can be created using various
technologies. Mostly these ads are of 15 to 30 seconds in duration and are either looped or end
with a suitable CTA. While the GIF (Graphic Interchange Format) ads can only include
multiple images, both Flash and HTML 5 can include both images and audio. Flash format was
acquired by Adobe in 2005, and is still a popular format. However, to play flash files most of
the browsers need additional add-ons, while natively Apple’s iOS doesn't support Flash format.
Off late, HTML5 are replacing flash ads, due to several advantages they have over Flash ads.
First, just like Flash ads, HTML 5 ads can include images, audio, video and interactive elements
and are supported by all modern browsers. Moreover, HTML 5 is also responsive/adaptive,
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meaning that ads designed in this format are adaptive and look good across any browser, OS,
or device.
Video Display Ads

Video display ads make display ads much more interesting and take them to a different level.
Usually, video ads have extremely high engagement rates. Moreover, with ad networks like
Google enabling video ads for responsive display ad formats as well, advertisers can use video
ads across platforms with great deal of automation. As consumers increase to engage with more
video content online, and faster internet speeds, video ads are likely to gain even more
popularity in the coming years.
Native Ads
As already discussed earlier, native advertising is a popular display advertising format. Unlike
other formats of display advertising which usually stand out and look different from editorial
content, native ads blend within the editorial content or overall web-page aesthetics. As regular
banner ads are prone to banner blindness (i.e. conscious or sub-consciously ignorance of
banner-like information, believing that they are advertisements).
Specific Executions of Display Ad Format
Pop-Up and Pop-Under Ads

Rather than being a different format of advertising, these are specific executions of various
display ads. Thus, pop-up and pop-under ads can be executed as both banners and videos,
former being more common. As the name suggests, these ads pop up, or under the web page
being viewed by the user. While one sees the popup straight away, a pop-under would only be
visible once the main window is closed. During the early years of its use (2004 onwards), these
ads opened in a new window often smaller in size. But with the advent of ‘pop-up blockers’,
publishers have found new and innovative ways to use this advertising format. Now these ads
usually appear in an in-window overlay. To decrease distraction, sometimes, these ads appear
after some time of browsing activity. Some publishers also use scroll pop-up ads which show
up after the visitor has scrolled to a particular place on the website. Both pop-up and pop-under
ads are considered controversial, as pop-up ads restrict the view to the main content, while pop-
under ads usually open without the knowledge of the viewer.
Interstitial Banners Ads

Interstitial ads are full-screen ads that cover the full interface of the site or app where they
appear. Usually, these appear between pages when the user is navigating from one page to
another. What differentiates them from other ad types, like pop up, native, and banner ads is
that they take over the full view. Often, the advert can be closed or may force the user to stick
around for a few seconds, after which they disappear on their own. If executed well, they can
feel like a natural transition points between webpages and activities on apps.
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Display Ad Design Specifications and Sizes
Display ads have various design specifications and sizes which often differ for various ad
networks such as Google, Facebook, and LinkedIn. The choice of correct size depends on the
network on which one is supposed to advertise. Choosing the ideal advert size should also be
considered as an important branding decision, as the impact and information which can be
effectively displayed largely depends on the size of the advertisement. It is also important to
take into consideration the format and the device on which the advertisement will appear.
Animated ads can show more information as compared to static banner ads, and even small ads
on mobile phones can carry more information due to display’s proximity to the eye. We look
into some key aspects related to both design specifications and discuss some of the common
sizes used for display ads. Adhering to the requirements ensures that the ad has maximum
impact and minimum risk of losing money.
Online Advertising Targeting Options

One of the most critical aspects of online advertising is targeting appropriate prospects.
Appropriate targeting helps advertisers to communicate with the right audience, at the right
time, with the right message. The possibility of targeting niche segments in digital advertising
allows advertisers to personalize and deliver a lot more relevant communication. Moreover, it
provides advertisers a way to segment audiences, test various campaigns, and optimize for
improved results. Nonetheless, the extent to which a particular user can be targeted depends
upon the information the user has shared in the past, how much of it is still accessible by ad
networks and websites, and the extent to which user has given the consent to be targeted. Given
that companies (such as Google) are increasingly giving users options to opt-out of tracking,
websites are taking user consent to enable the cookies, increased usage of ad-blockers and do
not track software, targeting users is becoming increasingly complicated. In this section below
we discuss some of the key targeting options provided by major ad networks like Google,
Facebook and LinkedIn. However, it is important that targeting options vary from platform to
platform and specific ad network may not be able to provide all the targeting options.
Demographic Targeting
This is one of the oldest targeting options available to online advertisers. It lets the advertiser
choose specific demographics including age-group, gender, at times income, religion, race etc.
Some advertising platforms (such as Facebook) also provide geographic targeting under the
demographic targeting module. Demographic targeting is specifically useful for products
which tend to appeal to specific age groups or genders. Moreover, demographic targeting with
appropriate messaging strategy can be used to build awareness for an audience belonging to a
particular demographic. Moreover, one can use one of more targeting methods along with
demographic targeting. This way one can be extremely specific about who sees their
advertisements and achieve advertising objectives tied to a particular audience. An example of
such targeting would be: 30-35 year old males (demographic targeting), in New Delhi, India
(geographic targeting) and likes to travel (interest based targeting).
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Placement Targeting
This targeting option allows advertisers to show advertisements on specific websites and is
particularly helpful when one knows the websites company’s potential customers visit. Usually
reputed websites which are actively visited by customers are the preferred choice for placement
targeting. These may include popular news websites, health and weather information websites
etc. his targeting option is specifically useful for display ads, and not truly applicable for search
advertising. Also, this targeting option is helpful if the advertiser wants to reach a very niche
or industry specific audience. For example, a ventilator manufacturer may find it appropriate
to advertise on a website which covers the latest development around respiratory diseases in
order to target pulmonologists.
Though this targeting option may seem familiar to contextual targeting, in reality it is different.
In contextual targeting one chooses a particular context (e.g. Sports-Football) to show the ads,
which may appear on any website having content related to the particular context. Whereas, in
placement targeting one chooses the placement (e.g. NYtimes.com) and the ad can appear
across any context on the particular website. However, it is possible to combine both targeting
options on most of the advertising platforms.
Behavioral Targeting
Behavioral targeting allows advertisers to target customers based on their recent behavior
across the web, mobile apps and more. Various websites, specifically publishers, use cookies
(including third party cookies) and collaborate with ad networks to collect and share
information about user-initiated actions such as searches, time spent on particular sites/pages,
content views, clicks, purchases, and more in the past. These profiles are generally anonymous
and do not include personally identifiable information (PII).10
This information is useful for advertisers in targeting users who are more likely to be interested
in their products, and thus are more likely to be influenced by such advertising. For example,
if a consumer was frequently searching for travel destinations in Europe, or spent ample time
to read an article on vacation in Europe, the targeting system would store such behavior, and
an Europe based hotel company can use this information to target this particular user, and show
their hotel ads when the user visits any website which has partnered with that particular ad
network.
Behavioral targeting is one of the most advanced forms of targeting options available to
markets today. This is due to two reasons. First, due to advancement of technology, increased
collaboration across platforms, and availability of big data - which makes it possible to store
more customer data-, behavioral targeting has become a lot more specific allowing advertisers
to show much more personalized ads.11 Second, consumers can mostly identify a behaviorally
targeted ad because publishers and ad networks are increasingly adopting icon’s such as
AdChoices when an ad is behaviorally targeted. Nevertheless, consumers often find behavioral
targeting as breach of their privacy and feel advertisers are getting too eyed into their personal
space. Due to this reason, behavioral targeting is often under scanner from regulatory
10
11
Summers, C. A., Smith, R. W., & Reczek, R. W. (2016). An audience of one: Behaviorally targeted
ads as implied social labels. Journal of Consumer Research, 43(1), 156-178
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watchdogs such as the Federal Trade Commission. For example, companies such as Facebook
and YouTube have been heavily fined for sharing personal data with third parties, which have
used this data for illegal behavioral targeting among others.12 However, when done
legitimately, behavioral targeting can be very effective.
It is important to note that behavioral targeting is a broad term (also referred as online profiling,
behavioral advertising etc.) and targeting method, and is the basis of many other specific
targeting methods such as Interest Based Targeting and Retargeting which are discussed ahead.
The AdChoices Logo

Geographic Targeting
AdChoices is a self-regulatory
advertising program for online As the name says, geographic targeting
interest-based advertising that lets advertisers target users physically
exists across various countries present in a particular geographic
globally. The program mandates location or interested in a particular
participating advertising companies to establish geographic location. The location data is
and enforce responsible privacy collected by websites and ad networks
practices for interest-based advertising, which using various methods, including
gives viewers enhanced transparency and location data from internet service
control. Companies are required to adhere providers (ISPs), GPS in users mobile
various guidelines and principles that are phones, user check-ins etc. While interest
enforced by accountability programs. Whenever in a particular location can be gauged if
an ad is being shown by the participating the user searched for a particular location,
company, the AdChoices logo is shown for example, ‘Budget Hotels in Miami.’
automatically. The presence of icon on a
particular ad reflects interest-based advertising
data is being collected or used. On clicking the The extent (preciseness) to which a
icon, the users can learn about ad or a website's particular ad network can track users,
collection practices, and also opt-out of such depends on its capabilities and various
targeting. other factors. For example, Facebook
allows the marketer to drill down to a
specific location and distance radius.
Interest Based Targeting

(The Ad Choices Logo) This type of targeting allows advertisers
to target customers whose past online
behavior shows they are interested in a specific product category. For example, if a person
visits several websites containing information on parenting, she/he would be tagged against the
‘Parenting’ interest group. Hundreds of such interest groups are created, which can be used by
advertisers to target specific audiences. The data is modified from time to time, based on the
recent activity of the user (generally within 3 to 6 months). Interest based targeting is a specific
type of behavioral targeting. Most of the publishers allow users to see their advertising profile
(to which interest groups they have been tagged to, along with other information), while some
allow customers to tailor their interests so they can see more relevant ads. Figure 4.3 shows
12
https://techcrunch.com/2019/07/24/facebook-settles-with-ftc-5-billion-and-new-privacy-guarantees/
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Google advertising profile, which also contains interest categories of that individual, based on
his browsing history.
Figure 4.3: Google Ads Interest Profile
Content or Topic Targeting

