Your prospective customers constantly engage with digital advertising in their daily lives, whether searching for products on Google, scrolling through social media, or watching a YouTube video.
How do you know which digital advertising platforms to choose as a business? What type of ads do you want, and which will give you the best results?
In this guide, we’ll discuss the different types of digital advertising, how they work, and which web advertising platforms can help you maximize your budget.
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What is digital advertising?
Digital advertising uses online channels to promote products, services, or brands to a targeted audience.
Unlike traditional ads like TV commercials, billboards, or print ads, digital advertising helps businesses reach potential customers where they will spend the most time in 2025—on search engines, social media, websites, and streaming platforms.
Why digital advertising matters for businesses
The biggest benefits of digital advertising are that it’s precise and measurable.
Instead of casting a wide net and hoping for the best, digital advertising platforms can target specific audiences based on:
- Demographics
- Interests
- Online behavior
- Past interactions
Using digital ad platforms like Google Ads, LinkedIn Ads, or YouTube Ads, businesses can serve ads to people actively searching for their services or who have shown interest in something similar.
Digital advertising: Flexible and cost-effective
Digital advertising is extremely cost-effective, thanks to its laser-focused targeting abilities and the flexibility to refine campaigns based on data.
Digital advertising uses performance-based pricing models like:
- Pay-per-click (PPC): You only pay when someone clicks on the ad
- Cost-per-mille (CPM): You pay per 1,000 impressions
- Cost-per-lead (CPL): You pay only for qualified leads
These pricing models help businesses squeeze the most value from their ad spend.
Types of digital advertising
Each type of digital advertising platform serves a different purpose. There are multiple ways to reach your target audiences, and the best approach depends on your business goals.
Let’s break down the most popular types of digital advertising, how they work, and when to use them.
Sponsored content on Google is a form of search advertising.
Search advertising
Search advertising allows businesses to appear at the top of search results when potential customers actively look for what they offer on popular search engines like Google or Bing.
- How it works: Paid search advertising operates on a bidding system in which businesses bid on specific keywords related to their industry, like “best mortgage rates” or “senior care facilities near me.”
- When to use it: Search ads work best for businesses that want to capture high-intent leads actively searching for their products and services. They are also best for those looking to maintain control over costs with a measurable, performance-driven approach.
Display advertising
Display ads appear as visual ads—such as banners or interactive media—on websites, apps, and social media platforms.
- How it works: Display ads are placed on relevant websites through digital advertising platforms like Google Display Network or programmatic ad exchanges. They can be targeted based on demographics, interests, browsing behavior, etc.
- When to use it: Display ads are best for businesses looking to increase brand visibility, retarget past visitors, and generate interest among potential customers who may not be actively searching for their services.
Social media advertising
Social media advertising involves promoting your products or services on popular platforms like Facebook, Instagram, LinkedIn, or TikTok.
- How it works: Businesses create ads tailored to their ideal audience based on location, demographics, or interests. Each platform offers various ad formats, like sponsored posts, carousels, or static image ads.
- When to use it: Social media ads are ideal for building brand awareness, driving engagement, and nurturing leads by reaching audiences on their preferred social platforms.
A video ad runs before a YouTube video.
Video advertising
Video advertising is most frequently used on social media platforms like YouTube, TikTok, and Facebook.
- How it works: Video ads can run before, during, or after video content on platforms like YouTube Ads or be embedded within social media feeds. These ads can be skippable or non-skippable and are often used for branding, storytelling, and demonstrating products or services.
- When to use it: Video ads are best for businesses looking to capture attention quickly, showcase their brand personality, and engagingly explain complex offerings.
Native advertising
Native advertising has a less intrusive feel because it is meant to blend in seamlessly with the surrounding content on a website or social media platform.
- How it works: These ads appear as sponsored content within news articles, social media feeds, or recommendation widgets, often resembling organic posts.
- When to use it: Native ads are best for businesses that want to educate, inform, and build trust with their audience through a more subtle, content-driven approach.
Retargeting and remarketing
Retargeting ads are an effective way to re-engage website visitors who didn’t previously convert.
- How it works: Businesses can use cookies or tracking pixels to show ads to previous visitors as they browse other websites or social media platforms.
- When to use it: Retargeting helps businesses increase conversions, nurture leads, and stay top-of-mind with potential customers.
Programmatic advertising
Programmatic advertising leverages AI to automate the process of buying and placing ads across multiple websites.
- How it works: Instead of manually selecting websites for ad placements, businesses use programmatic ad platforms to bid on ad space in real time, allowing for more efficient targeting.
- When to use it: Programmatic advertising is best for businesses looking to scale their campaigns and optimize their ad spend through AI automation.
How to choose the right digital advertising strategy
With so many digital platforms for advertising, the right strategy for your business boils down to three key factors:
- Budget: Some businesses may benefit from ultra-cost-efficient PPC campaigns, while others may see better results with a mix of search, social media, and display ads.
- Audience: You must understand where your target audience prefers to spend their time online.
- Business goals: Are you looking for immediate lead generation or long-term brand awareness? Different ad types serve different objectives.
Managing digital ad platforms effectively requires ongoing optimization, targeting, and data analysis.
An experienced digital marketing agency will ensure your business doesn’t waste budget on ineffective strategies while maximizing ROI.
Kaleidico: Your business’s competitive advantage
With PPC, Google Campaigns, and industry-specific advertising expertise, Kaleidico helps mortgage lenders, senior living providers, and law firms create customized campaigns that drive real results.
