Online Advertising: All You Need to Know in 2023

There’s a reason why Google’s advertising revenue stood at a staggering $224.47 billion in 2022 or why Meta generated over $113 billion in ads.

Millions of businesses worldwide invest billions in paid ads each year to put themselves in front of as many people as possible. And they’re doing it because online advertising, when done right, delivers outstanding results.

On the other hand, if you’re not careful, it can feel like flushing your $$ down the digital drain. And it’s even more important today, considering the ever-evolving online advertising landscape, all thanks to new platforms, ad types, and targeting capabilities popping up all the time.

To help you out, we’ve put together this comprehensive online advertising guide for business. Throughout this post, we’ve covered everything you need to know about online advertising.

If you’re only interested in learning about a certain type of online advertising, you can use the table of contents below to navigate to each section.

How to Advertise Online

Of all online interactions, 93% start with a search engine.

Whether you’re on the lookout for the best Indian restaurant in your neighborhood or looking for a specific SaaS tool, you’re likely going to turn to a search engine to find what you need.

And the same goes for your audience.

With search engines like Google, Bing, and many others being a core part of almost everyone’s daily routine, it’s important to ensure you’re running paid ads to catch their attention on these platforms.

And let’s not overlook how much time people spend on social media platforms.

According to Data Reportal’s Digital 2023 report, the average time people spend on social media stands at 2 hours 31 minutes daily. This means you should also incorporate social media into your online advertising strategy.

There are plenty of ways to advertise your business strategically. Think about who you’re trying to reach when you start.

Ask yourself questions like:

• What target demographic am I advertising to?
• How can I place my product or service offering in front of my target?

The answer is to see where your target demographic spends the most time online. Research their most frequented social media channels and the keywords they look up the most.

If you want to run pay-per-click (PPC) ads on social media, it’s important to note that most social media platforms offer business pages the ability to pay a fee to promote posts/ads within the interface.

Or, if you are looking to advertise on a search engine for targeted keywords, Google Ads or Sixads can guide you through the process of payment and execution.

Benefits of Online Advertising

There are three key ways that digital advertising can help you improve the performance of your organic marketing efforts.

With digital ads, organic performance can benefit from:

1. An increase in brand awareness by displaying your content to individuals within and outside of your networks.
2. A better understanding of your audiences by leveraging the targeting and analytics of the ads platforms.
3. The creation of higher-performing content by understanding what ad content helps you achieve your business goals and what doesn’t.

The goal of any advertising strategy should be to get a positive return on your investment, which comes down to whether you’re getting more revenue out of the ad campaign than the cost you’re putting in.

How Paid Advertising Works

How can you determine what your ad spend should be to get the most return on your investment? To start answering that question, we’ll need to understand the bidding system used by the ad networks.

What’s a bid?

A bid is the maximum amount of money you’re willing to pay for the desired action on your ad. If it sounds like an auction, that’s because it is an auction.

Ad networks have a limited amount of ad space, and to determine whether or not your ads are shown to your target audience, they run an auction to see how much each advertiser is willing to pay for ad space.

Just like in an auction, the highest bidder wins. Let’s say you bid $10 for a click on your ad, and the next highest bidder only pays $5 for a click.

Each ad network will only make you pay the lowest amount possible to win the bid. In this example, you might be willing to pay $10. However, in reality, you’ll only have to pay $5.01 to win the bid.

Winning this “auction,” in addition to the overall quality of your ads, will determine how your ads are displayed on the different ad networks.

Here’s another example of how the ad auction works from WordStream.

How much should I spend?

At this point, you might be thinking, “Okay, I get how the auction system works. But how do I figure out how much I should actually spend to see a return on my investment?”

My advice is to work backward from your revenue to determine what your maximum bid should be.

Use this equation:

Lifetime Value (LTV) x Average Lead-to-Customer Rate x Average Conversion Rate

Your LTV is how much a customer is worth to you throughout their relationship with your business. The average lead-to-customer rate is the rate at which your leads become paying customers.

Your conversion rate is the rate at which new contacts convert on your content offers by filling out a form.

When combined, these metrics show you how much you should spend on your paid ads to break even.

Let’s say you want to use digital ads to promote your new content offer. You will need to know what your maximum ad spend should be to see a positive return on your investment.

