6 Types of Advertising Methods and How They’re Used
Your company’s product is so good that you’re sure customers will clamor for it the moment they learn of its existence. How do you cut through all the noise and competition for their attention to tell them about it? In a word, advertising.
Businesses have been advertising for as long as there have been businesses:
- The oldest record of advertising is a scrap of papyrus dated to 3000 B.C. in which an ancient Egyptian named Hapu the Weaver claimed to offer “the best cloth … woven to your desires.” The pitch was added to a plea by the weaver for the return of a runaway slave.
- The walls of the ancient Roman city of Pompeii were covered with thousands of “billboard” ads that promoted various gladiators, although most were in the form of graffiti.
- The first recorded print ad was a handbill published in England in 1472 that announced a new prayer book.
Most of today’s innovations in advertising take digital form; yet the traditional ad media of print and broadcast continue to find new ways to raise consumer awareness of brands and products that companies of all sizes from around the globe offer. The six types of advertising highlighted in this guide illustrate the growing complexity of ad campaigns that combine the advantages of digital advertising approaches with new takes on old standbys.
The future of advertising is taking form today as ads on traditional and digital platforms become more personalized, more informative, and more finely targeted at niche audiences.
What Is Advertising?
Advertising encompasses all the actions an organization takes to bring its products, opinions, or causes to the attention of the public or a specific audience. The goal of advertising is to convince people to respond in a certain way, whether to buy the product or service, or think or act a certain way, such as public service announcements encouraging people to stop smoking, vote for a specific candidate, or support a cause.
Today’s advertising industry arose in the late 19th century when the first advertising agencies were established. These companies brokered sales of ads that appeared in newspapers, eventually expanding into providing editorial copy and artwork for the advertisements. By the 1920s, these companies were preparing full advertising campaigns for corporate brands such as Coca-Cola and Ford Motor Company.
Digital technologies that reach people via internet platforms and smartphone apps are transforming modern advertising. Revenue from internet advertising in the U.S. increased by 12.2% in 2020 to $139.8 billion, according to the Internet Advertising Bureau (IAB), and internet ad revenues are forecast to top $200 billion annually by 2025.
Traditional vs. Nontraditional Advertising
Newspapers, magazines, and other print media were the primary outlets for advertising until the arrival of radio and television broadcasting. Those traditional advertising sources continue to generate billions of dollars in ad revenue annually, but digital ad platforms such as Google, Facebook, Instagram, and YouTube are challenging them.
These are among the most common traditional advertising methods:
- Handouts are flyers or printed brochures that promote a product, a business, an event, or a sale. They introduce the business to the public and are one of the most straightforward means of advertising.
- Billboards come in many sizes and are placed in high-traffic areas so the widest possible audience can view them. Their images and text are designed to grab the public’s attention and impart information quickly, simply, and clearly.
- Direct mail is sent in the form of letters or postcards to potential customers who live in a specific area. The messages help build awareness of a business and its products.
- Print ads that appear in newspapers and magazines bring a company’s message to a publication’s readers. The higher the publication’s circulation, the wider the potential audience for the ad (and the higher the likely cost of the ad).
- Event marketing distributes printed or digital material about a business and its products at trade shows, conventions, conferences, fairs, festivals, and other industry and consumer events. It relies on banners and signs to attract event attendees’ attention.
- Broadcasting gets the business local or national recognition via commercials that run on radio and television. The goal of the ads is to intrigue listeners and viewers so they make an effort to find out more about the advertised product.
Digital ads differ significantly from their print and broadcast counterparts, but their purpose remains to raise awareness of what’s being advertised and motivate some change or action on the part of the target audience. Examples of digital advertising follow:
- Display advertising is typically in the form of banner ads that appear on websites and in some smartphone apps. They can include video, audio, and interactive elements in addition to static graphics and text.
- Paid search advertising appears in the results that Google, Bing, and other search engines serve up. These text ads include a headline, short text description, and link to the advertiser’s site.