Content targeting (also referred as topic targeting or contextual targeting) allows advertisers to
place their advertisement across a particular type of content or topic. Most of the publishers
provide the core theme of the website and of specific pages (in form of keywords and tags) to
the supply side platform. Advertisers can then use this information to place their ads across a
specific topic. This pairing helps advertisements to appear on relevant publications, blogs and
websites. Moreover, advertising in context similar to the ad content is found to be more
effective.13 As discussed earlier, in contrast to placement targeting (which lets the advertiser
show ads on a website of choice), content targeting lets advertiser show ads of a particular
category across websites having similar content. Thus, it is a good way for advertisers to get
exposure on a wide variety of sites that are relevant. Content targeting is commonly used to
target display ads and is combined with other targeting techniques to make it even more
effective.
Keyword Targeting
Keyword targeting enables marketers to target audiences by specific keywords and phrases.
Both display ads and search ads can be targeted through keywords. But when display ads are
targeted through keywords, we refer to it as topic targeting. However, keyword targeting for
13
Yeun Chun, K., Hee Song, J., Hollenbeck, C. R., & Lee, J. H. (2014). Are contextual advertisements
effective? The moderating role of complexity in banner advertising. International Journal of Advertising,
33(2), 351-371.
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search ads directly targets the search
queries an individual submits to a
Tip! search engine. Thus, keyword
A user writes a ‘Search Query’ on a search engine, targeting is the primary targeting
while the advertiser targets through ‘Keywords’ method for search ads. An advertiser
though both are related, they are fundamentally provides a list of keywords which are
different from one another. relevant to his or her particular
business, and ads are only shown
when a user searches for the same or similar search query.
As discussed in Chapter 2, the search engine result page shows relevant search ads and organic
links. Thus, search ads appear only when one or more advertisers are targeting keywords
related to the user query. The extent to which an advertiser is willing to target search queries
similar to keywords can be decided by using Keyword Match Types option provided by popular
search advertising platforms such as Google and Bing Ads. Keyword match types allows
advertiser to target either more generalized or specific search queries. The next chapter
discusses this in more detail. Moreover, all most all popular search engines provide advertisers
with tools through which marketers can enrich (find more) their keyword targeting list, get
estimated bid prices, search volume and industry competition. For example, Bing’s tool is
called as ‘Keyword Research Tool, while Google calls it as ‘Keyword Planner.’ Chapter 5
discusses how one can make use of this tool while executing search ads at length.
Lookalike Targeting
Lookalike targeting is relatively a new targeting option, and was debuted by Facebook in 2013.
It lets advertisers find and target potential customers who are likely to share similar interests
and behaviors with that of existing customers. The advertiser needs to provide a list of existing
customers (called seed list), preferably with some homogeneity, and the ad network anatomizes
these customers and their user profiles to find the commonalities with other audiences with
similarity tastes, preferences and behavior, and that’s how the name comes ‘Lookalike
Targeting’. In this way, one can reach highly-qualified leads who otherwise could be difficult
to identify and target. Multiple data sources can be used to create seed lists, including: Email
address, phone numbers, customers who have purchased products in the past, or have viewed
specific pages on a website for a desired period of time.14 Today, all major advertising networks
such Google Ads, LinkedIn Ad, Outbrain etc. allow lookalike targeting. This is one of the more
advanced targeting options and requires a sizable existing audience list. For example, Facebook
recommends a seed audience list of at least 1,000 to 50,000 users from one country to provide
a considerable lookalike audience.15 Moreover, there is a limit to the extent to which one can
find a lookalike audience, which depends on the size of initial seed.
Retargeting
Retargeting is another, relatively recent, and very effective targeting technique. Retargeting
(also known as Remarketing or Behavioral Retargeting) is the tactic of serving targeted ads to
people who have already visited or taken action on a particular website. Remarketing is done
14
https://blog.ladder.io/ecommerce-lookalike-audiences/
15
https://www.facebook.com/business/help/164749007013531?id=401668390442328
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with the help of a JavaScript tag (known as a pixel) which places a cookie in the user’s
computer when they visit the company's website. The advertiser can later use the ad platform
to serve ads (retarget) to the specific individuals who had earlier visited the company’s website,
apps etc. but left without completing the desired action (usually filling the form or purchasing
product). The advertising platform uses the anonymous identifier (stored in cookie) provided
by the advertiser to show ads to these individuals when they visit any of the websites within
the ad network.
Given that retargeting targets prospects who have already visited the website and advertiser
can even track their particular activity (pages visited, links clicked, time spent etc.) at an
individual level; remarketing ads can drive the customer back into action by showing them
something they are interested in. These ads can not only remind the customers what they looked
at, but also increase the brand recall, moreover by offering specific offers these ads can be very
effective in luring and winning customers. Some studies show that retargeting ads are likely to
be clicked up to 10 times more than regular ads.iii
Retargeting can be done for both display ads and search ads. When done for search ads,
advertisers can use Remarketing List for Search Ads (RLSA) which allows tailored search
campaigns for users who have previously visited the company's website, mobile app or specific
pages.
Given that there are so many targeting techniques, even more than discussed above, using
appropriate targeting techniques in digital advertising can often be challenging. It not only
requires experience, but marketers often have to test and retest to find out what works best for
them. Moreover, with advancement of technology, newer targeting techniques are being
developed from time to time. Nevertheless, it is important for the marketer not to get too
overwhelmed by so many targeting options. Also important to ensure that targeting is not too
narrow that it limits the reach, which would make it difficult for the ad network to deliver
ample impressions and can also reduce the return on investment. While creating the advertising
campaign, ad networks provide metrics with various estimates such as expected reach,
impressions, click through rate, cost per click and these figures vary depending on the targeting.
It is worthwhile to be cognizant how these estimates relate to the chosen targeting options.
Some of these nuances are explained in the next chapter, while discussing how digital
advertising campaigns are executed.
Next, we discuss various ways in which models through which digital media can be purchased.
Online Advertising Pricing Structures

Advertising spots can be purchased based on common pricing structures that run across the
various types of ads. Though different ads have different objectives (discussed in next chapter),
the prices are often based on the same models. These pricing models are specifically used in
programmatic purchase, which is now the preferred way of buying ad inventory, surpassing
direct purchase.16 Often dubbed as performance marketing, these pricing structures enable
marketers to pay only when the desired action is completed. Moreover, the opportunity to pay
16
https://marketingland.com/the-adtech-trends-rounding-out-2019-programmatic-growth-measurement-
standards-privacy-implications-269722
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for the appropriate result reduces the risk for marketer and ensures advertising money is not
wasted. We discuss these pricing structures in the next section:
Pay per Click (PPC): In this pricing structure, the advertiser pays only when the advert is
clicked by a user. The associated metric to measure to cost based on pay per click model is the
Cost per Click (CPC). Upon clicking the ad, the user reaches the advertiser’s landing page and
may end-up filling the form or buying the product. Nevertheless, the advertiser pays based on
the click regardless of the action taken by the customer.
Pay per Mille/Thousand (PPM): This pricing structure is based on impression and the
advertiser pays for every thousand impressions. Thus, the advertiser pays for every thousand
times the advert loads on the publisher’s page. The metric to measure advertisements based on
this model is called Cost per Mille (CPM) (in Latin, French and Italian, mille means one
thousand) or Cost per Thousand Impression (CPT). If required one can also calculate the cost
of a single impression, referred to as Cost per Impression (CPI). Usually, CPM rates for rich
media formats are higher than for standard display ads. One of the demerits of PPM model is
that the advertisers are charged for a “possible view” and not for a “click”, and thus it doesn't
guarantee any action from the user.
An advanced version of CPM model is dCPM (Dynamic Cost per Thousand Mille) in which
each actual bid amount charged is not limited to the exact bid amount placed. dCPM uses real-
time bidding to optimize the overall spend. For example, if an advertiser sets their dCPM bid
at $5, their DSP—an ad technology that enables marketers to purchase all types of ads in an
automated fashion—can use Real-Time Bidding (RTB) to pick up some ads for $0.50 and
others for $6.50. The dCPM pricing model relies on the DSP’s ability to analyze the value of
each ad and pay exactly what it’s worth. The overall price of the campaign is kept at or near
the bid amount, but delivers more value than a traditional CPM campaign.
Pay per Lead: Pay per lead model allows advertisers to pay for every qualified lead. Although,
mainstream ad networks (e.g. Google Ads, Facebook) does not allow marketers to pay per lead
currently, some intermediaries and referral marketing networks allow direct pricing based on
this structure. With CPL, advertisers only pay for leads or contacts that are qualified. Usually
this model is useful for marketers looking to obtain the contact information of interested
customers and then nurture them through other channels. The associated metric with this
pricing model is Cost per Lead (CPL). CPL can be calculated for campaigns using PPC or PPM
pricing structures when the number of leads acquired through such campaigns is known. This
is possible when conversion tracking is activated (Discussed in the next chapter) Thus, CPL is
more action oriented than CPC and CPM.
Pay per Acquisition (PPA): Similar to PPL, advertisements on major ad networks can’t be
directly purchased based on PPA model. Nevertheless, most of the referral marketing use PPA
based pricing. The associated metric Cost per Acquisition (CPA), reflects the cost at which the
lead is converted. Thus, CPA is also referred to as Cost per conversion or Cost per order (CPO).
Just like CPL, CPA can be calculated for campaigns based on both PPC and PPM pricing
models when actual conversions are known. However, at times, this may be difficult to know
as consumers often use multiple channels and often switch between them, making it difficult
to arrive at actual cost per acquisition. Thus, marketers use multi-channel attribution modelling,
which gives different weights to different touch-points to arrive at actual acquisition cost.
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In conclusion, it is important to note that PPC and PPM are the two primary pricing models
through which adverts are purchased online. Moreover, though these pricing structures are the
basis for bidding strategies, they are not the same as bidding. We discuss various bidding
strategies in the next chapter. We also discuss various formulas and how the above pricing
strategies are interlinked with each other and overall marketing metrics in the following
chapter.
Thinking through Digital Advertising: The Strategy

Previously we discussed various targeting strategies and pricing options one can choose when
it comes to digital advertising. In this section we look at various aspects involved in creating
overall digital ad strategy. An ad strategy is the blueprint which discusses how advertising
would be carried out to sell a particular product or service to consumers.
It is necessary to create a viable advertising strategy before the campaigns are actually executed
(discussed in the next chapter). This is a necessary step, whether the advertising is to be done
by a B2B or B2C context. It is likely that a company has multiple products, which might require
multiple ad strategies. That sounds a lot of work, but don’t fret! The steps discussed below
give common guidelines how one can arrive at advertising the strategy and make this otherwise
arduous task a little easier and organized:
Step 1: Market Analysis

Before designing any marketing strategy, it is essential to understand the market that one is
aiming to target. Mentioned below are the points that a marketer should analyse to determine
its target market and target customers.
1. Who is most likely to purchase the product?
2. How much of that market is actually interested in purchasing the product?
3. Are there already any companies offering the same product?
4. What are the marketing strategies of the competitors?
5. Are the strategies of the competitors successful? What new can be offered?
While determining the target market, it's also important to note that not all the businesses,
products or services are recession proof. Hence, it is important to take note of the current
economic condition of the market as a whole. Examine the history and major trends of the
market that surround the product or service. Investigate the probable risks and opportunities
correlating the product or service. Finally extrapolate on how well the product or service could
be received by the market. Depending on the state of the market one can tweak the marketing
strategy, or decide to design a completely new one. By having an overview of the buyer
profiles, economic state, trends and risks, one can create an advertising strategy that is better
positioned to succeed.
Step 2: Integrating Advertising with Cross-Channel Marketing Strategy