Assume that you know the following about your business:

• Lifetime value: $500.
• Average lead-to-customer rate: 10%.
• Average conversion rate: 20%.

Plug these numbers into the equation above to determine your maximum ad spend: $500 x 0.10 x 0.20 = $10. This means you can spend a maximum of $10 per click on your ad to break even.

Your goal should be to spend less than $10 to see a positive return on your investment.

Types of Online Advertising

Now that we know more about how to advertise online, let’s dive into the different types of online advertising.

Social Media Advertising

Every month, there are nearly 2.96 billion active users on Facebook, 2 billion on Instagram, and 556 million on X worldwide.

Whether it’s to chat with friends, stay connected to people across the globe, or for business and/or networking purposes, consumers are on social media for a multitude of reasons — and marketers know it.

Because of the sheer number of active users on these platforms, advertising spending invested in social media channels is at an all-time high. The global digital advertising spend is projected to exceed $243.7 billion by 2027.

Advertising on social media comes with many advantages. You can:

• Reach very specific target audiences with the help of targeting features and different audiences across all of the social media platforms.
• Leverage a variety of ad formats to advertise in a way that aligns with your business goals.
• Invest in the specific advertising efforts that drive leads and sales for your business.

Let’s look at eight popular social media networks, including Facebook, Instagram, LinkedIn, X, Pinterest, YouTube, Snapchat, and TikTok. We’ll cover the audiences and ad types available on each one.

1. Facebook

Facebook is, hands down, the most widely used social media network, leveraged by 64% of marketers. HubSpot Blog’s 2023 Marketing Strategy & Trends Report indicates that Facebook offers the highest ROI.

I’d also like to shed light on the fact that almost 2.96 billion people worldwide use Facebook. Just think about it — that’s more than 35% of the world’s population.

With so many people using Facebook and the platform taking the throne as the highest-ROI social media platform, you’re almost guaranteed to reach an audience that’s relevant to any type of business.

That’s where one of the most powerful features of advertising on Facebook comes in: audience targeting. The targeting capabilities on Facebook are unmatched by any other social media network.

There are three types of audiences that you can target on Facebook:

1. Core audiences — an audience based on criteria like age, interests, and geography.
2. Custom audiences — get back in touch with people who have previously engaged with your business.
3. Lookalike audiences — reach new people whose interests are similar to those of your best customers.

Facebook’s advanced targeting can target your ads to the most relevant audience — and even tap into new audiences you’d otherwise never reach with organic content alone.

Advertising on Facebook includes a range of ad types, including:

• Photo ads.
• Video ads.
• Story ads.
• Lead ads.
• Poll ads.
• Carousel ads.
• Instant experience ads.

Photo ads are great for sharing collections of image content. Monday.com’s Facebook photo ad is a great example:

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Video ads are great for product explainer videos and branding, and you can use a simple video ad maker to create eye-catching and engaging videos.

Kay Jewelers’ Facebook video ad is one of my favorites — as it tells a quick yet moving story of a woman smiling and being super-happy after receiving a gift in the ad.

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Story ads allow you to combine photo and short-form video content. Similarly, there are different ad types, which you can dive deep into through the Facebook advertising course on HubSpot Academy.

Personally, my favorite way to advertise on Facebook is with lead ads because they give you the best of both worlds: sharing visual content and generating leads simultaneously. Facebook Lead Ads allow you to capture lead information without directing people out of the Facebook platform.

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No matter your business’s size or industry, you can use lead ads to find potential customers who are likely interested in your products or services.

With lead ads, you provide a helpful piece of content that encourages viewers to sign up for a newsletter, receive a price estimate, or request additional business information. In return, when the viewer fills out the form, the business receives a new lead.

Another way to advertise on Facebook is through Facebook Messenger.

Facebook Messenger is a separate messaging app that comes with its own advertising opportunities. Facebook Messenger is the go-to messaging app in countries including the US, Canada, and Australia.

Other messaging apps like WhatsApp and WeChat are the more popular choice in countries throughout South America, Europe, Africa, and Asia.

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Billions of messages are exchanged between people and businesses monthly on Facebook Messenger. Ads play a big part in initiating conversations on Facebook Messenger.

You can use Facebook Messenger as part of your advertising strategy in a few different ways.