- Video advertising often appears before or during playback of videos that appear on YouTube and similar sites. Tremendous growth is expected for video ads that run on mobile phones.
- Social media advertising places ads on Facebook, Twitter, Instagram, Snapchat, LinkedIn, and other social media. These ads benefit from social media users’ ability to share, comment on, and otherwise interact with the ads.
- Native advertising is online content that matches the look and feel of the sites the ads appear on. The ads are often in the form of reviews or product placements that blend smoothly with other site content.
Advertising Campaigns That Blend Traditional and Nontraditional Media
Distinctions between traditional and nontraditional advertising continue to blur as cross-channel advertising becomes more popular. Cross-channel advertising coordinates campaigns across digital and traditional media in a way that leverages the strengths of each channel and resonates clearly with the target audience. These are some examples of companies that have merged aspects of traditional and digital advertising in their campaigns:
- Coca-Cola leveraged its traditional Santa-themed ad campaign in 2021 by partnering with the fan connection app Cameo to give people a chance to receive a custom video greeting from the man in red himself.
- Not to be outdone by the competition, Pepsi took advantage of the ghost kitchen phenomenon by opening a virtual restaurant called Pep’s Place that paired whichever drink guests chose with an appropriate dish.
- Whiskey distiller Crown Royal ventured into the metaverse by creating a hybrid world that hosted a block party where real people were digitized using 3D printing technology and interacted in ready-to-print digital environments.
- Chipotle teamed with the popular Roblox gaming platform in October 2021 to extend its annual Boorito campaign to the virtual space. The restaurant chain provided player skins, a virtual corn maze, and $1 million in free burritos for participants.
6 Common Types of Advertising
Nearly every form of human communication has been used to convey advertising at one time or another. Ads are now featured in podcasts, mobile phone apps, and movies and television shows in the form of product placements. These are among the top trends in advertising in 2022:
- Conversational marketing relies on chatbots and voice assistants to answer consumers’ questions about a company’s products and services. This approach enhances engagement, builds trust in the brand, and improves the customer experience.
- Highly personalized content tailors the material that appears on streaming services to the interests and demographics of each viewer. This improves the relevance of ads and increases the chances of consumers responding to the ad.
- Programmatic advertising automates the process of purchasing digital ads by applying real-time data analysis and audience targeting. Google claims that this technique allows its display ads to reach 90% of worldwide internet users while targeting a specific audience with the right message at the right moment.
The six types of advertising profiled in the following sections represent the approaches that are most popular with businesses and that have the broadest reach in attracting the eyeballs of consumers.
1. Paid Search Advertising
Paid search advertising is a marketing approach in which advertisers pay search engines to place their ads in the search engine results pages (SERPs). When someone enters a search term in Google or another search engine, the results that appear are a mix of organic results that are returned because they’re deemed the most relevant to the search term and paid results that typically appear in a box at the top of the results page and are labeled as ads.
How Paid Search Ads Appear in Search Results
Paid search ads are served to people in the results of their searches on Google and other search sites based on their relevance to the keywords entered in the search box. Businesses bid on keywords in an auction setting based on the keywords’ relevance to the product being advertised and the target audience for the ad.
Three types of ads appear in Google search results:
- Text ads are found at the top and bottom of the SERP. As many as four text ads may appear at the top, and several more may be shown at the bottom of the page. They consist of a URL, a link in the form of a headline, and a brief text description that’s one to three lines long.
- Local ads allow businesses with physical locations to purchase ads that show their names, addresses, and phone numbers, along with a star rating, a link to the company’s site, and a link to directions to the business. The location of the business is shown on a clickable map that accompanies the ads.
- Shopping ads are called product listing ads by Google; they feature images in addition to text that shows the product price, vendor name, reviews, and special offers. Based on the keyword entered, these ads may appear in a scrollable carousel near the top of the SERP on mobile devices or on the right side of the page in desktop browsers.