Although digital advertising is paramount, it is still one of the elements in the overall digital
marketing strategy, which is further a subset of the firm's marketing and overall strategy. Thus,
the ad strategy should integrate well with the overall marketing plan. It should be made sure
that the consumers are receiving a continuous and relevant message from the ad campaign,
across all the channels used for advertising. Tha automation technology makes it possible to
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some extent, but the marketer should make conscious efforts to ensure that all the marketing
activities, including digital marketing, brings synergy.
Step 3: Determining Advertising Objectives

It is important to establish the advertising goals as it helps in the measurement of the
performance of the campaign. The goal could be to increase the sales of the product by a certain
percentage, to enhance brand awareness, to gain a new demographic in the customer base, or a
combination of these. Also, it is important that the formulated goals meet the SMART criteria;
i.e. they are: Specific, Measurable, Attainable, Realistic and Time-Bound.
Once the goals are set up, it is easy to decide the performance metrics and determine what is
working and what is not. If particular ads or campaigns are underperforming, the strategy can
be reexamined for flaws, and rectified for future campaigns. Advertising can have multiple
roles, which may include:
1. To Getting Viewer’s Attention: The prime task for an advertisement is to get noticed.
However good a brand or offer may be, if it fails to get attention it wouldn't serve any
purpose. Thus, one should ensure the ad is catchy, and has a compelling heading. For
example, the heading "You Might Be Eating Too Much Sugar" is likely to appeal to
someone who is trying to reduce weight, and selling artificial sweetener or even to a diet
plan.
2. Prompting Immediate Action: Often one may want an immediate action, it could be to
motivate a customer to sign up for a free newsletter or to sell an early bird ticket for a
concert. Interestingly, an advertiser may be retargeting customers who have already visited
the company's website and checked a few products, and now wants them to finally buy.
To achieve this goal, the advertiser may require an alluring proposition, for example a
water purifier company may get an immediate response from an ad which says, “Just Buy
the Purifier, Leave Service on Us. Offer Closes Tonight.”
3. Building Brand Awareness: For a new enterprise or a small company’s primary objective
could just be to increase awareness about the product or service they sell, its features and
the brand name at the initial stage. Thus, the advertising should focus on that. It may be a
good idea to pay for impressions instead of clicks, as even impressions viewed would be
helpful for increasing awareness.
4. Increasing Sales and Profits: The ultimate objective for most of the advertising campaign
is to generate sales, which would lead to profits. To ensure this, one must ensure that the
advertisement is not only catchy, but also motivates customers to click on the ad. The
headline should convey a strong proposition which is meaningful to the customer. For
example, an ad with the heading, ‘Exclusive Summer Collection On Stands Only for a
Week’ with an impressive product image can motivate customers looking for exclusive
designs to click the ad and buy.
Step 4: Deciding the Advertising Team

The most important part of any advertising strategy is to structure the digital advertising team.
The importance of a quality digital marketing team can be understood by the fact that the
success or failure of the ad campaign is determined by having the right people in the team. The
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size and composition of the digital marketing team can vary depending on the resources and
needs of the company, types and number of campaigns the company is running, the products
and overall budget. In many scenarios, a company may outsource some responsibilities to an
agency as well. However, the main agenda of any campaign should be to drive desired results
by structuring an efficient team, or outsource if need be. The primary people usually needed in
a digital advertising team are mentioned in figure below.
Figure: Key People Involved in Digital Advertising
Step 5: Finalizing the Budget

A budget determines the spending limit of an advertising campaign. It can have multiple levels,
starting with the highest overall digital advertising budget, and working down into different ad
platforms and campaigns. The budget should be in sync with the goal. If the goal is to increase
traffic to the website, more budget should be allocated to campaigns with that goal. Ideally,
more budget to be allocated to campaigns types which have been more profitable in the past.
Nevertheless, it is suggested that part of the budget should be allocated to newer campaign
types, channels or targeting options. This would not only ensure the team is abreast with newer
ways to advertise, but often such campaigns deliver high ROI due to reduced competition. Plus,
there’s always something new to learn which is helpful next time!
Step 6: Creating Customer Persona & Segments

Not all customers are the same, and with digital advertising it is possible to create various
different campaigns and targeted ads, for customers with different persona. Understanding and
segmenting customers based on their individual persona is a key step in all digital marketing
activities like content marketing, email marketing, including advertising. Once the customer
persona has been created, the market should create specific campaigns for customers belonging
to different customer persona. The customer persona creation process is discussed in next
chapter.
Step 7: Choosing Appropriate Campaigns

As discussed earlier, there are multiple type of ads campaigns one can choose from when it
comes to digital advertising. It includes search ads and display ads (both banner ads and video
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ads), and various formats and sizes. The advertiser should ensure there is a proper mix of
various types of campaigns, and investment should not be dedicated to only one type of
advertising. This not only reduces the risk, but gives a chance to experiment and learn. The
different types of advertising campaign to be chosen would depend on many factors such as
goal, product type, budget, past experience etc.
Step 8: Measuring Performance

Gauging the performance of digital advertising campaigns is critical. With easy traceability
and access to data, measuring the performance of digital advertising is comparatively more
direct in comparison to other digital marketing endeavors (such as social media and email
marketing) and traditional marketing. Nevertheless, measuring the performance of digital
advertising is still challenging, specifically when the buying funnel is long or the products are
sold offline. A 2018 survey with more than 1000 SME companies as respondents, reported that
only 11.5 percent of respondents were extremely satisfied from their digital marketing (Then
AdWords, Facebook Ads, Banner Ads etc.) (See Figure 4.4). Nevertheless, it is necessary that
the company establishes necessary frameworks and metrics to measure digital advertising
performance at quick intervals and compare it with the performance of other digital and
traditional marketing activities. We discuss more about measuring advertising performance in
the next chapter and chapter 6.
Figure 4.4: Satisfaction with ROI of various advertising platforms
Source: https://www.digitalexaminer.com/small-business-marketing-roi/
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The above steps provide a detailed understanding of various activities involved in creating
digital advertising strategy. Nevertheless, in may require some other aspects and knowledge of
specific elements and settings on the various advertising platform (e.g. Google Ads, Facebook
Ads). We discuss these executory aspects of digital advertising in the next chapter.
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Chapter 5: Advertising Avenues in the Digital World (Part 2):
Execution & Measurement
The previous chapter discussed
Creating Digital Ad Campaigns: The Execution

Running digital advertising campaigns and measuring their success is equally important as
creating a strategy. The steps involved in executing digital marketing campaigns would depend
on the type of campaign and platform one is willing to use. At a broad level, one can choose
between search, display and video ads, but then there are other types of ads as well which
include native ads, product listing (shopping) ads, sponsored content ads, Inmail ads etc.
Moreover, one must be accustomed to the ad platform being used (e.g. Google Ads, Facebook
Ads, LinkedIn Ads, Bing Ads etc.), the features and options provided by the platform, the
terminology involved and the flow of activities in the platform. Nevertheless, most of the
platforms will have similar basic features, which generally include: choosing campaign type,
fixing a budget, choosing bid price and bidding strategy, choosing targeting criteria and
placements, ad scheduling, creating or uploading ads and reporting. However, given the quick
transformation, digital marketing is going through, these options and features are being
constantly updated from time to time.
In the next section, we focus on how one can execute both Search and Display Campaigns on
one of the most popular advertising platforms such as Google and Facebook Ads. Figure 5.1
shows various types of campaign types available in Google Ads.
Figure 5.1: Campaign Types in Google Ads
Source: Author’s Google Ads Account
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Step 1 — Choosing Campaign Goal:
Most of the ad platforms first ask for advertising goals, and pre-customize some of the
advertising options accordingly. These goals include options like: Sales, Leads, Website
Traffic, App Promotion etc. If one chooses App Promotion as goal, for example, the advertiser
will have to ensure the click leads to the app installation page. Some goals (for e.g. Sales,
Leads) may use optimization based on previous advertising data, to achieve the advertising
goal. For this the advertiser must have conversion tracking activated (Refer Exhibit 5.1) and
should have run adequate campaigns in the past.
Exhibit 5.1: What is conversion tracking and how to set it up?

In generic terms conversion tracking is a way for a company or brand to monitor the actions
consumers take toward the completion of a business goal. These actions can include anything
from clicking an ad, buying or putting up a product in a shopping cart, signing up for a
newsletter, downloading a content, applying a discount code etc. Thus, conversion tracking is a
way to determine the effectiveness of an advertising campaign, or other marketing activities and
as the consumers move toward conversion.
Thus, it is necessary to set up conversion tracking between the website (where the ads lead to)
and the ad network (where the ads originate from) to monitor the performance of advertising.
Different advertising platforms use different terms for this functionality, for example Google
Ads calls it as conversion tracking, while Facebook Ads call it as Face Pixel.
As discussed earlier, conversion can be tracked when a customer makes a purchase, signs up for
a newsletter, fills out an online survey or contact form, downloads an app or whitepaper, calls a
phone number from a mobile phone, and so on at the marketer’s discretion. Thus, conversion
tracking is as well useful for businesses not necessarily selling products online. Once it has been
identified what customer actions are to be tracked, it takes just a few simple set-up conversion
tracking for an advertising campaign. It involves generating a bit of HTML code on the
advertising platform which needs to be pasted into the webpage on the site that customers visit
immediately after completing the conversion (such as an "Order Confirmation" or "Thanks for
Your Email" page). This doesn't necessarily require technical knowledge and can be done by
tools provided by the advertising platforms, for example, Google Ads offers a tool called Google
Tag Management for this purpose. However, unless conversion tracking is not properly set-up,
it is not possible to know how many advertisement clicks are actually resulting in signups or
sales.
However, for a campaign with the goal as - increase website traffic, conversion tracking may
not necessarily be activated. Obviously, as no direct conversions happen just by sending traffic
to a website. So when the goal is to increase website traffic, the advertising platform would try
to optimize the click price in such a way that one can achieve maximum clicks in a given
budget, by lowering cost per click. Whereas, when the goal is to generate sales, the focus would
be on acquiring customers which are most likely to convert. Refer to Figure 5.1 to see various
goal options provided by Google Ads. These settings can be fine-tuned at a later stage, while
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choosing the bidding strategy. One can also proceed with campaign creation without choosing
a campaign goal.
Figure 5.2: Advertising Goals in Google Ads
Step 2 — Selecting a Campaign Type:

In the next step, the marketer must choose the type of campaign s(he) would like to execute.
Google Ads currently offers 6 different campaign types, the most common being search,
display and video ads. As discussed earlier, search ads appear on search engines, while the
display and video ads appear on ad networks which include various publishers which partner
with Google to show ads on their properties (websites and apps), apart from Google’s own
websites such as YouTube. How one can target, pay, and choose ad formats would depend on
the type of campaign chosen.
Step 3 — Choosing the Location:

Regardless of the campaign type (Display, Search or Video ads), the next step is to target the
geographic locations where one would like viewers to see the ads. Targeting can be done by
country, city and even by pin codes for major cities globally. Moreover, Google and Facebook
also allow advertisers to target using radius targeting, where lets one target a particular area in
a city or various cities, towns adjoining a location which has been chosen as the center. For
example, a 70 kilometers radius targeting around Delhi (Capital of India) would also target
adjoining towns like Gurugram, Noida, Gaziabad, Sonipat and Rohtak, but not farther towns
like Panipat and Karnal. Similarly, a 50 mile radius targeting around London (Capital of
England) would target the adjoining towns Reading, Maidstone, Chelmsford etc; but not
Oxford, Cambridge and Colchester which are farther away.
The Pin Mode in Radius targeting on the other hand can be used to target very precise locations
within a city. For example, a bakery located near Chancery Lane, London, may want to restrict
its advertising to neighboring blocks, where majority of its customers are present can use this
feature and advertise as less as within one mile of a particular geographic location (represented
by latitude and longitude). Moreover, if there are branches of this bakery at different locations
within London and each wants to reach potential customers within a mile, such targeting can
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also be done easily. Refer Figure 5.3 showing five precise locations targeted within London.
While Exhibit 5.2 describes how ad networks can fetch location for targeting.
Figure 5.3: Multi-Location Radius Targeting in Google Ads
Source: Author’s Google Ads Account
Exhibit 5.2: How do ad networks like Google Ads know the geographic location of users?
Depending on various Google products and services (Google Maps, Gmail, Android Software
etc.) consumers use, they may provide Google with different types of location information to
Google which is used for targeting of advertisements. Location can come from real-time signals,
like device's (Laptop, Desktop, Mobile etc) IP address or device location (Mobile GPS), and
from past activity on Google sites (e.g. search like ‘best cafe in Paris’), saved places (e.g. when
we save our office location in google) and services people have visited. Users can disable
Google Location Services, but in that case Google can rely on other ways to legitimately access
the user's location (e.g. through apps to which one has given access to location information).17
The ads can be served on the basis of location collected through any of the above means. While
service providers like Google also give options to its consumers to turn ad personalization off,
in such cases data stored is not used to target the ads.18
17
https://policies.google.com/technologies/location-data?hl=en
18
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Step 4 — Deciding the Budget:
It is necessary to provide a budget which will be used for the ad campaign. The advertiser needs
to provide a daily budget in the settings. However, it is not necessary that the ad network or
demand side platform would spend the exact amount on a daily basis. Depending on several
factors this amount can be slightly higher or lower. Google Ads for example, can spend up to
two times of the daily ad budget (called as over delivery), though it would exceed monthly
budget (Monthly Budget = Daily Budget X 30.4)19. Why 30.4, because there are approximately
30.4 (365/12) days in a month. The budget would depend on the objective of the advertiser and
the number of various campaigns planned.
Step 5 — Deciding the Bidding Strategy:

The bidding strategy is directly related to the goal of the campaign. Based on the bidding
strategy, the ad network will optimize (often automatically) which impressions to prioritize,
and how aggressively we bid. Given that ROI of advertising largely depends on the bidding
strategy, choosing the most appropriate bidding strategy becomes important.
There are two primary bidding strategies available, manual and automatic. While there is only
one manual bid option (Manual Cost per Click), there are various automatic bidding options.
In automatic bidding, Google Ads use previous data to optimize the bid price on the basis of
chosen objective (Refer to Exhibit 5.3). This is achieved with the help of various machine
learning algorithms. The various bidding options are discussed below:
Smart Bidding Options
The smart bidding options focus on conversions and are most advanced bidding techniques.
Target cost per action (CPA): The Target CPA focuses on increasing conversions while
targeting a specific cost per action (CPA). The user can provide the maximum CPA one is
willing to achieve, and the algorithm would try to achieve the CPA within that range.
Target return on ad spend (ROAS): ROAS bidding optimizes for conversion value, and helps
to increase conversion value while targeting a specific return on ad spend (ROAS). In order to
calculate conversion value, the advertiser needs to provide product prices and margins. The
conversion value is total revenue one would need for every advertising dollar spent.20 Thus,
this bidding option focuses on maximizing the profitability of advertising one can achieve.
Maximize Conversions: As the name suggests, this option focuses on providing maximum
number of conversions for a given budget. Thus, this bidding option will minimize the cost of
conversions to maximize conversion.
Maximize Conversion Value: This bidding option is similar to ROAS, but focuses on
maximizing the conversion value for the given budget. Again, it is required that the necessary
19
20
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information is provided before choosing this bidding strategy, so that conversion values can be
calculated.
Enhanced cost per click (ECPC): This is the closest automated bidding option to manual cost
per click bidding option and adds a smart option to manual bidding.21 Although one can be
charged more than your maximum CPC for a single click in eCPC bidding, Google tries to
keep average CPC below max CPC bid.
https://support.google.com/google-ads/answer/6167143?hl=en (Auction Time Bidding)
Exhibit 5.3: Role of Historical Data in Bid Optimization
To get the benefit of optimization it is necessary that similar campaigns have been run in the
past. Only if one has racked up enough historical performance, the automated bid options can be
chosen. The ad networks use the historical data along with other signals to drive the particular
optimization (e.g. optimizing for conversion, optimizing for least cost per acquisition). For
example, to use Target ROAS bidding, most campaign types need at least 20 conversions in the
past 45 days. Whereas for App campaigns, historical data of at least 10 conversions every day
(or 300 conversions in 30 days) is needed. For most of the campaigns it is recommended to have
at least 50 conversions in the past 30 days. This is necessary to maximize results and give
machine learning algorithms enough data to make informed bidding decisions.
Cost per Click (CPC) Bidding Models
To gain clicks in order to generate traffic to the website, there are two cost-per-click bid
strategies:
Maximize Clicks: This is an automated bid strategy which automatically manages bids to bring
the most clicks possible within the stated budget.
Manual CPC bidding: This manual bidding option lets one manage the bidding on their own,
rather than optimizing algorithms. One can set different bids for each ad group (we discuss this
later) in the campaign, or for individual keywords or placements. This is a good bidding option
to start with, as it gives more control in the hands of the marketer.
Impression based bidding models
If one wants to focus on impressions, these bidding strategies can be used. Impression based
bidding strategies are useful to create awareness, as even unclicked ads are noticed. Moreover,
creative ads may prove to be more cost effective if purchased based on impression, as they tend
to have higher click rates, and thus, lower overall cost per click.
It is important to note that one can pay only for Clicks in case of Search Ads and impression
based bidding options are not available. This is logical, as search ads are pull in nature and
would appear only when a user is searching for a query which is (keyword) targeted by the
21
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advertisers. However, one is free to choose impression based bidding models in case of search
and video ads (specifically for the short video ads, called bumper ads).
Cost per Mille (CPM) and Viewable Cost per Mille (vCPM): These are manual bidding
strategies which are focused on increasing awareness, but not necessarily generate clicks or
traffic. One can set the amount they are willing to pay for each 1,000 ad impressions on the
Google Display Network or YouTube. They only difference between CPM and vCPM is that
in case of vCPM model, the ad network only charges for the viewable impressions (See Exhibit
to understand the difference between impressions and viewable impressions)
View based bidding model (for video ads only)
Cost per View (CPV): For video ads, CPV is the default bidding option. In CPV bidding,
advertisers are charged for video views or interactions (such as clicks on call-to-action
overlays, cards, and companion banners). A view is counted when someone watches 30
seconds of the video ad (or less, if the video is of shorter than 30 seconds) or interacts with the
ad, whichever comes first. The advertiser has to bid the maximum amount s(he) is willing to
pay per view (reffered as Max.CPV).
Apart from the above bidding strategies, Google Ads offer two more bidding strategies
specifically applicable for search ads:
Target Search Page Location: This big strategy automatically sets the bids to increase the
chances that an ad appears at the top of the page, or on the first page of search results.
Target Outranking Share: This is an automated bid strategy that lets you choose a domain you
want to outrank so that your ad is displayed above that domain’s ads, or shows when that
domain’s ad does not. You can set how often you want to outrank that domain, and Google
Ads automatically sets your Search bids to help meet that target.
These 5 steps i.e. choosing campaign goal, campaign type, location targeting, budgeting, and
bidding strategy are done at Campaign Level. Whereas, the next steps are done at Ad Group
Level. To understand Campaign Level and Ad Groups refer to Exhibit 5.4.
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Exhibit 5.4: Campaign & Ad Groups in Google Ads
In Google Ads, the campaign creation process has two levels: Campaign Level and Ad Group
Level. Campaign is defined as “a set of ad groups (ads, keywords, and bids) that share a budget,
location targeting, and other settings. Campaigns are often used to organize categories of
products or services that you offer.”22 The settings applied at campaign level, by default applies
to the next level i.e. Ad Group Level.
An ad group contains one or more ads that share similar targets. Each campaign is made up of
one or more ad groups. Ad groups are used to organize the ads by a common theme. For example,
ad groups can be segregated into the different product or service types the company is offering,
whereas the campaign can be made at company level. The steps 1 to 5 are undertaken at
campaign level, while step 6 and step 7 are done for various ad groups under a campaign. Figure
below illustrates the same.
Source: Author
Step 6: Targeting:
Step 6A Search Ads — Targeting

We discuss targeting separately for search ads and display ads as search ads are primarily
targeted by Keywords. Moreover, it is necessary to provide relevant keywords to run search
ads, and thus, right keyword selection becomes the cornerstone for a successful search ad
campaign. The Keywords can be a single word or a short phrase with a few words. The process
is done through Keyword Bidding, in which one puts a competitive bid (or keyword bid) in a
pay-per-click auction to help secure ad placement on the Search Engine Results Page (SERP).
To ensure the website gets quality traffic through the search ads, it is necessary that advertiser
bids for the most relevant keywords. Keyword selection is both a science and art, and ideal
keywords are more likely to result in clicks and conversations. Although keyword selection
22
https://support.google.com/google-ads/answer/6304?hl=en&ref_topic=24936
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can be aided with the help of specific tools (such as Keyword Planner from Google), it is
equally important to understand the customer behavior and predict the terms they actually
search. Tools such as Google Keyword Planner make it easy for the advertiser to identify
possible keywords, and tell the extent to which people are searching keywords, the level of
competition, and the expected bid range for targeting top positions. Exhibit 5.5 discusses more
about Keyword Planner and how it can be used. Nevertheless, there are many other factors
such as Ad Rank (Refer Exhibit 5.6), company's unique selling proposition and many more,
which must be considered while choosing the keyword. Also, one can use Auction Insights
Report for Google Search Ads to understand performance of specific keywords. We discuss
this in Chapter 6.
It is important that the marketer creates a list of all the relevant words which can be used across
the campaigns. This process can be more complicated in case the company sells multiple
products or services, serves customers in different countries and uses multiple languages and
many other reasons. To some extent the keywords research for SEO can also come to use while
finalizing keywords to be targeted for search ads.
Exhibit 5.5: Using Google Keyword Planner to Identify Optimum Keywords
Google Keyword Planner is a free tool which helps find relevant keywords which are useful
in search engine marketing. The planner provides a list of keyword, along with search
volume, completion and suggested bid price. The planner helps in choose competitive bids
for various keywords. Thus, the keyword planner is useful in searching for keywords and
predicts how the keywords might perform.
Given below are the keyword results for the single phrase ‘MBA in international business.’
They keyword planner suggested 392 keywords, out of which 20 most relevant keywords (as
suggested by planner) are given. The results are based on searches in India, from April 2019
to March 2020 and for ‘English Language.’
Thus, on entering one single phrase, the planner suggests multiple keywords which can be
targeted. The planner also gives search volume, competition and top page bid. Let’s discuss
each of this variable briefly.
1. Keywords: Keyword planner automatically suggests related keywords on either