• Facebook Messenger call-to-action in ads: Start conversations with ads on Facebook that include a call-to-action (CTA) to send a message.
• Facebook Messenger Story Ads: Run story ads on Messenger Stories.
• Facebook Messenger Ads: Use messenger ads to deliver content directly into users’ Facebook Messenger chats.

All of these ad types come together to encourage your audience to kick off conversations with your business. They can be used to contact a sales team, request more information on a product, or even share other content like blog posts or ebooks.

My favorite way to advertise on Facebook Messenger is retargeting. Retargeting ads in Facebook Messenger are a great way to start targeted conversations and send personalized offers and content.

Sponsored messages allow you to advertise to people who have already interacted with your business in Messenger. This is a great way to re-engage your audience in a personalized way.

Here’s an interesting example:

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As you can see, this ad is visible in the user’s feed. When they click on the CTA (“Learn More”), rather than being redirected to any website or dedicated landing page, they are redirected to Facebook Messenger.

2. Instagram

You can also advertise on Instagram through the Facebook Ads Manager. Instagram has over 2 billion monthly users globally. The majority of users are between the ages of 18 and 34.

There are three ways that you can advertise on Instagram:

• Promote posts and stories directly from your Instagram professional account.
• Create ads from your Facebook Page and promote them on both Facebook and Instagram.
• Create ad campaigns in the Facebook Ads Manager to access full targeting capabilities.

I recommend taking the third option and creating custom campaigns for your audience on Instagram.

Instagram has similar ad types to Facebook, including:

• Photo ads
• Video ads
• Story ads
• Carousel ads
• Reel ads

By far, the most interesting ad types right now are in-feed and explore.

Ads that appear while scrolling your feed are called in-feed ads. The ads that you see in the “Explore” section while exploring your interests and discovering new content creators are Explore ads.

Ads in Instagram Explore are a great opportunity to put your brand in front of people looking for new creators or content.

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Here’s an example of explore ad by Harvard:

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3. LinkedIn

The LinkedIn platform has over 900 million monthly active users worldwide.

Users on the platform are largely working professionals, which makes LinkedIn a great place for B2B (business-to-business) advertising.

LinkedIn is the go-to platform for working professionals, which provides B2B advertisers with a large audience pool to reach.

Plus, the advantage of advertising on LinkedIn is its unique targeting capabilities. On LinkedIn, you’ll have access to unique targeting criteria that are unavailable on other platforms.

You can target users on LinkedIn by unique demographics, including job title, job function, and industry.

Maybe you only want to advertise to potential customers at the director level who work in customer service within the recruiting industry. LinkedIn’s targeting capabilities make that possible.

Plus, with the option to include lead gen forms in your LinkedIn ads, LinkedIn can be a lead generation machine. This will allow you to reach a very specific audience and drive leads without directing them outside of the LinkedIn platform.

The most interesting ad type of LinkedIn is Message Ads. Message Ads allow you to send direct messages to your prospects to spark immediate action.

How to use LinkedIn Message Ads:

• Deliver a targeted message with a single CTA.
• Drive stronger engagement and response than traditional emails.
• Measure the impact of your messages.

But a word of warning: Don’t send too many Message Ads to the same people, or it will come off like spam. And make sure the messages sound authentic — if you were writing a LinkedIn message to a friend, what would you write in it?

If your Message Ads are too stiff, they’ll come off as spammy, too. Remember: This channel is a one-to-one conversation.

Direct messages are sacred spaces — if you’re going to advertise there, you need to be extra careful about taking the time to make your Message Ads feel personal and relevant to your end users.

Make sure you’re delivering value to them in a way that feels authentic.

4. X (Formerly Twitter)

Digital advertising is less common on X (formerly Twitter) because organic reach is still a significant driver of a brand’s performance on X.

This is very unique to X — but even so, ads can still deliver strong results depending on what your goals are. X has over 556 million monthly users globally.

The majority of users are between 35–65 years old.

Advertisers have discovered a few niches that have high engagement on X: B2B and ecommerce. Many B2B companies are using X as a digital marketing tool, and X users are known to spend a lot of money online.

This makes advertising specifically to these audiences a great strategy.

Climate Group, an international climate non-profit, ran an X advertising campaign to educate business owners on climate-friendly innovations.

