This term simply refers to web-based ad campaigns. Display ads are the advertisements that you see on almost every webpage you visit, most commonly in the form of 728×90 leaderboards or 300×250 rectangles.
Display ads can be bought and sold in three primary ways:
Most sites that monetize their traffic through display advertising will utilize the first method above. As of 2013, Google AdSense alone includes two million publishers who earned $7 billion annually in revenue. Larger sites, however, will often employ a direct sales team responsible for selling ads.
In recent years the number of display ad formats has increased significantly. While the standard units that make the Universal Ad Package still account for a large percentage of total impressions, there are many more high impact ad units now available. The links below to the IAB site as well as the rich media gallery have numerous examples of the ad units now available to both advertisers and publishers.
There are two primary ways that publishers are compensated for running display ads:
In some cases, display ads will be priced on a cost per action or CPA basis. However, this is more common under affiliate marketing models.
Display advertising is the most common monetization strategy for web publishers, and for good reason.
Display advertising is extremely easy to activate; with dozens of ad networks available, even small publishers can be up and running with a minimal amount of work. There is also typically an unlimited supply of advertisements available; if you’re able to attract the visitors, display advertising presents an opportunity to monetize them.
Another advantage is the stability of earnings. Even under CPC arrangements, display ad revenue tends to be very stable from week to week for most sites. Moreover, display advertising is generally compatible with other monetization strategies.
The primary disadvantage of display advertising relates to the relatively low payouts. Many publishers will generate only a few dollars (if they’re lucky) for every thousand pageviews they are able to generate. For many, that means that millions of monthly views are required in order to have any meaningful amount of revenue.
As noted above, AdSense paid out $7 billion to about two million publishers in 2012. That seems like a tremendous amount of money, but it actually only translates to about $3,500 per publisher for the entire year. In other words, most sites being monetized through display ads have very limited success.