entering word(s)/phrase(s) or website. Google uses its algorithms and data to suggest
many other similar and related keywords which can be used. The advertiser can choose
keywords which are more relevant to their business, things in which it specializes;
nevertheless keeping account of other variables.
2. Search Volume: This shows the average number of times people have searched for a
keyword and its close variants. The number is a relative number, and does not reflect
actual absolute searches. The min range shows minimum values a particular month may
have received, while max shows the maximum.iv
3. Competition: This shows the number of advertisers that showed on each keyword
relative to all keywords across Google. This data is specific to a particular location. The
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competition is reflected in range from low, medium, to high. The index value denotes
the same more granularly in numbers.
4. Top of Page Bid: This reveals the amount historically paid by various advertisers to
get the top ad position (up to four ads) on SERP. The low range corresponds to the 20th
percentile, whereas the high range corresponds approximately to the 80th percentile of
all the actual bids charged for the particular keyword. This is a very important variable
in the keyword planner, as it gives idea to the advertiser for planning bid amounts for
particular
Now that we have understood what each data variables represents, let us discuss how
one can choose the most ideal keyword. Choosing the keyword would depend on lot
many factors, and the best keyword can vary from situation to situation. Nonetheless,
there are some common principles given in the strategy grid, which must be kept in the
mind while selecting the keywords. However, it is important to note that all the variables
are related with each other, and these rules would apply in absolute sense assuming
ceteris paribus.
Keyword Selection Strategy Grid
Keywords Search Volume Competition Bid Price

Choose the Look for keywords Keywords with Look for keywords
keyword most with more search lower completion which have lower
relevant to the volume. are better. bid prices.
business.
Google Keyword Results for Search Term ‘MBA in International Business’
Keywords Search Competition Top of Page Bid (in

Volume INR)
Min Max Rating Index Low High
Value Range Range
mba in international business 1,000 10,000 Medium 41 27.96 96.96
hult business school 1,000 10,000 Low 20 40.02 135.77
international mba 100 1,000 Medium 44 28.4 182
hult international business school 100 1,000 Low 25 47.56 428.68
ranking
hult business school ranking 100 1,000 Low 24 52.54 266.97
iift executive mba 100 1,000 Medium 36 42.59 86.59
international business school 100 1,000 Medium 35 35.85 226.32
ceibs mba 100 1,000 Low 2 25.19 98.13
international institute for management 100 1,000 Low 10 41.11 145.87
development
world business school ranking 100 1,000 Low 9 17.32 66.83
world mba rankings 100 1,000 Low 5 24.37 184.95
mba in foreign trade 100 1,000 Low 23 23.72 74.65
marian international institute of 100 1,000 Low 4 21.78 51.6
management
isb world ranking 100 1,000 Low 4 100.23 101.9
amity international business school 100 1,000 Low 15 18.25 60.96
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international institute of management 100 1,000 Low 7 11.76 106.39
studies
ramachandran international institute 100 1,000 Low 11 20.15 1450.5
of management
mba international management 100 1,000 Low 16 24.04 112.09
mba in international business 100 1,000 Low 32 42.5 180.46
management
global mba rankings 2020 100 1,000 Low 15 21.4 234.17
As explained in Exhibit 5.5, keyword selection and ad creation is done at the ad group level.
Thus, one must add relevant keywords and related search ads in the same ad group. These ads
will show at appropriate positions on the SERP when someone searches for a similar query on
the search engine, and meets the other targeting criteria. Advertising platforms (such as Google
Ads and Bing Ads) provide a feature Keyword Match Types, which are parameters that can be
set on keywords to control which searches trigger the ads to appear. One can choose a particular
matchtype to target specific or general search queries for a specific keyword. Exhibit 5.7
discusses this in detail.
Exhibit 5.6 Ad Rank: Google’s Algorithm to Decide Winning Spot for Search Ads
In the previous chapter, we discussed how ad auctions take place for programmatic advertising.
It was evident from the discussion that the winning bid in the auction is usually the highest bid.
You must be thinking why do we bring this topic again?
In case of search ads, the position of the ad or if the ad would appear on the Search Engine Result
Page depends not only on the bid amount, but also on the Ad Rank. Ad Rank is the value that's
used to determine the ad position (where ads are shown on a page relative to other ads) and if
the ads will show at all.
Ad Rank is calculated based on various parameters. These include the bid amount, auction-time
ad quality (including expected click-through rate, ad relevance, and landing page experience),
the Ad Rank thresholds, the competitiveness of an auction, the context of the person’s search
(i.e. person’s location, device, time of search etc.), and the expected impact of extensions and
other ad formats.23
Thus, even if one has the highest bid price, there is no guarantee that their ads would appear
first. If the Ad Rank is low, it is quite possible the search ad would not even show up or take the
bottom position. Ad Rank is dynamic in nature and is recalculated each time an ad is eligible to
appear and competes in an auction.
Google Ads provides information pertaining to Ad Quality Score for previously run search
campaigns. These insights can be used to improve and fine-tune planned campaigns and enhance
ad rank.
23
https://support.google.com/google-ads/answer/1752122
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It is important to note that keywords are used in conjunction with other targeting techniques
such geographic and demographic targeting. The advertiser should ensure that enough
keywords have been added and reach is adequate (and not very less) to get sizable traffic on
the website. Ad platforms give such estimates which change dynamically with any change in
the targeting. Figure AAA shows an example of one such estimate.
Exhibit 5.6: Keyword Match Types in Google Ads
Match Explanation Symbol Keyword Sample Search Query

Type Match
1A. Broad Shows the ad when the keyword is present anywhere within the None Soccer Football Shoes, Shoes
search query. Also shows the ad for all close variants of the term Shoes for Soccer, Buy
as well as synonyms and misspellings. Helps target maximum Football Shoes etc.
search terms to increase the traffic and build initial search list. On
the downside, can bring traffic which is less targeted.
1B. Broad Shows the ad if the search query is an exact or close variant of +Keyword +Soccer Buy Soccer Shoes,
Match keyword, which includes misspellings, singular/plural forms, +Shoes Soccer White Shoes
Modifier abbreviations and acronyms, and stemming (such as “play" and
“playing"). Variants don't include synonyms or related searches. But will not show ad
for Football Shoes
2. Phrase Shows the ad when search perm matches the keyword phrase, or is “Keyword” “Soccer Cheap Soccer Shoes,
Match close variations of that phrase, and can include additional words Shoes” Soccer Shoes Deals
before or after the phrase. However, the ads will not show if
word(s) are added in the middle of the phrase that changes the But will not show ad
meaning of the phrase. for Soccer Practice
Shoes
3. Exact Shows ad when the search term matches the exact keyword or are [Keyword] [Soccer Soccer Shoes, Soccer
Match close variations. Close variants include searches for words with the Shoes] Shoe
same meaning and can also include spelling or grammar
differences between the query and the keyword. Bu will not show ad
for Soccer Shoes Deal
4. Negative Does not target any search term containing that specified keyword. -Keyword -Soccer Will not show ads for
Match Thus, can be used as a cautionary measure to not show ads for Socks any word containing
particular words. Negative keywords can be used in combination Soccer Socks or
of all the above match types. Thus, there are three negative match related searches.
types: Negative Broad, Negative Phrase and Negative Exact.
Source: Compiled by author from https://support.google.com/google-
ads/answer/7478529?hl=en
Step 6B Display Ads — Targeting

As discussed in the previous chapter, display ads give myriad ways of targeting to marketers
and these options differ across advertising platforms. While social media websites such as
Facebook have a lot more information specific to user’s demographics, large ad networks such
as Google Display Ads, usually have better understanding of content consumption, intent and
have a wide reach of publishers.24 Given that there are too many targeting options, we will just
have a brief look of these across two post popular display advertising platforms i.e. Google
Display Network and Facebook (which includes Instagram as well).
24
https://www.business2community.com/online-marketing/whats-difference-facebook-ads-google-adwords-
01820483
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Targeting Options on Google Display Network
There are two primarily two targeting options: Automated Targeting and Manual Targeting.
Automated Targeting: This option finds best placements of display ads across the network and
is a good way to get high-value traffic. The advertiser can control how conservatively they want to expand
the reach. With minimum expansion, the ads would appear to lesser but more relevant audiences, whereas
as one maximizes the setting, the ads are served to a higher number of audiences.25
Manual Targeting: The manual targeting options include: Audiences (Affinity and In-market Audiences),
Demographics (Gender, Age, Parental status, Household income) and Content (Keywords, Topics,
Placement).
Audiences: These are groups of people with specific interests, habits, intents, what they’re
actively researching, their interactions with company's business etc.26 Ad networks like Google
keep track of user activity for people who opt-in, and help advertisers by reaching people
browsing websites, using apps, or watching videos with such interests. There are primarily two
types of audiences:
Affinity Audience: It takes a relatively long-term view of audience creation in comparison to

In-market audiences. Rather than looking at one particular purchase intent, like In-market,
Affinity targeting analyzes someone’s overall interests, passions, and lifestyle to get a better
sense of their overall identity.
In-Market Audiences: It reaches out to potential customers who are actively researching or
looking to buy products and services. In-market audiences target individuals with more recent
behavior in comparison to Affinity audiences and thus helps target customers who are
potentially interested in particular products or services.
Demographics: Advertisers can also target individuals with specific demographics which
includes gender, age, parental status and household income (Refer Figure 5.4). Google collects
audience information in various ways, however, this information may not be available for all
users which are classified as unknown.27 Demographic information is very useful and helps
advertisers to reach out to people specifically of demographics they are actually interested in.
25
26
27
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Figure 5.4: Demographic Targeting Categories in Google Ads
Source: https://ads.google.com/aw/campaigns/new/display
Content: This targeting method allows advertisers to choose where they would like to show
their ads. Content targeting can be done in three ways i.e. through Keywords, Topics and
Placements.
Keywords: It allows advertisers to choose words or phrases related to their products or services.
Depending on these keywords, the ads are matched to relevant websites, apps, and videos.
However, this targeting must not be confused with Keyword Targeting for search ads, as there,
the person writes search query similar to keyword. Whereas, in this case, the ad is shown in a
context similar to the keyword for more impact, but the ad is still push in nature.
Topics: Topic targeting automatically places the ads on webpages, apps, and videos which are
the same or similar to the topic(s) chosen by the advertiser. The list of topics is prepopulated
in Google Ads which are based on broad industries or interests. One can choose appropriate
topics from the list. Figure 5.5 shows the suggested topics for the word ‘Gym’ given by
advertisers.
Placements: In placement targeting, the advertiser gets the option to choose the specific
websites or webpages, YouTube channels or videos, apps etc. on the Google Display Network
or YouTube. For example, if one wants to show ads when people are consuming sports content,
sport specific websites or webpages such as espn.com, nbcsports.com, sports.vice.com, etc.
Google Ads also provides estimates of weekly impressions served in case of websites, number
of subscribers in case of YouTube Channels, and views in case of specific videos, so that one
can make more informed choices.
This summarizes the various targeting options on Google Display Network. It is important to
note that one can choose any one or multiple targeting options. However, the advertiser should
also look at the estimates provided as the changes to targeting are made, as the targeting may
make the reach too broad or narrow. Next, we look at some common targeting options on
Facebook.
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Figure 5.5: Suggested Topic Placements for ‘Gym’ in Google Ads
Targeting Options in Facebook Ads
Instagram and Facebook Becomes One! Facebook being a social