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As visible in the screenshot, this ad garnered impressive engagement — with 7,446 likes, 355 reposts, eight bookmarks, and 29 quotes (as of 2023).

X breaks down its ads into five goals:

• Awareness. Promote your messages and maximize your reach.
• X engagement. Promote your messages and get more reposts, likes, and replies.
• Follows. Promote your account and grow your X following.
• Website clicks. Promote your website and get more traffic.
• App downloads. Promote your app and get more downloads.

All of these can work together to help you grow your audience on the platform and convert users into customers.

5. Pinterest

Pinterest is a unique social media platform with 445 million users who are highly engaged and predominantly female.

Some people say that Pinterest is the only platform where users actually want to see ads from brands they love because Pinterest is all about visuals.

Here’s how to advertise on Pinterest in four steps:

• Pick a pin. Promote your best pins so they appear in the most relevant places.
• Decide who sees it. Set up targeting so the right people see your ads.
• Pay for results. Choose to pay for engagement or visits to your site.
• Track what’s working. Once your campaign starts, see how it’s doing and make adjustments as necessary.

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Pinterest is great for businesses relying on photography to sell their products and who have a female target buyer persona.

6. YouTube

YouTube is the second largest search engine, second only to Google, with over 2.5 billion monthly active users.

Ads on YouTube appear before and during other YouTube videos or as a stand-alone promoted video that’s displayed after performing a search.

Since you can target demographic information and interests, you can serve your videos to specific, relevant audiences already watching videos from similar brands or on related topics.

Despite that, not many brands can keep their target audience engaged and stop them from hitting the “skip ad” button.

But that’s not the case with Nissan. Nissan, a Japanese multinational automobile manufacturer, changed the game by keeping their viewers engaged for over four hours without reaching for the “skip ad” button.

They launched a YouTube ad that was very different from the traditional ones. This four-hour-long ad featured a custom Lofi playlist that serves as the soundtrack to an animated character’s road trip.

One of the reasons this ad worked so well is that people love lo-fi music. It’s a genre people love listening to while studying, working, or trying to relax.

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Learn more about Nissan’s secret here.

7. Snapchat

Snapchat’s 635 million users are predominantly made up of people between the ages of 18–24.

Snapchat offers a few ad types, including story ads, sponsored tiles in Snapchat Discover, and augmented reality (AR) lenses.

Snapchat’s ad types feel pretty similar to the advertising options on Instagram.

What makes Snapchat unique is the augmented reality lenses. AR lenses are sponsored by a business to create interactive moments that users can use and share with their friends.

It might be hard to believe, but in this example from Domino’s — even though you see the pizza, it’s not really there — that’s the AR lens at work.

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8. TikTok

One of the newer — and most popular — players in the social media advertising world is TikTok. TikTok is all about creating short, creative, and funny videos.

TikTok has exploded in the past few years and has reached 1.05 million monthly users.

Advertising options are mainly geared toward driving awareness.

Promoting TikTok videos allows brands to build awareness with a young target audience. Most posts you’ll see on TikTok aim to get laughs.

From a brand perspective, you’ll want to create funny videos that align with other content on the platform. Think of things like dance challenges and memes. This type of content is the most effective.

That said, let’s move on to paid search advertising.

Paid Search Advertising

People searching online are looking for something specific and will click on the first result they believe will be the most helpful to them.

You might be thinking: “I already appear in organic results on search engines. Why should I pay to advertise too?”

Well, there are three key reasons:

• On average, digitally prepared businesses anticipate four times better revenue than less prepared ones.
• Advertising on search engines protects you from the competition who may be advertising on your branded terms.
• Search ads appear first in the search engine results pages (SERPs) above the organic results.

Paid search advertising allows advertisers to capture the attention of their audience in a more targeted way than with organic search alone.

Search ads allow you to anticipate the wants, needs, and desires of your potential customers and serve ads to them that are highly contextual.

Over time, the analytics of your search ads can help you analyze and improve those ads to reach even more people.

But how does Google know how to deliver the right ad to the right person? That’s where keywords come into play.

Keywords

A keyword is one word or phrase that someone uses to describe what they need in search.

Advertising on search platforms takes the targeting capabilities available on social media platforms, like demographics and location, and layers it with the addition of keywords.