Paid Search Auctions, Pay-Per-Click, and Advertiser Return on Investment
Businesses bid on search terms via an online auction that identifies searches with a commercial intent and puts those terms up for bid by advertisers who meet certain eligibility requirements. Qualified advertisers set a maximum bid, or maximum cost per click (CPC), for each keyword they’re interested in. Businesses can also bid on groups of related keywords at the ad group level.
Ads receive a Quality Score based on how likely a consumer who enters the selected term is to click on the ad. The search engine is paid only for ads that people click, or pay-per-click (PPC). The Quality Score is determined based on three factors:
- Expected click-through rate (CTR)
- Ad relevance to the search term
- Landing page experience, which means the page people are led to after clicking has useful information they’ll find relevant to their search
In Google AdWords, for example, the CPC that a business is charged is calculated based on a formula that considers the ad rank: the maximum CPC bid times the Quality Score. The ad rank determines how high in the list of ads a specific ad will appear.
The return that advertisers realize from the money they spend on paid search ads is expressed in a formula called return on ad spend (ROAS): total ad revenue divided by total ad spend. For Google Ads, the average ROAS is 200%, which means a business earns $2 for every $1 it spends on the ads. However, it’s difficult to estimate the ROAS for specific industries because companies tend not to share how much they spend on the ads and how much revenue they realize from them.
Resources on Paid Search Advertising
- Ad Roll, “The Basics of Paid Search” — Covers topics including keyword popularity, ad quality and positioning, and the benefits of paid search ads to businesses.
- Instapage, “7 Search Engine Marketing Best Practices to Follow in 2021” — Offers tips such as focusing on ad conversion rates rather than CTRs, bidding on long-tail keywords with a sharper focus, and making sure landing pages match ad content.
2. Social Media Advertising
Businesses and organizations use ads delivered via Facebook, Twitter, Instagram, and other social media platforms to target specific demographics. Social media advertising is a form of digital advertising that attempts to take advantage of the heightened engagement of people on social media and the wealth of information advertisers have about the people they’re targeting with their social media ads.
How Companies Monitor Social Media for Marketing Purposes
Statista reports that 92% of companies worldwide are active on social media. In addition, a Harris poll on behalf of Sprout Social found that 80% of consumers expect the businesses they deal with to have a social media presence for customer service. A key operation for marketing departments is to monitor social media for mentions of their products and services, referred to as social media listening and engagement.
Companies use social media analytics tools to measure their reach, engagement, and sales to a specific subset of the social media audience. Key features of analytics products include audience segmentation, behavior and sentiment analysis, clustering analysis, and share of voice (the prevalence and intensity of conversations about the product, brand, or company).
By collecting data from social media platforms, advertisers can measure the results of their decisions based on the number of likes, shares, follows, retweets, previews, impressions, and other metrics. These are among the goals of social media analytics for advertisers:
- Quickly identify trends related to brands and products.
- Track how the target audience is responding to ads and other marketing efforts in real time.
- Gain greater insight into customers’ opinions about the products.
- Discover new high-value features and enhancements for the offerings.
- Find out how the messages of competitors are being received.
The Growing Importance of Social Media to Ad Campaign Success
Social media provides businesses with the largest potential audience for their messages, combined with an unprecedented ability to target people with specific characteristics. Each of the major social media platforms has a unique audience and purpose, so companies must focus on the social media their customers use most often.
- Facebook has about 2.9 billion monthly users. A Facebook business account includes numerous advertising tools and data analytics functions. Facebook gives businesses an opportunity to engage with customers directly and to save money on marketing.
- Instagram had about 1.1 billion active users in 2021 and continues to grow. The service is primarily for sharing images and videos, making it popular with young people. Instagram’s marketing tools for businesses include Instagram Live and Instagram Stories, which let a company advertise its products to audiences it couldn’t reach previously.
- Twitter was used actively by about 211 million people in 2021. The service lets businesses share images, videos, links, polls, and short text messages (240-character limit) to their followers. Using Twitter business accounts requires knowing how to use hashtags, post images and polls, and use direct messaging to handle problems.