Facebook acquired Instagram, a popular networking, can be
and quickly growing photo sharing contextually different from
platform in April 2012 for 1 Billion USD. many other display ad
What caught Mark Zuckerberg’s fancy was networks, such as Google Ads.
the large mobile customer base the Not only does it have a more
platform had, and the experience controlled layout for ads to
Instagram provided to users. appear, users on Facebook are
usually at leisure and relaxed
In his companies (Facebook) blog, Zuckerberg mentioned which can make engagement
“This is an important milestone for Facebook because it’s with an ad a lot more different.
the first time we’ve ever acquired a product and company
with so many users. We don’t plan on doing many more of Social networking websites
these, if any at all. But providing the best photo sharing have a lot more data at their
experience is one reason why so many people love disposal, which is provided to
Facebook and we knew it would be worth bringing these advertisers for the purpose of
two companies together.”28 targeting. Usually they would
know the exact date of birth,
Facebook later integrated the advertising across the two gender (if provided correctly
platforms, and today markers can choose if they would like by the user), and even more
to show ads on Instagram, while planning their campaigns information like anniversary,
on Facebook Ads Manager. The two platforms are check-in locations, brands one
integrated on the user side as well, by giving option to the has liked, travel history,
user to upload content at the same time on the other education, alma mater and a lot
platform, when they are on either of the platform. more.29 Thus, Facebook
providers advertisers many
28
https://about.fb.com/news/2012/04/facebook-to-acquire-instagram/
29
https://www.facebook.com/business/ads/ad-targeting
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granular targeting capabilities, which are not available in many other online advertising
platforms and in traditional advertising. We discussed these below.
Custom Audiences: Custom audiences allow companies to target customers who have already
interacted with the business (e.g. visited the website) or are similar to such customers, referred
to as lookalike audiences. To add custom audiences (people who have interacted with the
brand), advertisers can provide the customer database containing either emails, Facebook user
IDs, phone numbers, mobile advertiser IDs or Facebook pixel (especially for retargeting). This
enables the advertiser to reach back to people who may have recently checked out a product,
or may have left it in the cart.
While with Lookalike Audiences can target a new set of people who are similar to the custom
audience and can match the audience to a much granular level, with the help of demographic,
interest and behavioral data.30 One needs to provide a list of minimum 100 customers to find a
lookalike audience.31 Moreover, Facebook also gives control to advertisers to control the
audience size by adjusting a slider from 1 to 10 percent of the population on the platform in the
specific country. If the number is lower, Facebook will focus on providing a more Similar
audience, while a higher percent will maximize the audience Reach.
Demographics: Apart from age and gender, Facebook has detailed demographic targeting
capabilities which includes education, life events, relationship status etc. (Refer Exhibit 5.7).
Thus, using demographic targeting one can target Females, living in Dublin, who are Single
and graduated from Trinity College.
Interests: This let advertisers reach people with specific interests, activities and hobbies they
are involved in, pages they have liked and topics they follow. By targeting people based on
their interest, the advertiser can reach potential customers who are interested in their products
or services. There are a wide range of options to choose from, some of which are summarized
in Exhibit 5.. Moreover, one target even more niche segments by combining interest based
targeting with other options.
Behavior: Targeting behavior means reaching out to people who have done some specific
action in the recent past or meet some specific criteria. It can be targeting people based on their
travel history, or by specific event dates which have passed or about to come (E.g. recently
wed, moved to a new location etc.) Facebook even provides targeting based on political and
cultural affinity for US.
The wide range of targeting options with pinpointed geographic targeting (even up to 1
mile/kilometer) makes Facebook a lot more powerful. Nevertheless, its reach is limited only to
Facebook and Instagram users, and unlike other ad networks it can be used to advertise across
other websites. Next we discuss how one is supposed to design the ad for different types of
campaigns.
30
https://www.wordstream.com/facebook-vs-google
31
https://www.facebook.com/business/a/custom-to-lookalike-audiences
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Exhibit 5.7: Targeting Options in Facebook
Step 7: Ad Creation
Although ad creation is the last step in executing digital advertising, it is also one of the most
important steps. The ad creation process is done at the ad group level, and it is suggested that
one creates multiple ads for each of the ad groups. Not only does it ensure people do not see
repetitive advertisements, automatic rotation and A/B testing allows advertisers to understand
which ad is performing better. Moreover, unlike traditional advertising, for most of the ad
formats creating multiple ads can be done very quickly and almost at no additional expense.
Given that search ads and display ads are very different in their design, we discuss them
separately.
Search Ads Creation

As search ads do not have images or any other creative elements, all we need is a good targeting
and an impactful copy. It may sound very simple, but there are specific nuances involved in
creating an impactful search ad. The search ad snippet has various elements, each having a
specific purpose and a maximum character length. Below are the various regular elements,
which are necessary to have in a search ad. You must have seen these appearing regularly
whenever you search for something on a search engine. Figure 5.8 shows sample search ads
from Google and Bing.
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As we can see a typical search ad includes various elements such as display path, heading etc,
we discuss them next.
Figure 5.8: Sample Google and Bing Search Ads and Ad Elements
Source: Author
Key elements in Search Ad:
1. Final URL: This is the link of the landing page where the person would go on clicking
the ad. It is important to realize that the final URL is not visible to the user, but is
embedded in the clickable headline.
2. Display Path: This is the visible URL path which the user see’s along with other ad
elements. In Google search ads, it’s the first line of the ad; whereas in Bing, it comes
below the Headline in green font. Giving the display path is compulsory, and it has to
contain the homepage URL of the company (which will be contained in the landing
page). Apart from this, the advertiser can also mention any subpage paths if they desire.
3. Headline: This is mostly the first thing that catches the user attention (owing to its
larger font and blue color. Thus, the headline must be clear in itself and catchy at the
same time. Moreover, it is good to include any of the important keywords being
targeted, in the heading itself. This would increase the relevance of the ad for the user,
and can also lead to a better ad rank. In Google Search Ads, one can write up to three
headings, which should be within 30 characters each (including spaces). As mentioned
above, the Headline is the only clickable link apart from Ad Extensions in the search
ad, with the final URL embedded within it.
4. Description: As the name suggests, here one can mention about the product and
services in a little more detail. It is also good to mention any of the unique offerings,
and current offers going on and any other details which would make the viewer more
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interested in clicking the ad. For example, the SalesForce ad in Figure 5.8 mentions
how the software can increase marketing performance by stating specific numbers. In
Google Ads, two lines of description can be added with each one having maximum
length of 90 characters. Though the elements are overall the same across popular search
ad networks (E.g. Google, Yahoo, Bing), the character length can vary.
5. Ad Extensions: Although optional, ad extensions are also an important element in

search ads. Not only do they provide additional information, they help in improving ad
rank as well. Both the search ads in Figure 5.8 above have used site link extensions,
whereas TripAdvisor (Bing Search Ad) has also used price extension. Exhibit 5.8
discusses types and uses of ad extensions in detail.
Exhibit: 5.8: Google Search Ad Extension Types
Ad Extensions expand ads with additional information and give more reason to viewers to click
an advertisement. Extensions can be in various formats including location information, call
buttons, navigation link, links to specific parts of your website, additional text, and more. As
extensions add more content to the ad, they give more ads greater visibility and prominence on
the search results page. Thus, they tend to add a lot more value to the ads by giving people
additional information and interactive ways of reaching the company—as with maps or calls.
Moreover, extensions often increase the ad's Click Through Rate (CTR) by several percentage
points.32
As there are various types of ad extensions, it is ideal to use the extensions which are relevant to
the business goals. Most of the extension types require manual set-up, while some are added
automatically when Google Ads predicts they’ll improve ad performance and the necessary
information is present. Moreover, relevant extensions are known to improve Ad Rank (due to
positive ad format impact), and thus must be included. Whenever possible, it is suggested to use
extensions at the campaign level, so that they get added to various ad groups.33 Extensions are
not charged separately, but Clicks on ad (including extension) are charged as usual. Although
the majority of ad extensions are more relanvt in context of search ads, some of the ad extensions
can be used both in search and display ads. Below are some of the prominently used as an ad
extension types:
1. Sitelinks: Sitelinks allows one to add additional links to ads. These links can take people
to specific pages on the site (for example, a specific collection of products) other than
the main ad URL. When someone clicks or taps on sitelinks, they go directly to the
specified page. When used, a minimum of two sitelink extensions need to be provided.
Below is an example of sitelink extension:
32
33
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2. Location extensions: The clickable extension shows business location address in a
separate line. On mobile they provide a link with directions to the physical location of
the business. Moreover, this extension can also show rating stars, one has garnered on
Google My Business listing.
3. Callout extensions: This extension allows to add additional text to the ad, apart from sub-
heading and description. Businesses can include additional text which are likely to
increase clicks and conversions. Like “free delivery” or “24/7 customer support.” etc.
4. Call extensions: As the name says, it allows businesses to add click-to-call phone
numbers in the advertisement. On mobile devices this extension adds a phone icon which
allows the user to call directly, whereas on laptops and desktops the number digits are
displayed. Moreover, Google offers call conversion tracking in order for businesses to
track their call extension data.
5. Message extensions: This mobile only extension lets people send text messages when
the link is clicked. It is ideal for people who prefer text messaging over calling.
6. Structured Snippet & Dynamic Structured Snippet extensions: This ad extensions can
show additional information on the advertiser’s website when it matches to the search
query made by the user. This helps users to be sure that the website products and services
matching their interests. As the name suggests, these extensions are dynamic and can
vary depending on the search, and may not show up in every search ad.
7. Price extensions: This extension lets the advertiser showcase various services or product
categories with their prices, by linking search users directly to those sections of the
website. At maximum one ad can contain a set of up to 8 cards that people can view to
see different options and prices.
8. App extensions: This extension encourages people to download specific apps.
Depending on the device, the click on the CTA button directs the user to your appropriate
app downloading service (App Store or Google Play). This is an ideal extension if the
primary goal is to drive app downloads.
Another way experienced advertisers can create ads is by using the Dynamic Search Ads
option. Dynamic Search Ads use the content on the website to create a dynamic ad headline,
final URL, and display URL which are closely matched to the specific search query. The
process happens automatically when set up properly. The advertiser needs to provide only the
ad description. This ensures the ads are relevant to the search query and saves a lot of time.
These ads are a good option for advertisers who have large inventory of ads and various
products or landing pages (for example, most of the e-retailers). However, the advertiser needs
to ensure that the pages are well optimized so that Dynamic Search Ads can identify the themes
and terms correctly to show appropriate ad content.
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Display Ads Creation
As display ads have various ad formats and sizes (especially for banner ads), the complexity in
creation is slightly more. This doesn't mean all types of display ads are difficult to create, but
it often needs a different skill as compared to search ads. Due to images (usually more than
one) or videos required to create display ad a graphic designer is often required. Nevertheless,
the ad networks offer simpler formats, stock images (often free of cost) and tools to motivate
new and small businesses to use these advertising formats effectively. In the following section
we discuss basic display (banner) ad creation on Google Display Network and Facebook, and
briefly cover nuances involved in creating video ads for platforms such as YouTube.
Google Display Network