When a Google user types a query into the search field, Google returns a range of results that match the searcher’s intent.

Keywords align with what a searcher wants and will satisfy their query. You select keywords based on which queries you want to display your ad alongside.

Keyword research is just as important for paid ads as it is for organic search.

That’s because Google matches your ad with search queries based on the keywords you selected.

Each ad group you create within your campaign will target a small set of keywords, and Google will display your ad based on those selections.

Let’s say Mary is moving to a different house and is looking for a home mover. So she goes into Google and types “who are the best movers.”

By searching “best movers,” she’s going to see results for advertisers that targeted keywords like “moving companies” and “top-rated movers.”

Search engines also consider your intent when choosing the types of ads to display.

In the example above, search ads were the most helpful resource. But what if you’re looking for a location-based business, like a coffee shop?

In Google Maps, you might see “Promoted Pins” like these, shown in purple on the map and in the search results on the left. Promoted Pins are a great way for businesses to attract customers to their business based on

What if you’re looking to make a purchase? Well, Google might show you a different kind of post to match your intent, such as Shopping Post Ads.

In this example below, Google shows you shopping post ads for the keyword “buy snowboard.”

Since my query includes the word “buy,” Google knows that I’m interested in making a purchase, so I am shown ads for products I might be interested in.

So, how do you select your keywords?

Keywords typically fall under two categories: brand and non-brand.

A brand keyword is a word or phrase that includes a brand’s name or variations of a brand’s name. For example, some of HubSpot’s brand keywords include HubSpot, HubSpot Free CRM, and HubSpot Marketing Hub.

These are all variations of the HubSpot brand and the tools that we offer.

Non-brand keywords are all other relevant keywords that don’t include a brand’s name or variations of a brand’s name.

Some of HubSpot’s non-brand keywords include “inbound marketing,” “sales software,” and “customer relationship management.”

While these keywords are not part of HubSpot’s brand name, they are relevant terms that allow HubSpot to reach audiences interested in eventually making a purchase.

Brand and non-brand keywords play a role in your digital advertising strategy. Brand keywords help you protect your brand from your competitor’s ads.

If you don’t run ad campaigns for brand keywords, you’ll leave your business vulnerable to losing website traffic to the competition who is bidding on your brand keywords.

Non-brand keywords still have a role to play, too. Non-brand keywords allow you to reach new audiences unfamiliar with your brand.

Match Type

When it comes to when your ad is displayed, you don’t just want to pick a certain group of keywords and have the ad shown only when those keywords are entered into the search engine.

This is where match type comes in. Since there’s an infinite number of ways that people can actually search for one term, Google gives you three match types to choose from: exact match, phrase match, and broad match.

You can even use a broad match modifier and exclude negative keywords to optimize where your ads are delivered.

Let’s take a look at each match type:

• Exact match: A keyword set to exact match will only display your ad if the search term includes that exact keyword or a very close variation. Exact match keywords are surrounded in [brackets].
• Phrase match: A keyword set to phrase match will display your ad if the search term contains the same order of the words, but it can also contain additional words. Phrase match keywords are surrounded by “quotes.”
• Broad match: A keyword set to broad match displays your ad when the search term contains any or some combination or variations of the words in your keyword, in any order. Broad match keywords don’t include any symbols.
• Broad match modifier: The broad match modifier allows you to select keywords that must be included in the search query for your ad to be displayed. Keywords with a broad match modifier use a +plus sign.
• Negative keywords: Excludes your ads from being shown on searches with that term. Negative keywords include a -minus sign.

Google vs. Bing vs. Yahoo

There are a few advertising platforms out there for search, including Google, Bing, and Yahoo. But Google is by far the most used search engine out there.

Google processes more than 90,000 search queries each second. With Google leading the search engine market and accounting for 85.53% of the search engine market share, it makes sense for businesses to run Google Ads campaigns.

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But this doesn’t mean you should entirely rule out advertising on these other platforms.

In some cases, you can achieve impressive results with a smaller ad spend on Bing and Yahoo than you could on Google since there is less competition from advertisers.

My recommendation is to dig into your organic traffic to identify if Bing or Yahoo make up a significant amount of traffic for any given keywords or topics.