- TikTok is a relatively new platform that’s especially popular with people in their teens and 20s, and sometimes as young as 10. TikTok for businesses lets companies share short videos, but to break through, clips need to resonate with a young, discerning audience. The five types of advertising on the platform are in-feed native content, TopViews, brand takeovers, branded hashtag challenges, and branded effects.
Resources on Social Media Advertising
- HubSpot, “Which Social Networks Should You Advertise on in 2022?” — Compares the advertising potential of the major social media brands and explains how to calculate return on investment (ROI) for the ads.
- CMSWire, “What Social Media Trends Will Emerge in 2022?” — Identifies trends such as increased personalization, greater focus on privacy, the arrival of more podcast platforms, and heightened customer expectations.
3. Display Advertising
Display advertising is a form of digital advertising that uses banners and other visual ad formats on webpages, on social media, and in applications. The most important networks for display advertising are Google, Facebook, Twitter, and Instagram. Ads appear on specific sites when visitors meet the criteria the advertiser sets:
- Keywords entered in search fields
- Demographic characteristics of the site visitor, as gleaned from data contained in browser cookies and other sources
- The page topic or interest as determined by scanning its content and metadata
Display ads are used primarily to promote brand awareness rather than to prompt a specific reaction. They’re also used for retargeting, which places a company’s display ads on pages that site visitors subsequently go on to. People rarely make a purchase the first time they visit a company’s site, but they’re more likely to do so the more often they return to the site.
Targeting Display Ads to Specific Online Audiences
The power of display advertising is its ability to show ads only when a receptive audience is most likely to see them. The advantages of display ads that are targeted to groups meeting preset criteria include being able to create a range of custom ads quickly and inexpensively, reach a greater number of potential customers, and clearly measure the effectiveness of specific ads.
Nearly all display advertising is now programmatic: The ads are purchased and optimized automatically, rather than being bought directly from publishers.
- In the past, display ads were marketed just as print ads were, so they appeared at a set time and place no matter who visited the site.
- Programmatic advertising uses machine learning and other artificial intelligence techniques to make possible real-time bidding on the ad space. This allows companies to have their ads appear only when the visitor meets specific criteria, such as having visited the vendor’s site in the past.
- Other forms of programmatic advertising for display ads are programmatic direct, which ensures the ads are shown a set number of times on selected sites, and private exchanges, which are invitation-only auctions that publishers offer for their available space.
Why Display Ads Are So Effective in Engaging Consumers
Despite dating back to the dawn of the internet, display ads continue to be an effective way for companies to advertise their products and themselves. Four reasons in particular explain the enduring popularity of display ads:
- The ads demonstrate the power of high-volume distribution combined with a high level of consumer engagement. Advertisers rank display ads as their fourth most important channel, trailing only video, search, and social media.
- The ads are inexpensive enough to be available to small businesses. They have low production costs, and their pricing structure is flexible enough to accommodate nearly any ad budget.
- The ads are effective on mobile phones, increasing their range and potential audience. This is especially important as people spend more time viewing content on their phones and other mobile devices.
- The capabilities of audience targeting and retargeting continue to evolve, which promises even more effective ways to engage customers and help build a company’s brand.
Resources on Display Advertising
- Feedvisor, “What’s New in Advertising This Year?” — Trends in advertising in 2022 include more advertising via online marketplaces, interactivity in video and audio ads, and mobile-first advertising strategies.
- Smart Insights, “What Is Programmatic Marketing?” — Examines the current state of programmatic advertising and discusses programmatic advertising best practices.
4. Native Advertising
Native advertising is a form of digital advertising in which ads have the look and feel of editorial content on a webpage or in an application. The ads are effective because they’re “nondisruptive”: They integrate seamlessly with the non-ad content that appears on the site or in the app. While print media has long included ads in the form of articles, the first native ads appeared in digital media in the early 2010s. In recent years, this type of ad has grown tremendously in popularity.