Google Display Network (GDN) is world’s largest ad network with participation from more
than 2 million websites and apps where the ads can appear. It reaches over 90 percent of internet
users worldwide, and thus is one of the most commonly used platform for display ads.
There are two common ways to create display ads on GDN, i.e. either to upload a custom
display of particular size (Refer to Exhibit 5.9 for common sizes) or provide content for
responsive ads, which GDN will automatically customizes.
Google Ad Strength
This is a rating provided by GDN which Many advertisers these days
tells the effectiveness of a display ad. The choose to show responsive
overall rating can range anywhere from ads, as it reduces the workload
‘Low’, ‘Average’ to ‘Excellent’. Along of creating multiple ads in
with the rating specific action items(s) are various sizes.v When one
also mentioned which can help in chooses to create responsive
improving the strength of the ad. display ad, they need to
provide images, headlines,
The indicative rating comes during the ad logos, videos, and descriptions
creation process (so that advertiser can separately which GDN
make necessary modifications) and also automatically mix and
during and after completion of the matches the content to
campaign. generate ads depending on
placement where they are
supposed to appear. The advertiser can benefit by choosing responsive ads as they can appear
across websites, which may not accept some of the custom sizes. Nevertheless, if advertiser is
choosing to advertise on some common websites which accepts common display ads sizes, the
ad creative can directly be uploaded in JPG, PNG or GIF format. One must assure that the
creative meets the technical requirements (Refer, Exhibit 5.9).
It is equally important that the ad is well designed and creates an impact. We discuss these
points after discussing a bit on creating display ads on Facebook.
Facebook Advertising
Facebook provides another wonderful opportunity to advertisers to reach more than 1.5 people
worldwide. Advertising through Facebook Ads Manager can appear on Facebook (Facebook
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and Messenger), Instagram and Audience Network. Though much smaller than GDN, audience
network allows advertisers to target Facebook users outside of Facebook and Instagram.
Though initially Facebook had very limited ad formats, with time the number of ad formats
have also grown. Exhibit 5.9 explains 7 key formats of ads available in Facebook Ads Manager.
The various ad formats on Facebook are designed keeping in mind experience of a Facebook
user. Often these ad formats give an immersive experience to the user, rather than distract them.
Moreover, many of the formats appear instream and are similar to user and marketer generated
content posted on Facebook and are native in nature.
To ensure that the ads dovetail within the Facebook environment and do not spoil user
experience, Facebook encourages marketers to use ads with high imagery. Moreover, it
provides free text overlay checker tool so that one can check proportion of text on Image being
used as part of creative. The tool classifies images from ok, low, medium to high. Any image
containing more than 20 percent of text would generally have more than specified amount of
text. Images with high text will have a limited reach and when the text is beyond a certain limit
the ads will not run. Thus, it is always advised that users keep text low and keep advertising
more image centric. Moreover, Facebook allows advertisers to newer and stunning image and
audio enhancements such as panoramic and 360 degree image and video. We have provided
these details and other technical aspects in Exhibit 5.9.
Exhibit 5.9: Facebook Ad Formats and Technical Specifications

Ad Format Description Basic Technical Specifications
Image Uses single image of product or brand. Image Based Ads
Video Video ads add life by adding motion and File Type: High Resolution JPG or
sound and are great alternative to static PNG, including panorama and 360
ads. Facebook allows even short video degree images.
(more than 1 second) to be used in video Minimum Size (Desktop): 476 x 249
ads. pixels
Slideshow This format uses multiple images or Minimum Size (Mobile): 320 pixels
videos, text and sound. One must include Image Ratio: 1.91:1 to 4:5
three to ten images or one video. Text: 125 characters
Carousel Carousel ads have up to ten images or Video Based Ads
videos interlaced in a single ad, with Recommended Video File Format:
possibility of each image or video having High-resolution video with H.264
link for different CTA. compression with fixed frame rate,
Instant These ads open in a full-screen experience even supports 360 degree video.
Experience when the user click the ad on a mobile Minimum Resolution: 120 x 120 pixels
device. Recommended Audio Format: Stereo
Collection This format showcase multiple products AAC audio at 128+ kbps.
and opens as an Instant Experience when
user clicks on it in a mobile environment. Video Ratio: 9:16 to 16:9
Lead Lead generation ads allows advertiser to Maximum Video Size: 4 GB max.
Generation collect information through a form when Video Duration: Minimum 1 second to
the ad (image or video) is clicked. maximum 240 minutes
Captions and Video Sound: Optional
but recommended
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To wrap up, the overall process of creating ads for majority of the ad networks is similar, but
the formats and technical specifications can have variations. It is always useful for the
advertiser to check out these before creating ads for a specific network.
We next discuss some of the important things which should be considered while creating
display ads, regardless of where they are going to appear:
1. Choose Appropriate and Clear Call to Action (CTA) and Headings: The main reason to
advertiser is to motivate viewer to click on the advertisement. Thus, it is necessary that
clear call to action is mentioned. The CTA should be short, but action oriented. One should
also choose appropriate call to action, which can include ‘Download Now,’ ‘Shop Now,’
‘Learn More,’ etc. Even more important is heading, which often catches the attention of
the user first. Always use a heading which is easy to understand and motivates viewer to
pay more attention to the advertisement.
2. Use Impactful Images & Videos: Display ads are often selected by advertisers over text
ads due to the possible visual impact. Therefore, it is necessary that the image or video is
the hero in the display ad. It should not only be visually appealing but should also give a
clear idea what the ad is for. As people are prone to banner blindness (i.e. they tend to look
away from the ads), the image should stand out from the crowd. It is advisable to use high
contrast lifestyle imagery, as studies show they tends to perform better.vi
3. Focus on Branding and Landing Pages: It is equally important to keep the ad branding
consistent with the landing page and other marketing collaterals for consistency. The ads
should have same brand colors, fonts, and other elements to ensure the brand gets
recognized and recalled. Moreover, the brand logo should be at the same location as used
by brand across collaterals, while ensuring it doesn’t overlaps with platform specific logos
such as AdChoices. It is equally important to ensure people land on the right landing page,
and see what has been promised in the advertisement. If the ad promotes ‘20% Off on
Entire Range of Jackets’ where as there are no product discounts on the landing page,
chances are not only advertising money will go waste, but will leave a negative impression
for brand.
4. Create a Sense of Urgency: It’s always better to give more reasons to people to click the
ad. Consider offering a limited range of products, extended warranties or discounts. A
sense of urgency by saying the offer “Ends Today” or that it’s a “Last Chance,” would
definitely boost the CTR. People are much more likely to click on ads that include this
sort of verbiage.
5. Test before Going Full Scale: It is easy to test if the display advertising is making desired
impact soon after the campaign goes live. Initially campaigns should be executed with a
small proportion of budget and one should examine A/B testing results, Ad Strength, and
general metrics such as CTR, CPC/CPM etc before running campaigns will full budget.
Advertising strategy and/or execution should be adjusted if the numbers are not as per the
plan.
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Exhibit 5.9: Common Animated and Non-animated Image Sizes & Specifications for
Google Display Network Ads.
Square and Rectangle Format Skyscraper Format
Ad size In Pixels Format Name Ad size In Pixels Format Name
200 × 200 Small square 120 × 600 Skyscraper
240 × 400 Vertical rectangle 160 × 600 Wide skyscraper
250 × 250 Square 300 × 600 Half-page ad
250 × 360 Triple widescreen 300 × 1050 Portrait
300 × 250 Inline rectangle
336 × 280 Large rectangle
580 × 400 Netboard
Leaderboard Format Mobile Format
Ad size In Pixels Format Name Ad size In Pixels Format Name
468 × 60 Banner 300 × 50 Mobile banner
728 × 90 Leaderboard 320 × 50 Mobile banner
930 × 180 Top banner 320 × 100 Large mobile banner
970 × 90 Large leaderboard
970 × 250 Billboard
980 × 120 Panorama
File Types Supported GIF, JPG, PNG
Maximum File Size 150KB
Specifications for Animation length must be 30 seconds or shorter
animated-image ads Animations can be looped, but the animations must stop after 30 seconds
(GIF) Animated GIF ads must be slower than 5 FPS
Source: Compiled by author from https://support.google.com/google-ads/answer/1722096
Deciding Where to Advertise

The world of display ads doesn’t end with GDN and Facebook ads, as there are many other
popular ad networks such as LinkedIn Ads, TikTok Ads, SnapChat Ads and many other ad
platforms which are not discussed here. The choice of ad platform largely depends on targeting
option the network provides, the coverage i.e. which target segment it can reach, ad formats
and their impact, and last but not the, the comparative cost per click (CPC) and the ROMI one
gets from the particular platform. Nonetheless, as discussed in chapter 4 Google and Facebook
rule the advertising world with a majority share across all ad networks. Interestingly, both these
platforms are very competitive when it comes to CPC as illustrated in Figure 5.9.
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Figure 5.9: Industry Wise Average CPC for Various Types of Campaigns
7.00
Values in US$
5.88
6.00
5.00
4.20
3.77
3.77
3.72
4.00
3.19
3.17
2.93
2.72
2.52
3.00
2.24
2.14
2.00
1.81
1.81
1.78
1.66
1.64
1.55
1.43
2.00
1.32
1.32
1.27
0.88
0.72
0.70
0.69
0.63
0.60
0.60
0.39
1.00
0.37
0.37
0.34
0.20
0.00
0.00
Google Search Ads GDN Ads Facebook Ads
Source: Compiled by author from:

https://www.wordstream.com/blog/ws/2017/02/28/facebook-advertising-benchmarks and
https://www.wordstream.com/cost-per-click
Measuring Advertising Performance: The Metrics