This might indicate that advertising for those keywords on Bing or Yahoo could be profitable.

Regardless of where you advertise, the good news is that advertising on all of these platforms more or less work and look the same. So knowing how to advertise on one will make advertising on the others easier.

Native Advertising

Publishers like BuzzFeed and The Dodo produce content that snowballs in popularity on social media almost daily.

And they make money by helping other brands do it, too. Brands will pay these publishers to craft posts and videos that follow the publishers’ formula for virality.

They also pay publishers to distribute this sponsored content to their massive audience through social media and their website.

This is native advertising.

Check out this example from Walmart. The retail giant partnered with BuzzFeed to create this advertisement about Walmart Essentials.

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When you pay for a publisher’s native advertising services, you’ll be able to leverage their editorial expertise and audience reach to help your brand tell captivating stories to a bigger and better viewership.

And each publisher is going to support different ad formats and creative types.

During the creative process, you’ll collaborate with publishers to craft sponsored content that covers one of their main topics and looks like a regular piece of content on the publisher’s website.

This way, even though your post is technically promotional, it won’t disrupt their audience’s browsing experience. They’ll enjoy reading your post and won’t feel like you or the publisher are advertising to them.

This exposes your work to a huge, engaged viewership and attracts new followers to your brand.

Native advertising creates a symbiotic relationship between publishers and brands. Publishers who do sponsored content right reap the benefits of another revenue stream and gain more audience trust if they promote a native ad from a trustworthy brand.

For brands, collaborating with prominent publishers can unleash unprecedented amounts of creativity to help them win over the publishers’ audience and boost engagement — as the click-through rate on native ads far exceeds traditional.

For example, T Brand Studio, the New York Times native ad business, crafted sponsored posts that captured as much engagement as some of nytimes.com’s highest-performing articles.

To find the optimal native advertising opportunities for your brand, try using StackAdapt or Nativo.

Display Advertising

Display ads are a controversial topic in the digital marketing community.

For almost 25 years, advertisers have abused them by tricking internet users into clicking misleading ads — some malicious display ads have even infected people’s computers with viruses.

It’s easy to see why people have developed banner blindness and can’t stop downloading ad blockers: display ads have the reputation of being intrusive, distracting, and irrelevant.

On the other side of the spectrum, though, display advertising technology has advanced to the point where ad networks can leverage data and machine learning to offer advertisers more effective targeting strategies and consumers more relevant ads.

Ad networks like Google Display Network and Facebook’s Audience Network are the leaders in the banner ad renaissance.

They can display your ads to the right target audience at the right place and time.

And if you want more control of your advertising, they’ll let you decide where to place your ads. Below, we’ll cover each ad network’s features and targeting capabilities.

1. Google Display Network

When you use Google’s Display Network, you can design visually appealing ads and place them on over two million websites and apps, YouTube, and Gmail.

You can also build new audiences by targeting people who are most likely to be interested in your product or service and remarket website visitors just by importing a list of their contact information.

If you don’t want to build out your ideal audience or deal with bidding, you can let Google Ads do it for you. Its automated targeting and bidding features can identify your highest-converting audience for the best return on investment.

Display ads can be most effective when retargeting an audience that’s already familiar with your brand.

Here’s an example of a display ad on Yahoo News:

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2. Facebook’s Audience Network

With Facebook’s Audience Network, brands can expand their Facebook ad campaigns and use the same targeting data they use on the platform to advertise on a huge collection of websites and apps.

Brands can place native ads, banner ads, full-screen ads, in-stream video ads, and rewarded video ads (for example, “Watch this video ad to get more tokens!”) on the network’s websites and apps that their Facebook audience frequently visits.

This type of advertising can be particularly effective for mobile games, like in the example below from 5agame, who was able to attribute 80% of their revenue through their rewarded video.

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If you want to continue leveling up your ads training, check out HubSpot Academy’s free course on the Digital Advertising Training Course.

Getting Started

In today’s digital work, having the right online advertising strategy is essential for every business.

Now that you know about all of the digital ad types that are available, the next step is to learn how to leverage the right ads for your business to achieve your goals.

Start building a strategy today, so you can increase your revenue tomorrow.

Editor’s note: This post was originally published in April 2020 and has been updated for comprehensiveness.