Chapter 2 discussed various pricing models (including pay-per-impression and pay-per-click)
and associated metrics. In this section we discuss in detail, given the necessary data, how can
one arrive at these metrics and how these metrics relate to one another. We also delve into
various formulas to calculate the metrics and their use.
Total Advertising Cost/ 𝐶𝑜𝑠𝑡 𝑃𝑒𝑟 𝐶𝑙𝑖𝑐𝑘 × 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐶𝑙𝑖𝑐𝑘𝑠

Campaign Cost Or
𝐶𝑜𝑠𝑡 𝑃𝑒𝑟 𝑇ℎ𝑜𝑢𝑠𝑎𝑛𝑑 𝐼𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠 × 𝑇𝑜𝑡𝑎𝑙 𝐼𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠 𝐷𝑒𝑙𝑖𝑣𝑒𝑟𝑒𝑑
1000
Cost per Thousand (CPM/ 𝐶𝑜𝑠𝑡 𝑃𝑒𝑟 𝐼𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛 × 1000

Impression CPT) Or
𝑇𝑜𝑡𝑎𝑙 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 𝐶𝑜𝑠𝑡
× 1000
𝑇𝑜𝑡𝑎𝑙 𝐼𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠 𝐷𝑒𝑙𝑖𝑣𝑒𝑟𝑒𝑑
Cost per Click CPC 𝑇𝑜𝑡𝑎𝑙 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 𝐶𝑜𝑠𝑡

𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐶𝑙𝑖𝑐𝑘𝑠 𝐷𝑒𝑙𝑖𝑣𝑒𝑟𝑒𝑑
--------------------------------------------------------------------------------------------------
Click Through Rate CTR 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐶𝑙𝑖𝑐𝑘𝑠
× 100
𝑇𝑜𝑡𝑎𝑙 𝐼𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠 𝐷𝑒𝑙𝑖𝑣𝑒𝑟𝑒𝑑
Conversion Rate CR 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐶𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑊ℎ𝑜 𝑃𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑑
× 100
𝑇𝑜𝑡𝑎𝑙 𝐴𝑑 𝐶𝑙𝑖𝑐𝑘𝑠
Cost per Lead CPL 𝑇𝑜𝑡𝑎𝑙 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 𝐶𝑜𝑠𝑡
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐿𝑒𝑎𝑑𝑠 𝐺𝑒𝑛𝑒𝑟𝑎𝑡𝑒𝑑
Cost per Acquisition CPA 𝑇𝑜𝑡𝑎𝑙 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 𝐶𝑜𝑠𝑡
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐶𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝐴𝑞𝑢𝑖𝑟𝑒𝑑
Return on Marketing ROMI 𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 − 𝑇𝑜𝑡𝑎𝑙 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 𝐶𝑜𝑠𝑡
Investment × 100
Where, Contribution = Total Revenue Generated - Cost of Goods
Sold.
When contribution is more than advertising cost, the campaign is

profitable, else it is loss making.
Or
𝑃𝑟𝑜𝑓𝑖𝑡/𝐿𝑜𝑠𝑠
× 100
Or
(𝐼𝑛𝑐𝑟𝑒𝑚𝑒𝑛𝑡𝑎𝑙 𝑅𝑒𝑣𝑒𝑛𝑢𝑒 × 𝐺𝑟𝑜𝑠𝑠 𝑀𝑎𝑟𝑔𝑖𝑛) − 𝑀𝑎𝑟𝑘𝑒𝑡𝑖𝑛𝑔 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡

𝑀𝑎𝑟𝑘𝑒𝑡𝑖𝑛𝑔 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
× 100
Where, Incremental Revenue is the Total Sales Generated by the

particular Advertising Campaign, and
Marketing Investment is the Total Campaign Cost
Figure AAA: Google Ads Performance Summary
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What’s Marketing Attribution? Solving the ROMI Puzzle
across Campaigns
Marketing Attribution is the process
of identifying set of user actions or
events that lead to a desired Given below is incomplete data
marketing outcome. In specific, about two advertising campaigns run
digital marketers use marketing by an online Aquarium Retailer. We
attribution to understand which marketing endeavors will find out all the missing (shaded)
(advertising campaigns, social media marketing, values in the table using respective
landing page optimization etc.) are contributing to formulas. Finally, we will also find
the desired results (signups, enquiries, conversions out which of the campaigns: display
etc). Moreover, as consumers usually use multiple ads or search ads, had a higher return
channels and touchpoints in their online interaction, on marketing investment (ROMI).
it is important that marketer gives credits (attributes)
all these touch-points with relative weight. This This will enable us to understand
particular process is referred to as multi-channel how both PPI and PPC pricing
attribution. Usually, attribution in digital marketing models can be compared to each
is done at a user-specific level, by attempting to other, and how to find return on
assign a common user identifier across all events. marketing investment for campaigns.
These individual level responses are often Moreover, it will also give us a clear
aggregated later to arrive at channel specific ROI. understanding how all the metrics
This is opposed to traditional media performance can be computed.
analysis, where ROI is generally understood at the
macro user-group level because there is no consistent This may look daunting at first, but
user identifier available.34 is easy.
Company Campaign 1: Campaign 2:

Display Ad Search Ad
Pricing Model Pay per Thousand Pay per Click (PPC)
Impression (PPI)
Impressions Delivered 20,00,000 30,00,000
Cost per Thousand Impression (CPM) $80
Cost per Click (CPC) $1.5
Total Ad Clicks 80000 100000
Campaign Cost
Click Through Rate
Customers Who Purchased 2400 2500
Conversion Rate (CR)
Cost per Acquisition (CPA)
Average Contribution per Sale $250 $230
Total Contribution
Total Profit
Return on Marketing Investment (ROMI)
34
Pp. 182 Gupta, S. (2018). Driving digital strategy: A guide to reimagining your business. Harvard Business
Press.
--------------------------------------------------------------------------------------------------
We use the formulas given on the previous page to find out the values.
Let us first find out the Campaign Cost:

Metric Display Ad Search Ad
Campaign Cost $80 × 2,000,000 = $1.5 × 100,000
= 1000 = $150,000
= $160,000
Next let us find out CPM and CPC. It is important to note that we can find comparable CPC
for a CPM based campaign and vice-versa.

CPC $160,000 $1.5 (Already Given)
= 80,000
=2
CPM $80 (Already Given) $150,000
= 3,000,000 × 1000 = $2
CTR is an important metric as it tells the percentage rate at which an ad is clicked.

CTR 80,000 100,000
= × 100 = 4.00% = × 100 = 3.33%
200,000 300,000
(In Percentage)
Next, we calculate CR to understand how many customers converted from each of the
campaigns.
CR 2400 2500
= 80,000 × 100 = 3.00% = 100,000 × 100 = 2.50%
Now let’s calculate CPA. It is understood that if CPA is higher than average contribution per
customer, the campaign will run into loss.
CPA $180,000 $150,000
= = $66.67 = = $60
2400 2500
Below is Total Contribution and Total Profit

Total Contribution = 2400 × $250 = $600,000 = 2500 × $230 = $575,000
Total Profit/Loss $600,000 − 160,000 = $440,000 = 575,000 − 150,000 = $425,000
Finally, we calculate the ROMI. We can already see that both the campaigns were profitable,
but need to find out which delivered higher percentage profit.

ROMI $440,000 $440,000
= $160,000
= 275.00% = $160,000= 283.33%
(In Percentage)
Therefore, based on the calculations we found out that Campaign 2 (Search Ad) was slightly
more profitable and had a ROMI of 283.33%.
--------------------------------------------------------------------------------------------------
In a similar way, we can find and compare profitability of advertising campaigns across
platforms and even compare it with other marketing endeavors
Tools Mentioned In This Chapter

Tool Classification Link
Facebook Text Free https://www.facebook.com/ads/tools/text_overlay
Overlay Checker
Google Free https://ads.google.com/intl/en_in/home/tools/keyword-
Keyword planner/
Planner
i
https://www.emarketer.com/content/us-native-advertising-2019
ii
https://blog.bannersnack.com/banner-ads-examples-from-tech-industry/
iii
https://www.invespcro.com/blog/ad-retargeting-
2/#:~:text=46%25%20of%20search%20engine%20marketing,Ads%20is%20about%200.7%20percent.
iv
v
vi
Drèze, X., & Hussherr, F. X. (2003). Internet advertising: Is anybody watching?. Journal of interactive
marketing, 17(4), 8-23.
--------------------------------------------------------------------------------------------------

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Table of Contents

What is Digital Advertising?

Evolution of Digital Advertising

History of Banner Ads

The First Banner ad by AT&T

Key advancements which have transformed digital advertising:

Programmatic Advertising: The advancement of digital marketing technologies have made

Exhibit 4.1: What are Native Ads?

Cross-Channel and Device Interactivity: Another phenomenal transformation is in the

Digital Media Buying Process

Direct and Programmatic Selling of Ad Inventory

Exhibit 4.2: Difference in Direct Vs. Programmatic Ad Sales

Zowie Skelton (2015)5 explains:

Exhibit 4.3 Understanding What Is an Ad Impression and How They Are

Demand Side Platforms (DSPs)

Supply Side Platforms (SSPs)

Ad Networks & Ad Exchanges

Understanding Real Time Bidding

Understanding how Auction of Ad Inventory Takes Place

Role of Web Cookies in Advertising

Types of Digital Advertising

Figure 4.2: Percentage Media Spending Across Different Ad Types

Display Advertising Formats

Static Display Ads

Example of a Static Display

Animated Display or Rich Media Ads (Flash, GIF and HTML 5)

Video Display Ads

Specific Executions of Display Ad Format

Pop-Up and Pop-Under Ads

Interstitial Banners Ads

Online Advertising Targeting Options

The AdChoices Logo

Interest Based Targeting

Figure 4.3: Google Ads Interest Profile

Content or Topic Targeting

Online Advertising Pricing Structures

Thinking through Digital Advertising: The Strategy

Step 1: Market Analysis

Step 2: Integrating Advertising with Cross-Channel Marketing Strategy

Step 3: Determining Advertising Objectives

Step 4: Deciding the Advertising Team

Figure: Key People Involved in Digital Advertising

Step 5: Finalizing the Budget

Step 6: Creating Customer Persona & Segments

Step 7: Choosing Appropriate Campaigns

Step 8: Measuring Performance

Figure 4.4: Satisfaction with ROI of various advertising platforms

The previous chapter discussed

Creating Digital Ad Campaigns: The Execution

Figure 5.1: Campaign Types in Google Ads

Source: Author’s Google Ads Account

Exhibit 5.1: What is conversion tracking and how to set it up?

Figure 5.2: Advertising Goals in Google Ads

Step 2 — Selecting a Campaign Type:

Step 3 — Choosing the Location:

Figure 5.3: Multi-Location Radius Targeting in Google Ads

Source: Author’s Google Ads Account

Step 5 — Deciding the Bidding Strategy:

Smart Bidding Options

https://support.google.com/google-ads/answer/6167143?hl=en (Auction Time Bidding)

Exhibit 5.3: Role of Historical Data in Bid Optimization

Cost per Click (CPC) Bidding Models

Impression based bidding models